China Is Using Gold To Replace the U.S. Dollar

About this video

• Video Title: China Is Using Gold To Replace the U.S. Dollar
• Channel: Andrei Jikh
• Speakers: Andrei Jikh
• Duration: 23:12

Overview

This video explains China's strategy to challenge the U.S. dollar's global dominance by relinking its currency to gold. It details the establishment of the Shanghai Gold Exchange, the "gold corridor" network of vaults, and the reclassification of gold as a Tier 1 asset under Basel III. The video also explores how this shift could enable countries to finance development without relying on the dollar, potentially impacting global finance, interest rates, commodities, and even Bitcoin.

Key takeaways

• China's Gold Accumulation: The People's Bank of China has become the world's largest buyer of gold, amassing significant reserves to challenge the dollar's status.
• Shanghai Gold Exchange and Gold Corridor: China has created a robust physical gold marketplace and a network of vaults to allow countries holding the yuan to exchange it for physical gold, thereby increasing trust in its currency.
• Basel III and Gold's New Status: Gold has been reclassified as a Tier 1 asset, and there's a theory it will be further upgraded to a High-Quality Liquid Asset (HQLA), enabling its use in financial instruments like repo and financing, traditionally dominated by US treasuries.
• BRICS Initiative and Alternative Financial System: China is leveraging the BRICS nations to build a parallel financial system backed by gold, offering financing for developing countries and bypassing the IMF and Western financial institutions.
• Impact on US Dollar and Investors: This shift could lead to a decrease in the dollar's reserve currency status and a potential surge in gold prices due to increased demand from financial institutions seeking to increase their gold reserves.