“China Yuan Gold Fix Is Part Of A Planned Shift From Dollar”: China’s Bocom
China’s shift to an official local-currency-based gold fixing is “the culmination of a two-year plan to move away from a US-centric monetary system,” according to Bocom strategist Hao Hong. In an insightfully honest Bloomberg TV interview, Hong admits that “by trading physical gold in renminbi, China is slowly chipping away at the dominance of US dollars.” Gold, silver, and petroleum “are the three USD-based commodites that China wants most control of” according to Hong but “gold in particular is one of the commodities that China is hoarding very hard.”
Finally, as Hong explains above, for those who suggest that China will never dump Treasuries or ‘hurt’ the dollar, since they hold so much dollars on their balance sheet, things are chganging rapidly – “The gold reserve on the China balance sheet has almost doubled since 2009. By holding gold, and moving away from a US-dollar centric system, we actually require less US dollars.”
