Question: Where does China get all those dollars to buy the gold? Answer: From their trillion-dollar trade surplus with the West, and especially the US.
But, shouldn’t those dollars go to the companies and workers that produce the products that are sold for dollars? Not in China.
You see, the CCP exploits cheap Chinese slave labor to make all the products the West buys, and then converts the excess dollars, not into US Treasurys, but into gold.
Once they have sufficient gold reserves, they can offer renminbi backed by gold as a reserve currency for world trade, replacing the dollar, which is only backed by the full faith and credit of the US.
All those people on CNBC and cable channels selling you gold as a secure retirement investment are actually selling you stock in Chinese slave labor.
If Chinese workers were paid wages comparable to Western workers, and if Chinese were not banned from exchanging yuan for dollars in a legitimate foreign exchange market, Chinese exports would increase in cost, and the CCP would no longer be able to steal market share and destroy manufacturing jobs in the US and Europe.
Unfortunately, the West still thinks the CCP wants fair trade deal and low tariffs. The CCP bypasses the nominal tariffs by transshipping goods to other low-tariff countries for shipment to the US and Europe. Their trade surplus is with these countries, part of an illegal scheme to fool Trump’s trade negotiators.
The CCP is a criminal organization that has enslaved its people to suck wealth from the West and build a global empire that will rule the economic world from the shadows.
And nobody here gets it yet.
You, me, a good %age of FR, the author of this article, but the people making decisions are of two types:
- Some, IMO including Trump, working on the problem through returning domestic energy and goods manufacturing and tariff power, which is effective because as you noted the people *in* China are being enslaved and so don’t constitute much of a market per se; and
- Others know full well and keep pretending otherwise, and really provoking the question of why and to what end. Are they just short-term self-serving, beholden to the PRC, or have some other idea or ideology they pursue?
Question: Where does China get all those dollars to buy the gold?
AI:
Gold mining in the People’s Republic of China has propelled the country to become the world’s largest gold producer since 2007.
They have been ditching US debt instruments in record amounts- they don’t need dollars.