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Avery Goodman: The real reason China is buying up the world's gold
11:29p ET Wednesday, May 13, 2015
Dear Friend of GATA and Gold:
Colorado securities lawyer Avery B. Goodman writes tonight that China's vast acquisition of gold is meant to create a mechanism for controlling the currency markets and devaluing the yuan against the U.S. dollar as convenient while escaping charges of currency market manipulation.
Drawing on a crucial U.S. State Department document unearthed by GATA --
-- Goodman writes: "Whoever controls the price of gold against their own currency controls the price of gold against any other currency that gold is denominated in. When China increases the number of yuan it takes to purchase an ounce of gold, the dollar will respond by rising in value, even though China will not be pegging its yuan directly against the dollar." Chinese goods thereby will become cheaper against U.S.-made goods, preserving China's advantages in world trade.
Goodman continues: "Control over the worldwide currency markets is why China wants to control the gold market. It is already taking affirmative steps to establish that control, and that is what is behind the announcement that the Shanghai Gold Exchange will establish a yuan-based gold fix before the end of 2015."
Goodman's analysis is headlined "The Real Reason China Is Buying Up the World's Gold" and it's posted at Seeking Alpha here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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