Chinese Gold Standard Would be 'Game Changer” - Bloomberg Intelligence | Kitco News

Could gold, the world's longest running currency be used to create a new order in global currencies? The Chinese central bank is said to be considering backing its yuan with the yellow metal. This move, says Ken Hoffman, Global Head of Metals and Mining Research for Bloomberg Intelligence, would be a "game changer." Why would China consider such a move? Hoffman explains that Chinese policy makers are already trying to establish the yuan as a reserve currency, and backing it with gold would help attract foreign capital inflows. China is expected to receive approval from its central bank for a yuan-denominated gold fix, with a potential for an announcement as early as next week. Hoffman explains that a gold standard would not necessarily create a big constraint to the Chinese central bank, as many believe. “It could be at any price they fix. There’s a lot of things that they can do to make this work,” he says. Hoffman estimates that to create an exchange rate of one ounce of gold for every $64,000, the country would need about 10,000 metric tons of the metal. "That’s nine times the nation’s official holdings and about 6 percent of all the bullion ever mined globally," Hoffman says. Moving to a gold standard may also be a question of power for China. Hoffman says that when the U.S. adopted a gold standard after World War II, it emerged as the main power in the International Monetary Fund. In 1971, the U.S. ended the use of the gold standard and rendered the dollar a fiat currency. If China decides to go into some form of a gold standard, Hoffman says it would make the rest of the world view the metal as a currency again. “If they go for it, we’d be talking about fireworks,” he says. Kitco News, June 25, 2015.

[MrLTiger]

I agree with most of what he says, except one thing: he said there isn't enough gold in the world to back all the money. I believe what he meant was "there isn't enough gold in the world, at the current price, to back all the money". The amount of gold required is only a function of the price. If you fix the price high enough you can back any amount of currency. A Bretton-Woods style gold standard would require a gold price of at least 5000$, but a classical gold standard (from between 1873 and 1933) would require a price of gold of over 100 000$. In a world where you can create any amount of dollars you want, it's just a supply of meaningless numbers.

[TallTiger]

It's not the AMOUNT of Gold. It is the PRICE! The great equalizer.

[minmaungmaung]

The world should dump US Dollars and use other currencies such as Yuan and gold cause America is printing Dollars in trillions which is not fair to the world, especially those countries who hold their foreign exchange in US $. America has no fiscal ettiquet when trying to save it's Wall Street.

[fightfannerd]

how much Gold does the central banks really have ?

[RandyHartono]

It's happened now 19th April 2016

[johnnybates]

zero chance they gold standard. wake up people. what happens to a central bank when they go on to a gold standard with hundreds of billions in outstanding notes? come on now you can figure it out. use your heads.

[expo]

what does this mean for gold and silver? is this good news?
thanks

[leolove]

NOTICE HOW SHE IS NOW SAYING THE WORDS " GOLD REPORT "

[wwowwpoopy]

the thing about why gold is a good idea is that you have a fixed amount in circulation and a fixed amount you can mine at any given time. Printing money from nothing is much harder to do. Inflation is what kills countries not debt because inflation gives you a way to mask the debt for a period of time.

[wwowwpoopy]

it never stopped working. we got off it because of corruption

[Alfie_x]

It's a game and you and your familys pay and pay and pay

[askformoreinfowhichyouwont]

2:33 "Not enough gold in the world to do that" (back up the entire money in circulation) case closed, another propaganda bs in circulation. I aint buyin, I buy gold.