China’s New Gold System Takes Aim at the Dollar

0:00So it looks like China's preparing for a world where the US dollar is no longer in charge, and one of the biggest clues is what they're doing with gold. China Central Bank has now bought gold for 22 months straight, bringing their total holdings to 2400 tons. And in August alone, China added its largest holding in nearly three years. But those are just the official numbers. So far this year, China's imported over a thousand tons of gold more than it did all last year, and it's only October. But the central bank is only claiming 80 tons of that, so where is the rest going? You could speculate it's going to households or everyday investors, but Goldman Sachs, as well as many others, speculate that the official holdings could be nearly double what's being reported. But here's where it gets interesting. See, China isn't just buying gold. They're reducing

1:00their reliance on US debt. They're increasing trade outside of the dollar and they're building the infrastructure to ensure that they sit at the center of a new gold backed monetary system. And when you put all these pieces together, it starts to look far less like a country that's just betting on gold, and far more like a country that's getting ready for a new world order. But to understand just how big this could be and how it could impact all of our money, we first have to understand what actually causes a world order to change. Because the last time that the monetary system was rewritten, the dollar came out on top. History is made up of patterns. There's always a fight for control, a fight for power that ends up in a war, and the winners of that war are the ones who get to write the rules. In 1944 World War II was coming to an end, and leaders from all over the world came together and Bretton Woods, New Hampshire,

2:01to decide what the new world order would look like. Now at that moment, the US held roughly two thirds of the world's gold. They had the money, the military, and the economic power, so they got to set the rules. Essentially, the dollar was put at the center of everything. All other currencies were tied to the dollar, and the dollar was tied to gold at $35 an ounce. Now the US didn't get lucky in this new world order. It came after a massive shift of power and wealth. Countries were buying military equipment from the US and shipping their gold overseas. Which brings us back to present day China. Because if gold put the US at the center of decision making the last time, you can probably guess why China buying so much gold has gotten my attention today. But buying gold is only step one. See, if China was only concerned about the dollar losing value, then they would stop at just buying gold, a way to hedge their bets, and diversify, but that's not what China is doing. They're building a new

3:05system around physical gold. Think of it this way. If you go to a casino and you transfer in cash for chips, it means that you want to play the game. But if you go and build your own casino, it means you want to control the game. China is not only getting chips, but they're building the casino. For decades, two of the most important centers for gold have been London and New York, Western dominated institutions, meaning that China could in theory have the most gold, but it doesn't do them much good if prices still set in the West. See, London and New York often use something called re-hypothication, a process where they create layers of paper claims on top of one physical asset. This makes it look like there's far more supply than demand, and artificially suppresses the spot price of both gold and silver. But China is working to end this system, and it all starts in Shanghai. China has created the Shanghai Gold Exchange,

4:07which increasingly is putting physical demand pressure on their paper market manipulation. But the real power comes from what they're connecting to it. See, most of global trade today still revolves around the dollar, but what China is doing is they are offering an alternative, settle outside of the dollar in real physical gold. And if you're wondering how all of this impacts you, it's because the rest of the world needing dollars has been America's greatest advantage. The need for dollars and dollar assets is what's allowed the US to run up the debt it has. Without that demand, you could expect to see interest rates rise, the debt rise, as well as the value of your dollars, the value of your paychecks, your saving, your retirement, significantly decline. And there's one commodity where this is especially important. Oil. Think about oil today. Every country needs oil. And thanks to the petrodollar agreement,

5:11the majority of oil has been priced and traded in US dollars. But China's coming for that agreement by offering an alternative. Physical gold settlement vaults built all over Asia, including one inside Saudi Arabia's borders, meaning that you will now have a physical vault connected to the Shanghai Gold Exchange right in the center of the oil exporting region. See up until this point, there's been no good alternative. Imagine that Saudi Arabia sold China a billion dollars worth of oil. And China wanted to buy that in yuan. Well now Saudi Arabia has a problem. What do they do with a billion yuan? They might not want it, need it, don't know how to trade it or offload it, or they might not want to trust it or prop up a different currency than the dollar and find themselves in a 2.0 situation of what they've been stuck in the last 60 years. But if they're offered a physical vault inside their borders, where they could take that one billion yuan and trade it into

