Recently, China took a huge leap forward economically. On October 1st, the Chinese Yuan gained the status of being an IMF reserve currency.
Reserve currencies are those that are globally accepted as means of exchange. When countries make payments to each other they use a reserve currency, rather than their own.
Now that the Yuan has been accepted as a reserve currency, countries will increasingly conduct their transactions with the Yuan. This means the Yuan is a competitor to the US.
For now, the US dollar is still the most popular, used in 41.73% of global payments while the Yuan is at 10.92%. However, the continual printing and devaluing of the US dollar will cause the dollar to decrease in popularity.
The only reason the Fed is able to print as much money as they like is because of America’s status as the leading world currency. As America’s financial situation worsens, global payments will increasingly be made in foreign currencies such as the Yuan.
When the financial situation finally reaches the breaking point and collapses it will have devastating effects not just for the typical American, but for the entire world.
China wants to become the world’s leading reserve currency and has been preparing for years. The effects of China’s actions will cause the US dollar to collapse. With the US dollar out of the way, the Yuan will be set to take over as the world’s premier reserve currency.
China’s actions these past few years have been very telling. It’s no secret that China has been buying massive amounts of Gold lately.
China has over 1,800 tons of Gold right now, but that’s only if you believe the numbers they report. In reality, China keeps their true reserves secret. When they reveal their entire Gold reserves it will likely be thousands more than they report right now.
This unveiling of their Gold reserves will cause panic in the global finance sector as countries scramble to sell their US dollars in favor of buying the Chinese Yuan. This will cause the value of the US dollar to lose its special status and suffer the delayed consequences of it being printed en masse.
On the surface level, the value of a country’s currency is based on its economic production, among other things. However, at the end of the day it all comes down to the country’s ability to back its currency. Namely, with Gold.
When China reveals that its own Gold reserves dwarf the US’s, the popularity of the Yuan will skyrocket and the US dollar will collapse.
There is only when thing that can protect you when that happens. Gold.
If you’re expecting to be saved by crooked politicians or the corrupt US government you’re dead wrong.
Gold is the only thing that will offer any protection when the US dollar collapses. It is accepted globally and holds its value independent of national currencies.
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Article courtesy: Noble Gold
