Unless you live under a rock (and some days I wish I did), all eyes are on which bank will fail next.

We knew this was coming. Decades of Zero Interest Rate Policy, QE, and risky fractional reserve practices have consequences.

Superpowers like Russia and China are eyeing America’s financial vulnerabilities while the Fed, Congress, Treasury, and Wall Street play musical chairs and trip over each other like Keystone cops.

Recently the U.S. and NATO have discussed sanctioning China if it supplies arms to Russia. This would backfire.

U.S. sanctions on Russia appear to have failed (if not backfired). Likewise, sanctions against China may be disastrous for these reasons:

  1. China is the second largest foreign holder of U.S. debt ($900 billion in Treasuries while Japan has $1.1 trillion).

  2. In 2021, China's GDP was roughly 10 times larger than Russia's.

  3. Chinese banks had more than 30 times as many assets as Russian banks.

  4. Total foreign investment in China was more than six times the amount that had flowed into Russia.

  5. China is the world's top trading economy and the number one exporter of manufactured goods by a wide margin.

  6. China is the largest lender to emerging market economies.

China and Gold

The “Belt and Road” project includes 65% of the world. And who is left outside looking in?

The answer is UNCLE SAM.

China has been busy connecting Asia, Africa, and Europe.

Chinese officials admit they are stockpiling gold as their powerful magnet to attract allies in their economic war against Team West.

  • Beijing says it has signed cooperation documents with 149 countries and 32 international organizations while taking on 3,000 projects.

  • China states its goal is to expand to over 200 countries and has spent $1 trillion as part of Beijing's Belt and Road Initiative to open cross- border trade routes.

  • Honduras recently stated plans to open diplomatic relations with China.

  •  Mexico has also signed on. Mexico is the 2nd most robust economy in Latin America. Brazil is #1, and they're already on board.

The Belt and Road initiative is nicknamed "the golden road."

It is the largest infrastructure project in human history, connecting 65% of the world's population and 50% of the global GDP. Moreover, it links these countries through bridges, roads, railways, and maritime channels.

Now think about the demand for silver

Building out new physical and digital infrastructure for 65% of the world requires metals, including silver. This is huge for silver and equally significant for de-dollarization.

And it's all settling on a potential Chinese gold-backed digital yuan. Countries increasingly do not trust each other's fiat currencies.

However, they do trust gold and silver.

Gold plays a vital role in the financial reserves for China and these emerging economies. Below are some gold-centered talking points on how China influences new countries to sign on to their trade union.

  • China targets emerging markets incentivized to accumulate gold as part of their reserves. This manages risk from currency holdings while also promoting stability during economic turmoil.

  • Gold offers a hedge against the eroding purchasing power of currencies (mainly the U.S. dollar) due to inflation.

  • Gold has an inverse correlation with the US dollar. Gold prices tend to rise when the dollar falls in value, protecting central banks from volatility.

The Chinese are speaking to over 149 countries about joining a gold- backed currency to take down the U.S. being the global reserve currency.

They conduct their business proposals in business suits using face-to- face old-school diplomacy methods.

In the past three weeks, while the domestic media has been saying nothing is wrong with the economy and your bank deposits are safe, China has been brokering deals with Russia, Iran, and Saudi Arabia.

The Biden administration is weaponizing the U.S. dollar via sanctions. In response, more countries are moving to escape.

Dollar depreciation (inflation) is a direct consequence of ZIRP, financing endless wars, and a wave of bail-outs within a system that privatized profits and socialized losses.

In closing, look at who has bought gold over the past twenty years.

How many Western nations do you see on the list below?

Money Metals Exchange and its staff do not act as personal investment advisors for any specific individual. Nor do we advocate the purchase or sale of any regulated security listed on any exchange for any specific individual. Readers and customers should be aware that, although our track record is excellent, investment markets have inherent risks and there can be no guarantee of future profits. Likewise, our past performance does not assure the same future. You are responsible for your investment decisions, and they should be made in consultation with your own advisors. By purchasing through Money Metals, you understand our company not responsible for any losses caused by your investment decisions, nor do we have any claim to any market gains you may enjoy. This Website is provided “as is,” and Money Metals disclaims all warranties (express or implied) and any and all responsibility or liability for the accuracy, legality, reliability, or availability of any content on the Website.

Recommended Content

Recommended Content

Editors’ Picks

EUR/USD holds near 1.0850 after US PMI data

EUR/USD holds near 1.0850 after US PMI data

EUR/USD holds steady at around 1.0850 in the second half of the day on Wednesday. The mixed US PMI data limits the US Dollar's gains but the risk-averse market atmosphere doesn't allow the pair to gather recovery momentum in the American session


GBP/USD recovers above 1.2900 as USD struggles to gather strength

GBP/USD recovers above 1.2900 as USD struggles to gather strength

GBP/USD trades modestly higher on the day above 1.2900 on Wednesday. The US Dollar struggles to build on Tuesday's gains following the mixed PMI data for July, allowing the pair to stay in positive territory in the second half of the day.


Gold extends recovery, advances above $2,420

Gold extends recovery, advances above $2,420

Gold builds on Tuesday's recovery gains and trades above $2,420 on Wednesday. The pullback seen in the 10-year US Treasury bond yield and the US Dollar after US PMI data help XAU/USD stretch higher during the American trading hours.

Gold News

Bitcoin price volatility expected amid speculation of Kamala Harris joining Bitcoin Conference with Donald Trump

Bitcoin price volatility expected amid speculation of Kamala Harris joining Bitcoin Conference with Donald Trump

Bitcoin price struggles around $66,000 on Wednesday. US spot Bitcoin ETFs experienced minor outflows on Tuesday, coinciding with the continued movement of Mt. Gox funds for repayment, which could exert downward pressure on Bitcoin's price.

Read more

July PMIs point to a very sluggish Eurozone recovery

July PMIs point to a very sluggish Eurozone recovery

This is another report that will not please the ECB. The July PMIs show that the eurozone economy is losing further momentum, as both the manufacturing and services sectors see activity slowing.

Read more