A rare trend is seen in China, which has so far escaped the attention of the world’s media. According to Reuters, China has been surreptitiously importing gold from Switzerland at a record pace. Swiss gold exports to China in July hit their highest level since December 2016, according to Swiss customs data.
The report said Switzerland supplied mainland China with 80.1 tons of gold, worth 4.4 billion Swiss francs or $4.6 billion, compared to just 32.5 tons in June. Thus, over the past two months, China has imported 112.6 tons of gold.
Interestingly, China’s monthly gold consumption is only around 20 tons. Last year, during the same period, only 20 tons of gold were imported into China. According to this data, China is currently importing an additional 60 tons of gold per month. Undoubtedly, China is up to something big and really mischievous.
The yuan could surpass the dollar
So what exactly is Beijing planning as it stores huge reserves of gold? The answer to this question actually lies in Moscow. After the imposition of sanctions on the Russian economy, Russian leader Vladimir Putin talked about pegging Russian currency to gold and issuing gold-pegged “stablecoins” in the cryptocurrency market.
Now China is simply taking a leaf out of Putin’s playbook here.
Beijing could pave the way to peg its currency, i.e. the yuan, to gold. The yuan is currently used as a store of value and trades much less than any other fiat currency, such as the US dollar.
Moreover, China’s action is identical to what Russia has been doing lately. For those who don’t know, Russia already started the process of de-dollarizing its economy when it declared in March that the ruble would be pegged to the gold standard. One gram of gold was valued at 5,000 rubles by the bank. Now, China is poised to follow suit to bolster Yuan’s global influence.
US hegemony would crumble completely if China, the world’s second-largest economy, tied gold to the yuan, as Beijing would achieve its long-standing goal of making its currency more respected and more stable than the dollar.
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The collapse of the American economy
China is poised to overtake the US economy by 2026. Globally, most countries have blindly pegged their currencies to a worthless, fiat dollar. At a time when the United States’ credibility in the world is diminishing and its economy is collapsing, more countries may choose to peg their currencies to the gold-pegged yuan and use it for international trade.
This will accelerate the decline of the USD as the world’s primary tool of international trade, thus completely eroding the weight of the USD.
Moreover, the gold-pegged yuan would provide Chinese traders with an unfair trading advantage. China enjoys a trade surplus with the United States, and eventually more trade between the two powers will lead to the Yuan gaining more strength against the US dollar.
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America’s last chance
The so-called only superpower on the planet, the United States, must see through the notorious plans of the Chinese. The US economy is already on the brink of total disaster. However, sleepy Joe still has the option to save face.
The United States urgently needs to master the world’s one-stop-shop for gold, i.e. Switzerland, in order to tame China. He must come up with a plan to reduce Swiss gold exports to China, either through sanctions or simply by giving them better deals than the Chinese.
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The CCP’s cunning plan to outdo US dollar hegemony also indicates that the US economy is in desperate need of fundamental reconstruction. It must strategically return to the era of its own gold pegged currency, the era that preceded President Richard Nixon’s disastrous decision to make the US dollar a fiat currency.