Gold Media often mentions how China will Crush the Dollar

Such a scenario will send gold skyrocketing

Gold may be sent skyrocketing instead when China implodes

Watch the video commentary to “China to Crush Itself”

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A common gold pumper narrative is that the dollar will collapse aided by China’ desire to “end dollar hegemony”. This will aid in sending gold soaring. China will be aided, the narrative goes, by the BRICS who are fed up with the dollar and will DE-DOLLARIZE!

China also is smart according to the gold promoters, they follow the teachings of SUN TZU and like gold- further evidence of their superiority. The U.S. in contrast is stupid, doesn’t make anything, is debt ridden and the worst offense of all- its citizens don’t buy gold like the Chinese do.

The road to gold riches starts with China and take you along the Belt and Road- more evidence of China’s genius (the U.S. led QUAD is never mentioned)

So collapse, led by china is what gold and silver holders hang their hat on- indeed they insists a mathematical certainty and a multi-polar world will emerge. China’s got gold and Sun Tzu and unbeatable combination- the US just has worthless green pieces of paper and debt.

The anti dollar mentality started with the end of the Bretton Woods Agreement in 1971 when the US stopped allowing foreign central banks to redeem their dollars for gold at the U.S. Treasury. The end of the dollar narrative was strengthened in 2009 when the Federal Reserve launched a series of quantitative easing programs.

Unnoticed is the Fed hasn’t done QE since 2014. Indeed the Fed has done seven rate hikes since 2015, is reducing its balance sheet and the economy is adding more tax revenues. -Not ideal but NOT japan, ECB BOE and certainly not CHINA!

Also never mentioned is the massive debt that China has accumulated to build its GDP & infrastrure -which is NOT an asset in collapse, but a liability. The china apologists also argue its internal debt so its not a big deal. This sounds like social security administrators dismissing concerns when talking about social security.

Few note that China runs on dollar. State owned banks and state owned enterprises issue dollar denominated debt, China’s second largest trading partner is the US and that China imports massive amounts of oil and natural gas from the US. China also holds $1.1 trillion in US Treasuries and about the same amount in dollars.

END OF THE PETRO DOLLAR is yet another doom scenario often cited, ignoring that Saudi Arabia has added 50% more US Treasuries to their reserves over the past year. The end of the petro dollar scenatio also ignores that Saudi Arabia is no longer the world’s largest oil producer= the U.S. is. So if countries need dollars to buy oil, they will need dollars to buy oil from the U.S AND Saudi Arabia.

China’s centrally planned economy is based largely in part on exports to the U.S. and elsewhere.

China/Gold fans don’t mention China’s social credit scoring (keep you off planes and trains, prevent you from owning property), internet censoring totalitarian society and centrally planned economy. These are all ignored or dismissed fine because of the China/gold/Sun Tzu/crush the dollar narrative.

The gold promoters don’t mention, for all the plaudits they heap on the Yuan it is less than 2% of foreign reserves of banks- due to capital controls, lack of confidence in Chinese reporting, its internal mounds of debt and the ever present threat that it might be devauled by the Chinese government of market or both.

China holds the cards, the anti dollar crowd crows – they are going to “stand for delivery on comex0″ and cause it to default, they might roll their gold out into a stadium and ask the US “where’s yours? and then its GAME OVER!

Only collapse will make some PM holders happy as they believe it is their ticket to the “greatest wealth transfer” in history. So, like Linus waiting for the Great Pumpkin or Godot they sit and hold and watch videos and read blogs posts repeating the GAME OVER scenarios that involve end of the petro dollar, end of dollar hegemony, multipolar world, gold backed yuans and other GAME CHANGERS.

BUT there are ways that gold can go higher without a collapse- ie economic boom/wealth factor creating demand for gold jewelry– Indeed India’s and China’s gold demand is a result of the wealth they generated from their massive credit creation.

Gold can also go higher, instead of from a dollar collapse but a Chinese collapse from either too much debt or an attempt to deleverage too quickly.

The warning signs have been there for years. Last year a PBOC governnor warned of a potential “Minsky moment”. China is trying to deleverage at a time when the US threw them a curve ball- with the tariffs -now they have to subsidize those companies more to make up for lost sales.

The Yuan is in free fall now- June was its worst month ever, the Shanghai Stock Exchange and China had a quarterly account deficit.

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