Did China just ignite the rocket to a gold launch? On May 8th, 2023 China's banking system took a major change. On that day, it allowed depositors to link their regular bank accounts to China’s gold accounts. This is huge. This gives the option of everybody who holds fiat Chinese money the ability to instantly back that money with gold. Real money, Honest money.
When one considers how the Chinese government has thought about gold over the years, this is a big change It was my understanding that less than 25 years ago, it was illegal for Chinese citizens to own gold. But after the turn of the century, they were allowed to buy gold from dealers, banks, and even vending machines, as long as they did not send it out of the country. In fact, China does not export any of its gold whatsoever. Every ounce of gold mined in China stays in China.
So how will this affect the US? Well, consider for a moment that the Chinese population and the US population have a racial 4 to 1. That means that for every Chinese citizen that converts their fiat money to gold-backed money, four Americans will be depleted of their potential to buy that gold. Not that that matters, because most of Americans aren't aware of the true value of gold and the need to own it. (Which is why I want to educate people. I wish everybody would buy a ‘Buy Gold’ T-shirt and wear it in public to educate others).
But let's get back on point. If China's bank accounts are now tied to their gold accounts and the population of China will be converting their money and buying up that gold, that means those gold accounts would need to be filled and replenished with gold So they must import more gold. Will this come from the West?
Our government tells us that we have over 8000 tons of gold in the US vault, but it has not been audited since 1956. China only claims 2000 tons of gold, but it is believed there it is much, much higher. More likely 20 to 30,000 tons. If the Chinese are going to need to restock their gold and it will be the Western gold that does so, common sense tells me that gold will soon become much scarcer in the United States and Western countries. I predict much higher prices We'll see, but I say get ready for blast-off.