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Chinese government newspaper suggests return to gold standard
10:05a ET Tuesday, August 27, 2019
Dear Friend of GATA and Gold:
The English-language edition of the Chinese government's newspaper Global Times published on Sunday a pretty dispassionate commentary attributed to the Beijing-based public policy research consultancy Anbound (http://www.anbound.com/AboutUS.php) advocating the world's return to a gold standard for currencies.
"From the perspective of the global financial system," the Anbound commentary says, "the dollar is a super-currency that has a strong backing of global geopolitics.
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"The status of the super-currency is supposed to be unshakable, but the problem is that the United States itself wants to give up this status and pursue a future characterized by President Donald Trump's freestyle, thereby leaving the world market in uncertainty.
"What will 'post-dollar era' currencies look like? What currency can replace the status of the dollar?
"In fact, this will be a process of continuous trials. It would be hard for the Bretton Woods conference to succeed in the current era, so the new super-currency has to be selected through extensive experimentation."
After dismissing cryptocurrencies and regional currencies, Anbound writes:
"What's left is the gold standard. After the collapse of the Bretton Woods system, the questioning of the gold standard has never stopped. The gold standard essentially represents a world financial order. When an old financial order faces collapse, it is necessary to create a new financial order.
"When the U.S. decoupled the value of the dollar from gold, it actually committed to take on the responsibility of world finance, based on which a new financial order was formed. It is this financial order that has allowed the U.S. to enjoy huge development dividends. Now the U.S. is unwilling to continue assuming and fulfilling such responsibilities for the current world financial order, and Trump has continuously intervened in the operation of the Fed and global financial market order. This development points to the necessity of seeking and building a new financial order, which is the fundamental basis for the re-emergence of the gold standard in the world financial market.
"So the gold standard is an effort by the world market and financial system to balance the 'Trumpian future.' It means that the U.S. can take its own path and Americans will have the right to look after themselves, but other countries will also have the right to make their own choices. In other words, this will be a process of rebalancing in the world financial market, forcing the U.S. to face up to problems. It needs to make a choice: Fulfill the obligations and responsibilities for international finance, or abandon the international status of the dollar."
The editor of the Global Times, Hu Xijin, increasingly is cited in news reports around the world as a de-facto spokesman for the Chinese government. So his newspaper's publication of the Anbound commentary may be taken as more evidence that China sees gold as a primary vehicle of escaping domination by the U.S. dollar.
That may explain the unusual strength of the gold price in recent months, especially since many analysts long have maintained that China has not been fully reporting increases in its gold reserves.
The Anbound commentary in the Global Times is headlined "World Needs to Prepare for Return to Gold Standard as Washington Disrupts Financial Order" and it's posted here:
http://www.globaltimes.cn/content/1162628.shtml
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
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