6:18physical gold, a true store of value, one that knows no language or politics that can't be frozen or seized or sanctioned, well that's a pretty good deal. So when I talk about the settlement vault settlement is just merely the moment where everyone gets paid or the transaction is settled. And instead of having an IOU through currency, they would have the real deal real money within their borders. Now that doesn't mean that overnight the dollar suddenly collapses or that no one is using the dollar anymore. De-dollarization is a process, one that's unfolding right now, but every single chink in the armor every time it's being chipped away at means that the US debt continues to rack up. The interest continues to rack up. And more and more, we are catapulting towards a scenario where we are going to see serious inflation. Remember how we started this video talking about the US and how they had the most gold and therefore they were able to build a financial system with the dollar in the middle. Well China's taking an alternative route. They're

7:21saying today, hey we're going to put gold back in the center of the system because everyone can trust it. You don't necessarily have to trust the yuan, right? I mean maybe that's chapter two, but if you trust gold, which everyone does, then work with us, work with gold. That is a much more appealing proposition than working with a failing fiat currency. And it puts the United States on the back foot because we now have so much debt, so many dollars that are issued. But ultimately the only way out of this is really for the US to continue to print. And for any naysayers out there who are going to go, well, doesn't make any sense that the new modern monetary system is going to be linked to physical gold. It's antiquated, it's outdated, it moves too slow. Well guess what? These central banks are all buying physical gold and they're repatriating or bringing their gold home within their borders because they don't trust anyone else holding the actual asset. If your asset lives somewhere else overseas or you don't hold it, right? You don't

8:26hold it. You don't own it. And you don't have full control over that asset yourself. The same goes for everyone watching out there who's debating around physical gold versus paper gold, like a gold ETF, right? If it's still in the system, you still have an IOU. There's counter-party risks. So all of these nations today are essentially showing us, hey, we don't want the currency, we don't want to fake promise what we really want is something that we can trust. And we're willing to sacrifice maybe some speed or convenience in order to ensure that we can trust that our reserves and our monetary future are built on something that has real intrinsic value. So what does this mean for all of us? Well, ultimately China is not trying to destroy the dollar overnight. They're building a competing system, one that is gaining traction. And as I mentioned, every traction it gains, that is a chunk on the dollar shield. Now, the United States is already in a very precarious position with its debt burden. As this pressure continues to mount,

9:31the United States really won't be able to pay off the debt leaving only one option, the lender of last resort, which is of course the federal reserve, a big print is coming because by creating more units of currency, it devalues the existing one and makes the debt easier to manage. What many people don't realize is this actually is the plan for the United States. It's not an accident, it's not a last resort. It really is the plan all along, one that's been unfolding slowly and is now happening suddenly. So any asset that you have right now that is tied to the dollar or anything that's dollar denominated, annuities, stocks, bonds, savings, checking, you name it, they all are going to lose value. This is particularly important for anyone who's retired or thinking about retiring because we all know there isn't a second chance, right, to go earn more. If you have a number set in your head and that's the number that we're

10:33working towards or that's the number you're going to live off of, it becomes increasingly difficult if inflation hits 10%, 20%, 30%, 40%, and you might be thinking, well, that will never happen here in the United States. But the symptoms and the pattern of what we're seeing unfold today are exactly what we've seen happen to other nations who have gone through inflation, severe inflation, hyperinflation, and ultimately a currency reset. Now, how can you protect yourself? Well, the answer there lies with what we're seeing the world powers move towards. Central banks buying massive amounts of gold, China, creating a new system built around gold. As I said, they're looking for something that they can trust a true store of value. And as more pressure is put on the paper markets and things move to physical, you're going to wish that you had your physical gold, right, in hand before all of that happens because as that continues to happen, what do you think is going to happen to the price of gold, right? Some people today say gold is too expensive, expensive and

11:36cheap are relative terms, right? Gold is expensive today compared to five years ago, but it could be very, very cheap compared to where it's going next if you know what to look for. Now, for everyone out there watching who is understanding what I'm saying, nodding along and going, yes, yes, yes, yes, education is incredibly important. It's what we do. It's the foundation of what we do here, but it is action that will truly protect you. So if you personally are looking for a plan to protect your wealth from what's coming next, or you want a second opinion, there are no bad questions. Call us. We are here to help you can call us at the number below. You can click the link in the description and set up a time to talk to us. We've been helping people for 30 years here at ITM trading. We've protected billions and wealth for our clients. So it does not matter what your circumstances are, what your situation are, even if again, you just want to talk to someone and understand more. That's what we're here to do. So call us at the number below. Click the link in the description. And in the meantime, thank you so much for being here. I'm Taylor Kenney with

12:39ITM trading. Your trusted source for all things gold, silver, and lifelong wealth protection. Until next time.