The Gold IRA Company

China & Russia Are Coming After The Dollar

Article by SchiffGold in Zero Hedge

We’ve reported extensively on the central bank gold-buying spree that has been going on for nearly two years.  Russia and China have let the way, along with several other countries including Turkey, Kazakstan, India and Poland.

Central banks are buying gold to diversify reserves and minimize exposure to the dollar.  This has been the mainstream narrative and it’s true.  But China and Russia have a bigger geopolitical objective.  They want to undermine dollar hegemony and reduce the United States’ ability to weaponize the dollar as a foreign policy tool.

By-and-large, the mainstream has ignored this narrative.

But some people in the mainstream appear to be catching on.  An article recently published by MarketWatch by Brett Arends warned America to “watch out” because Russia and China are stockpiling gold and that “this could be the start of those countries’ attack on the dollar.”

Interestingly, Arends started the column asserting he “is not a gold bug,” and rolling out some of the usual mainstream tropes against the yellow metals.  But he goes on to nail the motive behind Russia and China’s move to hoard gold, citing hedge fund manager Crispin Odey.

Some of America’s biggest geopolitical rivals were stockpiling gold. Especially China and Russia….And there’s an obvious reason for China to buy gold.  It wants to break up the global hegemony of the U.S. dollar – the hegemony that former French President Charles d Gaulle called America’s exorbitant privilege.”  It wants to make its own currency, the renminbi, a world player.  And Odey argues that buying gold bullion is a natural move.  Gold reserves should add to world confidence in the Chinese currency.”

Of Course, this could be good for gold, and not only due to the demand created by central bank-buying.  Arends quotes Odey who said, “You want to do what the central banks are doing.”

Arends doesn’t make any predictions about how high gold could go in the future.  But he concedes it could rise significantly.

To read this article in Zero Hedge in its entirety, click here.

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