We just wanted to address an issue that is being brought up on many conspiracy-related message boards lately. There is an erroneous story going around that China has officially proclaimed that its Yuan, their basic currency component, is to be backed by gold. We all know the debates about the American dollar and how it is no longer held to the gold standard. The reason America’s dollar was no longer required to be backed by gold was because it was found that it was recognized enough in the international financial market that it actually had value itself. It also allowed the American government do something with a whole lot of gold without enraging anyone.
First of all, let’s get some facts out of the way. China would love to make this proclamation. China has long resented the dominance of the American dollar and wants nothing more than to make its own currency the international standard. However, China is a mighty big place with a heck of a lot people running around, and to back all those Yuans with gold would take an unthinkable amount of gold. It is highly unlikely that China has enough gold to make such a claim, despite being the leading producer of gold in the world. If such a thing as gold-backed currency was to make its way to the China, it would probably require support from many other nations (hmm…a New World Order perhaps?) or worse, that China take gold from other nations by force. So, you see, whatever its intentions, there is no way this story could be true at this moment in time. But in case you were wondering, what would that mean for America?
If China did announce that the Yuan was officially and demonstrably backed by real, physical gold, it would instantly become the leading currency in the world, taking the dollars place with no debate whatsoever. The fragile American dollar is backed by nothing, and the American government swimming in mountains of debt and ever borrowing more money does not increase market confidence. As we all know, OPEC has sought to leave the dollar behind a few times before, but ultimately failed to put the American dollar out to dry. But this bold of a move by China would force the world to bow to the Yuan. That would be bad, but is it that big of a deal?
You bet. Because America has no answer. They cannot respond by backing their own currency with gold, because everyone knows that’s impossible. They would have to deal in the Yuan as well, but how would they buy them? Would China trade Yuans backed by gold for basically worthless American dollars? And how much would they enjoy putting our nation back in the stone age almost overnight?
So, does this mean you should obey all the late-night commercials and stock up on gold? Well, for starters, as we pointed out above, this can’t really be happening at this juncture. But you need a lot of time to build up that gold, so is this likely to happen in the future? Well, not to sound like Hillary Clinton or anything, but the answer is what difference does it make. If this crisis ever comes to fruition, you can bet the government will take your gold by force, either issuing you a soon-to-be worthless voucher (ever heard of a United States Treasury Bond) or better yet, lock you in prison for withholding your gold as an enemy combatant. If it got to this stage where the government actually needed gold to run itself and the nation, they would go door-to-door taking gold by force.
Of course, you could choose to fight them off with your assault rifles, right?