Posted on 04/16/2016 6:08:49 PM PDT by combat_boots
In a shocking move likely to crush the US economy overnight, China is refusing to make its new gold-backed Yuan, convertible from or to US Dollars. The new Yuan will be introduced next Tuesday, April 19.
When the International Monetary Fund (IMF) agreed to add the Yuan to the basket of world currencies used for Global Reserves and International Trade, they wanted China to make the Yuan more reliable as a currency. Since then, China has almost un-pegged its Yuan from the Dollar, allowing its value to fluctuate on world markets.
But for years, China has been amassing huge amounts of gold bullion; some have said their appetite for bullion has been "staggering." And with a new gold-backed Yuan to be issued next Tuesday, the entire world will have a choice of a new currency to use for international trade: The old US Dollar which is backed by nothing, or the new Chinese Yuan, which is backed by gold. Which currency would YOU use?
When this new currency is issued, countries that have been forced to use US Dollars for decades, and have had to keep billions of dollars in their foreign currency reserves, will be free to dump those dollars. But they won't be able to dump them to China for the new gold-backed, Yuan!
China has reportedly decided "there can be no conversion of gold-backed Yuan to or from US dollars."
(Excerpt) Read more at superstation95.com ...
not sure i get the reasoning. they carry a huge trade surplus with us. they’d be hurting their economy which is already in bad shape. i question the validity of this.
how could it be good?
4 am bump
Um, that makes no sense. If the yuan is gold-backed, that means there’s a set yuan-gold rate. And given gold has a set amount to the dollar (fluctuating, but there’s a number), that gives you a dollar-yuan exchange rate.
Their economy is not the end, but the means to an end.
People that assume China is a capitalistic society are forgetting that they are taking the long road, while western capitalists take the short one.
At our peril.
I’ll disagree. If they weaken their own economy they get further from whatever goal one might ascribe to them with the exception of if they wanted to get poorer. There may be some short term goal that involves adjusting their dollar holdings which is possible but thats it. They have over the past two years or so lightened up on US treasury holdings which has gained them more dollars.
One other point i’ll make. The party leaders are just as greedy as ours. They have personal interests in most if not all of their nations businesses. Their children hold high positions in those businesses. If they hurt their own economy they hurt themselves. Greed if nothing else casts doubt on the story.
I’ve been in finance since 1977 and close to retiring. The whole emergence of China as an economic power has taken place in the last 25-30 years and i’ve been witnessing it all. No expert but i’m somewhat knowledgeable.
I didn’t say it would never happen. It won’t happen on April 19.
Annnnnd we’re back to a two currency system in the PRC. Used to be Renminbi (RMB) and Yuan. with Renminbi only be allowed to be used to exchange with foreigners. Now they’ve tweaked it to say foreigners can’t use the Yuan. They will still have black market trade in the currency, just as they did with RMB.
They will also cut off a certain portion of trade completely as many contracts are written in dollars and the Chinese companies won’t have a method to convert directly.
So long as the US$ remains the currency of trade, nothing will happen and the value of the stock will vary as does the value of the US$ and the perceived value of the company.
Other nations can set a value of their currency in Yuan thus creating a tie to gold
bs...... DOUBTFUL!!!!!
Real money (gold backed) is preferable to paper backed by deadbeat loans. China wins this unfolding century.
> “The old US Dollar which is backed by nothing, or the new Chinese Yuan, which is backed by gold. Which currency would YOU use?”
Gold is just a yellow metal.
No one likes China. Gold or not, their culture and ways are not attractive.
Historically, America has been the attractor, and its currency has always been valued according to its historical role and image, whether backed by gold, puka shells or nothing.
We are so screwed.
Our country got greedy. This led to our decline.
Greed gets them all in the end.
We tax the hell out of it to benefit the US sugar cane and sugar beet farmers.
*****************
There are no more US sugar cane farms ,, I’m in Florida ... the last farms were forced to close for “environmental” reasons ... we paid a lot of tax money for that land.
http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=4291042
https://www.floridacrystals.com/categories.aspx
http://www.usda.gov/nass/PUBS/TODAYRPT/crop0216.pdf
It wouldn’t be me personally, but international corporations might need to.
Hope that helps.
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