Fund Manager Says That Real Or Imagined – Oil For Gold-Backed Chinese Yuan IS INEVITABLE
SilverDoctors.com
October 30, 2017
Dave Kranzler takes a deeper look at the oil for gold-backed yuan story. Those who say “it’s pure myth” and those who claim “done deal” take note…
by Dave Kranzler of Investment Research Dynamics
By having control of the physical market for gold, China can threaten to use it to destabilize the dollar, without destabilizing the yuan. As such, it is potentially devastating, and used carelessly could trigger an economic collapse in Western capital markets, wreaking financial and economic havoc in America and other advanced nations. China will never be wholly independent from trade with these nations, and severe financial and economic damage to the advanced economies will rebound upon her to some extent. For this reason, she has so far held off using gold as an economic and financial weapon, while she continues to insulate herself from periodic crises in Western economies. – Alasdair Macleod (Oil For Gold)
In response to questions about when China would finally cast aside the dollar and run the price of gold up, I’ve always replied that China would be shooting itself in the foot if it tried to replace the dollar too quickly. Don’t forget, China holds about $1.2 trillion in the form of Treasuries. Note: this ratio does not include the market value of its gold holdings, the actual amount of which is unknown outside of a small circle of Chinese officials.
When the idea of a gold-backed yuan-denominated oil futures contract surfaced, it became en vogue for those unable to analyze their way out of a paper bag to issue commentary refuting the idea. For some, if an event has not already occurred, they are unable to “see” it.
This article from Alasdair Macleod is a must-read for anyone who wants to understand the path leading up to the ability to convert oil sold in yuan or gold by China’s largest oil suppliers. Judging by the various recent oil trading and gold trading agreements between Russia and China, the conversion of oil sales into gold may well be already occurring in a two-stage process between Russia and China.
The Rest…HERE
