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World News See other World News Articles Title: China Builds a Gold-Based Alternative to the Dollar System, Modeled on Dollar Architecture Authored by GoldFix, ZH Edit Notes From a Podcast China is moving its people and its government away from the U.S. dollar. Citizens are being encouraged to buy gold. At the same time, the state is building a new system for trade and finance that does not rely on dollars. These two tracks are designed to meet in the middle. The aim is to create a stable middle backed by domestic savings in gold and a foreign trade system run in yuan. The Chinese government has aligned its own goals with the interests of its people. It is promoting the use of the yuan in trade with countries involved in the Belt and Road Initiative. Inside the country, it encourages people to use gold as a way to save. Outside the country, it offers gold as a guarantee to trading partners who accept the yuan. Gold is being used as a bridge between national goals and international trade. As at Home, So Abroad The BRICS countries are now being pushed toward a yuan-based system for trade. They will sell raw materials and receive yuan. They will then, ideally use those yuan to buy finished goods from China. This creates a closed loop. If the loop works, China will issue bonds in yuan to foreign holders. These bonds will offer interest, and that interest will be designed to keep pace with the value of gold as an inflationary/debasement hedge. BW2 = World on USD Standard → US on Gold-Convert Standard. BW3 = Brics on RMB Standard → CN on Gold-convert Standard. This is a copy of what the United States did after World War II. Complete with economic building and colonization. The U.S. told the world to use dollars and promised to back those dollars with gold. People believed the promise. China is offering a version of the same deal, with two changes. First, it is not promising to fix the price of gold or limit its upside. Second, it is allowing gold to be stored in many places. The goal is to avoid the mistakes that ended the Bretton Woods 2 system. BRICS countries will be free to peg their own currencies to gold or whatever they want. The yuan will be used as a medium of exchange. Gold will be used as a way to store value. The result will be a system where small countries can grow stronger over time. If they invest in their own economies, their currencies will grow stronger. If they do not, they will become dependent on China. They’re Setting Up Franchises, Like the US did. This system is voluntary. But the design pushes countries into one of two paths. If a country does not develop its own industry and only exports raw materials, its economy will become a satellite of China. If it builds up its own economy, it can enter a kind of partnership. China will help with infrastructure. It will sell goods. It will provide investment. China will retain influence by financing and franchising its model. Not unlike how the US rebuilt Germany and Japan after WW2. This is the same idea used in the past by colonial powers. They took resources and sold finished goods after developing markets. But here, countries are allowed to grow. If they want help, China will build airports.factories, and key infrastructure. If they want to stay dependent, they can. That choice will determine their place in the new system. Meanwhile, China is doing the same thing at home. It has allowed people to buy gold. It has offered gold-linked savings accounts. It is now promoting gold-backed investment products. Later, it will promote stocks using the gold as collateral. It wants people to trust the financial system. That trust is being rewarded with profits. The people see the government working in their interest. That trust will continue and deepen, as long as the United States is seen as a threat and the CCP does not abuse it. Get Brics to Buy CN Bonds The next step is for China to internationalize its bond market. Foreign holders of yuan will be able to buy Chinese bonds. These bonds will offer returns promising offsets to debasement risk as measured by Gold. The structure is clear. You sell resources in yuan. Your fallback SOV is gold. You invest in CN bonds. You buy Chinese goods. That is the full cycle. it is also the cycle post WW2; complete with their version of a Marshall plan China has also made moves to discourage others from (re)building their own manufacturing bases. It keeps value-added high margin production at home. It sells goods abroad. This gives it control over the value part of the supply chain, not just the raw materials. Gold is the key link. It provides confidence to other nations. It keeps the domestic population committed. It protects the system during the transition away from the dollar. The long-term goal is for the world to shift from gold to the yuan, once the yuan is trusted enough. Then, they can decouple from Gold if the opportunity presents itself or the zeitgeist demands it. China invented abstract money and it had markets long before capitalism existed. It’s not dumb. This is not a secret. It fits a pattern seen before. Major changes in global money systems tend to happen after wars. Today’s war is so far not kinetic. The tools are trade deals, savings systems, and bond markets. The design is already in motion. Didn’t Zoltan Pozsar once say (seemingly referring to the Ukraine war): Money will never be the same after this war is over. Maybe the Ukraine war was only one front in a global conflict1 China is taking what worked, refining it, and using it. That’s the plan anyway. Full podcast continues here Poster Comment: New Syria Fighting Erupts Overnight, Shattering Fragile US-Backed Truce Kurdish groups backed by US now clashing with Jolani's HTS forces in the north... https://www.zerohedge.com/geopolitical/syria-fighting-erupts-overnight-shattering- fragile-us-backed-truce Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest
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