Topic: China is stocking up on gold (Read 1692 times)

The reserves in a foreign currency usually tend to roughly match the national debt of the state in that currency. In this way, the crash in the value of the US Dollar would not only devalue these reserves but also devalue the debt itself. So it is effectively six of one and half a dozen of the other. On the other hand, if the national debt tends to diminish over time (as is the case with Russia), it doesn't make much sense to keep the reserves of the currency any longer...

And buying gold with them looks a better idea on the whole

Yeah trump's effect as usual. turning to gold is not wrong though and they will not counting only on dollar. america will indeed get a big impact by it. but, both countries will more likely to broke off the diplomatic relations if these thing keeping up and continued

If China replaces the dollar system with gold standart their export to USA will become more expensive.

I don`t know why they will want to do this.

This might have some influence over bitcoin and btc price.

chain is stocking up Gold, may be buying gold to diversify its foreign reserve holdings away from its heavy exposure to the U.S. dollar, which accounts for the vast majority of its foreign reserves. China holds U.S. treasury bonds worth $1.3 trillion, Bloomberg reported earlier this week, as new record.

The price of gold has opposite direction with respect to the price of dollars. A strong dollar keeps down the price of gold. A weaker US dollar is likely to drive the price of gold higher. It is well known that Chinese banks had more than 4 trillion of USA dept. It is not strange imo that they are trying to change dollars and euros as well with gold.

Perhaps they are doing this to insulate themselves from any crash in the value of the US Dollar. Gold is one of the few assets which are protected against currency devaluation. The other assets such as equities and bonds lose their value along with the currency.

Chinas currency is so manipulated, I'm not sure anyone knows what it is actually worth anymore.
If I had a lot of Yuan, I would definitely diversify my holdings into foreign currency, gold, bitcoin, etc,
just in case some policy by the Chinese government, the new US president, or anyone else changed the value of the currency into the negative.

I doubt Trump can really do much to negotiate a better trade deal with China,
but a policy that would change the price of Yuan even a percent or two is a huge loss for someone with hundreds of millions/ billions of dollars.

It might well be the case

Personally, though, I'm more inclined to think that they are piling up gold in their reserves for the purpose of substituting the paper currencies such as Euro and the US dollar. With the current political tensions, first arising around Russia and now around China (Trump accusing them of stealing American jobs and all such things), it seems to be the best solution. To get a better understanding of the situation, think about the KSA sovereign wealth funds held in the US which are now made vulnerable to lawsuits thanks to Congress allowing American citizens to sue Saudi Arabia directly for 9/11

Do you think Russia and China are doing this because they are expecting an economic crisis on the horizon? This might sound paranoid but maybe it's possible that they will both try to cause the crisis in order to profit from their gold investment.

How are they going to stop them? China is being preemptive in response to observations that the USA economy are on a downward spiral. The USA are swimming in huge debt, and they will never recover from that within this century. The Chinese see gold as the safe haven when the shit hits the fan and I do not blame them.

The thing is, gold is not performing that well, if you are looking at it over a 10 year period. https://www.kitco.com/charts/popup/au3650nyb.html

maybe I didn't put it correctly, USD is not accepted as legal tender, i.e. you are most likely will not get served if you come to a,say,Spanish or Italian or Norwegian
shop and try to pay with dollar bills
but what I meant was the current global domination of the US dollar as an internationally accepted currency:
mind you,all and every trade countries make are done in USD,NOT IN THEIR OWN CURRENCIES,there is a net of Federal Reserves banks in EVERY country of the world (its a completely different story,though)they make sure that countries do not print more money than they have dollars in paper or computer form

take for example gold fixing:  https://en.wikipedia.org/wiki/Gold_fixing
or oil futures contracts        https://en.wikipedia.org/wiki/Futures_contract
or basically any big exchange-all of them work with USD and trade in  USD only,so to buy gold,oil,wood etc.  you MUST convert your currency into USD thus supporting its gegemony as the most "stable" and "universally accepted"
unfortunately,our planet cannot sustain a country that with less than 5% total world's population consumes around 40%world's produce and generates 50% of the worlds garbage (you can google and find the stats yourself if you want)
the problem is that there is too much of a dependance,dollar is just too big to fall as it would make the global economy collapse as well
this is why China,Russia,Brasil and India have formed the so called BRICs and are trying to establish their own IMF structure and to trade using yuan,roubles or rhupees
D.Trunps election is  a step towards the global processes,he was appointed to make transition less painful for every party involved
hopefully without starting a war

America wants to start boycot China, China secures its money by turning it into gold. Just a safety system. Even though America still owns a fucking huge amount of money to china.

It is the chinese government that is stocking up gold not the individuals. I think the Chinese government is not yet involve in bitcoin or any cryptocurrency.

I recall hearing many of these same stories back in 2011, when gold and silver were booming.  I suspect these things are propagated by the silver bulls.  This wouldn't be a bad thing for China by any means. I think more countries need to get off the US dollar standard. And gold is definitely safe in the face of Donald Trump being president. That's a risky situation.

china have too many mining hardware and supercomputers for mining bitcoin but they cant control the bitcoin nor gold...this site give information about how they mining bitcoin.
http://www.afr.com/technology/lisa-kangding-story-20160706-gpzx7e

No one country can control gold nor Bitcoin. Any country has their own gold reserve. This is the concept of currency. The money in your pocket or wallet has a equivalent in gold in the gold reserves of your country. Do you think they just came up with a value for your paper money? No, they didn't. Your currency has an equal weight (not the metric weight) in gold. This is similar in Bitcoin. Every country can farm Bitcoin and no one country can control it either.

The China gold market is very large, so that whatever happens in China give affect the world, it's what makes the population of China taking a different types of financial investments. I am sure, bitcoin and gold also controlled by China.

I think yes it is still relevant for bitcoins, because some people considered bitcoins as gold (include people on China) and some people considered bitcoins as money, as we know the gold is more stable than fiat money there is no inflation in it and China has good strategy replace dollar system with gold and it is same with bitcoins for today bitcoin is gold.

That is very interesting because all markets went up today including gold's value all the sudden.
Could this be the reason that they see the falling Yuen and bitcoin prices and they are just sick of the volatility of both of them that they turn to a steady monetary system?

It's China as a state, not primarily as individuals. If you go and look at the central bank of China and their gold holding, it is the largest it has every been and is also the largest holder in the world. They are very, very ready for any sort of economic issue and likely won't be worried about moving their money to the gold standard if necessary.

Bitcoin should do fine, as long as there are markets for gold using Bitcoin it will do just dandy.