While doing the research for this article, it appeared the leaders of China have been listening to Ron Paul while most leaders in the U.S. continue to mock him.
Though history proves fiat currencies fail, central banks, including the Federal Reserve are bound and determined to convince the world that this time history wont repeat itself.
So, if you were China and you owned $1.2 trillion in U.S. bills, notes, and bonds, what would you do to hedge your bets and cover your fanny? Exactly what China is doing: buying gold. In fact, they are buying so much; it appears they are preparing for a world beyond the fiat dollar. A future world in which the renminbi backed by gold could become the dominant reserve currency.
State-owned China National, CEO Sun Zhaoxue commented on the acquisition of African Barrick Gold Ltd, saying, As gold is a currency in nature, no matter if its for state economic security or for the acceleration of renminbi internationalization, increasing the gold reserve should be one of the key strategies of China. So, in spite of the fact China is the world's largest producer of gold, it appears important enough for China to still acquire interest in mines in other countries.
And Zhaoxue sounds suspiciously like Ron Paul when he says, Gold is currency.
But then we hear Ben Bernanke, chairman of the Federal Reserve Bank, telling students at George Washington University how impractical a gold backed currency is, I mean, what you have to do to have a gold standard is you have to go to South Africa or some place and dig up tons of gold and move it to New York.
So while Bernanke is teaching students its too much of a problem to mine and ship gold to the U.S. to fill our void, the Chinese are buying up the mines in Africa.
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