Will China Back The Yuan With Gold?

Superfreak said:
ahh... missed this post... a devaluation of our currency would actually help our debt problem, but it would hurt those living off of income and it would devalue assets for those that saved. Bottom line, it would reward those that outspent earnings (including the govt) and it would punish those that saved.
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Alternative bottom line: it would help people who don't have much money and/or have lots of debt but wouldn't (in and of itself) help people who have lots of money and/or are owed lots of money.
 
aeprga said:
Alternative bottom line: it would help people who don't have much money and/or have lots of debt but wouldn't (in and of itself) help people who have lots of money and/or are owed lots of money.
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which is what I stated. It would help the irresponsible and hurt the responsible.
 
aeprga said:
Alternative bottom line: it would help people who don't have much money and/or have lots of debt but wouldn't (in and of itself) help people who have lots of money and/or are owed lots of money.
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To clarify a bit... MOST of what you stated above is correct. It would not help those who do not have much money. It would reduce their purchasing power.
 
Superfreak said:
I don't care if you are a fan or not. It is precisely what a deliberate devaluation would do.
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Because all people who have little money and lots of debt are irresponsible and all people who have lots of money are responsible, right? And, of course, you're not making a judgment about a policy that "rewards" the "irresponsible" and "punishes" the "responsible."

It is possible discuss the effects of devaluation without these sorts of moral judgments.
 
aeprga said:
Because all people who have little money and lots of debt are irresponsible and all people who have lots of money are responsible, right? And, of course, you're not making a judgment about a policy that "rewards" the "irresponsible" and "punishes" the "responsible."

It is possible discuss the effects of devaluation without these sorts of moral judgments.
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I did not say ALL... I also clarified that those with little money and little debt would be hurt as well.

As for the majority of those that have run up debt, yes, in most cases it is their own doing. Obviously there are exceptions. But speaking generally, the majority are irresponsible. But you don't see it that way because you think more debt makes debt problems better.
 
Superfreak said:
I did not say ALL... I also clarified that those with little money and little debt would be hurt as well.

As for the majority of those that have run up debt, yes, in most cases it is their own doing. Obviously there are exceptions. But speaking generally, the majority are irresponsible. But you don't see it that way because you think more debt makes debt problems better.
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Like I said, I prefer not to make moral judgments in this context.
 
Abraxas said:
So why is China buying up so much gold?

http://www.gold-eagle.com/article/gold-backed-renminbi-yuan-looms-horizon
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Did you even read your own link?

1) The 1,054 tonnes of Gold on that link is from 2009... the last year China actually released its holdings info. So even though your chart says 2013... China's number is from 2009.

2) Where in your article do you see that China has bought a lot of gold? Best guesses are they doubled to tripled their position since 2009. So maybe about 2500-3000 tonnes at this point.

3) As your article stated, it would take substantially more gold (about 60k tonnes) to get them enough gold to actually back their currency in a similar manner to the US. That, as your article stated, is about 20+ years worth of worldwide production.

4) As I stated, to go to a gold standard... they need to buy a lot more gold. That would tend to have an adverse effect upon the dollar. That would make the US dollar worth less (not good for a country that holds a trillion dollars in our debt) and it would make Chinese exports more expensive (not good for China). Bottom line, it does not make economic sense in any regard.

5) That said, there is no doubt China would LIKE to be the reserve currency... every country would. But as long as they have a lack of transparency in their government, business, etc... they will not be accepted as a replacement for the US Dollar... even if they do try in vain to back their currency with gold.
 
Superfreak said:
Did you even read your own link?

1) The 1,054 tonnes of Gold on that link is from 2009... the last year China actually released its holdings info. So even though your chart says 2013... China's number is from 2009.

2) Where in your article do you see that China has bought a lot of gold? Best guesses are they doubled to tripled their position since 2009. So maybe about 2500-3000 tonnes at this point.

3) As your article stated, it would take substantially more gold (about 60k tonnes) to get them enough gold to actually back their currency in a similar manner to the US. That, as your article stated, is about 20+ years worth of worldwide production.

4) As I stated, to go to a gold standard... they need to buy a lot more gold. That would tend to have an adverse effect upon the dollar. That would make the US dollar worth less (not good for a country that holds a trillion dollars in our debt) and it would make Chinese exports more expensive (not good for China). Bottom line, it does not make economic sense in any regard.

5) That said, there is no doubt China would LIKE to be the reserve currency... every country would. But as long as they have a lack of transparency in their government, business, etc... they will not be accepted as a replacement for the US Dollar... even if they do try in vain to back their currency with gold.
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The reasons why China is buying up gold were disclosed by Wikileaks. So when was the last time you could demand gold for your dollars? If you could do that then China would be demanding that the US stuff their Treasury bonds up their rear ends and give them the equivalent in gold.

http://www.zerohedge.com/news/wikileaks-discloses-reasons-behind-chinas-shadow-gold-buying-spree
 
Abraxas said:
The reasons why China is buying up gold were disclosed by Wikileaks. So when was the last time you could demand gold for your dollars? If you could do that then China would be demanding that the US stuff their Treasury bonds up their rear ends and give them the equivalent in gold.

http://www.zerohedge.com/news/wikileaks-discloses-reasons-behind-chinas-shadow-gold-buying-spree
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LMAO... So... an article from 2011 telling you that 'wikileaks' knows that China is buying gold. Why gold is cheap at $1850 and ounce. etc...

Gold is now just over $1300 an ounce. So who exactly is selling the gold to drive the price down?

Again... your first link did a good job describing just how hard it would be for China to 'back their currency' with gold. You ignored everything I wrote and just posted a severely outdated article. If you do not wish to actually have a discussion, just say so.
 
Superfreak said:
LMAO... So... an article from 2011 telling you that 'wikileaks' knows that China is buying gold. Why gold is cheap at $1850 and ounce. etc...

Gold is now just over $1300 an ounce. So who exactly is selling the gold to drive the price down?

Again... your first link did a good job describing just how hard it would be for China to 'back their currency' with gold. You ignored everything I wrote and just posted a severely outdated article. If you do not wish to actually have a discussion, just say so.
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Some discussion, I firmly believe that China is working towards an alternate reserve currency. Gold is now going up having bottomed out, I predict that it is heading northwards. By the way, they don't have to have a 1:1 equivalence for Yuan to gold, it could be a lot less maybe even as low as 5%.
 
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