China has a secret plan to use gold to become the superpower of the world. Well maybe it's not so secret but if you're not paying attention it could be secret. We know all the central banks are accumulating gold right now. For over a decade, China has aggressively accumulated gold. But Last year they accumulated more gold than any time in history since 1971. With estimates suggesting it could possess over 5,000 tons, although some analysts believe the figure might be as high as 20,000 tons.
China is also the largest miner of Gold since 2007. And the thing about China is they let anybody come mine in China but no gold is allowed to leave China. It is like, "go ahead come over mine it but then sell it all to us." Not only they have been the largest producer since 2007, (they surpassed India for that) they've also been the largest importer of gold as well. China, you know, they don't report everything exactly, so we don't really know how much they have. Whatever they do report, it's hard to know if it's true. But estimates are that they've been adding about a hundred tons of gold per year.
So let's dig into that a little bit further. So why are they doing this in the first place? Well, it's the same reason that all central banks are accumulating gold, which is to protect themselves from currency, a failing fake currency. Imagine if you could just produce a fake currency, just paper out of nowhere, and then you could take that fake fiat money and then convert it into gold, which is real wealth. That'd be pretty cool. And that's essentially what they're doing. They're printing fake money. They're buying gold with it. But China has something even bigger in mind.
China’s goals are two fold. First, to safeguard itself against currency instability and reduce its reliance on U.S. debt. Second, to position its currency more prominently within the International Monetary Fund's (IMF) Special Drawing Rights (SDR) basket—a reserve currency framework dominated by the U.S. dollar.
China has been doing this because they've been trying to protect themselves against their currency. Also, they're one of the largest holders of US debt. They want to protect themselves against the US debt. But what they also want to do is they're trying to get themselves a larger share of the SDRs. Now, what are SDRs? I'm glad you asked. SDRs are what's called special drawing rights. SDRs. And it's from the IMF, the International Monetary Fund. The IMF, the International Monetary Fund, is kind of like the BIS. It's a central bank for central banks, to put it very simply. The IMF creates this basket of currencies. These are reserve currencies. What they do is it's based on percentages, based off of how big that currency is, how strong that country is. So it's probably no surprise that the US dollar takes up the dominant position inside that IMF reserve currency basket or that SDR. And what China has been wanting is to get a larger percentage of their currency in that SDR basket. And the reason why they want that is because the larger percentage they have, the more of their currency will be purchased. And they've been doing this for a while. As a matter of fact, back in 2015, 2016, they were really petitioning hard, they were getting a larger and larger share, and it pushed trillions of dollars, somewhere between two to three trillion dollars got pushed into the Chinese currency because of that. And so that's one of their big motivations. Now it's been rumored for quite some time that China was accumulating all this gold to, at some point, announce that they're going to try to do a gold-backed currency again, which at that point they could really take a large share of that SDR basket, if not take it over. But what they're also doing is trying to work around the dollar. So not only are they trying to undermine the dollar by building one that's even stronger, they want to become the reserve currency.
They want to take the U.S. dollar off the reserve currency status and become that reserve currency. But they're also weakening it by working around the dollar so most global trade like oil for example supposed to be done in the US Dollars and the US uses the US dollars as weapons and so they slap sanctions on country Sanctions and sanctions and sanctions and sanctions on Russia sanctions on Iran Well what China's been doing is they've been trading with our enemies So while Russia Iran are supposed to have sanctions against them China's like well We'll deal with you and we'll buy oil from you and we'll do it outside of the US dollars.
And then it's no surprise that a month ago, the president of China, President Xi, about a month ago, he announced that they were going all in on digital currencies, blockchain technology, not Bitcoin, but blockchain technology. I think they got motivated by what Mark Zuckerberg was doing for Facebook with Libra. China wants to be the first to launch a blockchain digital currency of their existing national currency. They said they've been working on this for over five years and this is another piece that they're adding to the equation. Now, Mark Zuckerberg went before Congress and he warned the US regulators, he said, look, China's doing this. If it's not the US, then it's going to be China.
So it's what Max Keiser called China's trap door. So what China's doing is they're not trying to create a new currency. They're not trying to create a Bitcoin. They're not trying to create a Libra. What they're trying to do is digitize their existing currency. So they want to take their currency they already have and put that onto the blockchain. According to Max Keiser, China is going to announce at the same time that 1. their currency is going to be backed by the blockchain, 2. that it's gonna be backed by gold, and 3. the shocker is that they don't have 2,000 tons of gold they have 20,000 tons of gold, which would be a bomb drop to the whole world. Everyone would just freak out if they had 20,000 tons, and it would make it evident that they were serious, they were going to have a gold-backed cryptocurrency done by the PBOC, and it would be a very, very, very aggressive move to unseat the U.S. dollar. I think it would establish its global dominance, and it would send shockwaves through the world. So what would happen?
It would be shocking obviously, but what we would see instantly, we'd see the price of gold skyrocket I mean the price of gold would just go up so fast And so you want to be prepared for that we'd also see the Chinese currency The one would also skyrocket in value. The downside would see the value of the US dollar would drop, it would plummet really, really fast. So those are some of the repercussions that could happen. And so we have to be prepared. Obviously, if we had a crystal ball, that would make this way easier. I always say that we can't trade, we can't invest in hindsight. So we have to take the information that we have available to us and make the best decisions. We need to be paying attention to them so we can move and react as things come up.
We know that they have been accumulating Gold in hopes to potentially relaunch their currency as a gold-backed currency. We thought they wanted to do that to get a larger share of the SDR, the IMF SDR Reserve Currency Basket, so more money would flow into them. But now, in the last month, they've announced they're going to release their own cryptocurrency, their own blockchain currency. And if they announce that that is going to be gold back, which we've already thought they're going to do it. And then they shocked the world and say, it's not 2000 or 5,000 tons. It's 20,000 tons. It could be game over. This is really big, obviously it's speculation, but all these things we've been watching for a decade, a dozen years are starting to all line up with this last announcement that they've made. And so big things are happening. So you need to be prepared, stack some gold, make sure you have gold allocation in your portfolio. Buy some Bitcoin. That's a protection against the U S dollar fund.
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The information provided in this article reflects my personal assessment, research, and opinions. It is not intended as financial advice, investment advice, or a recommendation to buy, sell, or trade. This is just a news channel where we provide analysis of Recent Circumstances and discuss possibilities like what can happen and what can not. Our Assessment and Analysis can be wrong. So don't merely rely on our analysis. It is recommended that you also Do a research of your own. Thank you!