We double down on the most destructive form of financial ineptitude with wild fire printing of FIAT currency, hollowing out our economy while exporting inflation to nearly every country. China wisely doubles down and doubles down again Real Money. After the Western powers, aided by gold stealing allies like Japan, made off with well over 100,000 tons of gold China accumulated over the last 3,000 year, they are not going to let this happen again.
Their military, ships, nukes and eye to making the South China sea their own pond and defensible space, is not being developed to create forward bases. It’s to protect themselves and make their country inpenetrable from their former and present foes. This is a country with a strong memory that reaches over 5,000 years. And they do not appear to suffer from selective memory and collective amnesia, something that we engage in at a wholesale rate. Those who forget their history forget their legacies and lose their country.
China gold stocks could easily top 10,000 tons. While worth ‘only’ $700 billion or so, this accumulation will soon be sufficient to lay down the Yuan marker as an alternative currency. If the rest of the Chinese ‘Golden Horde’ allies rally behind the Yuan, we will be faced with our own monetary existential problem. This is the real USD currency collapse that so many wise minds talk about. One day the light switch on the dollar will be turned off. The inflation tsunami will be staggeringly large. All the conversations we’ve had about inflation and the dollar collapse will be spoken in the past tense.
Whatever remaining dollar reserves held in China will be written off, just like the Greek Bonds going through their third haircut in 3 years. In our case there won’t be the ECB, IMF and EFSF to bail us out. If there is, we will not like their terms.