Is the Gold Standard the Future of China's Economic Policy?


Originally published July 10, 2015. Original text below:

"Just like most of the products Americans buy are made in China, most of the economic problems the Chinese have are made in America," says investment guru and radio host Peter Schiff, CEO of Euro Pacific Capital. "The Chinese have decided to peg their currency to the dollar and so they have imported our monetary policy."

But as Schiff explained to Reason's Matt Welch, that may be changing. China's recent market woes may force China to change its monetary policy and Schiff believes the Chinese government is laying the groundwork to back its currency by gold.

"Quietly they have been increasing thier ownership of gold," says Schiff. "They want to untether their currency from the dollar but they don't want it to be backed by nothing."

Approximately 3 minutes.

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  1. It doesn’t matter how much gold you have.

    What matters is selecting a peg value and keeping your currency’s value close to it. Say 200-300 basis points at most.

    If you fuck around with the peg to try to gain some advantage over your neighbors through monetary fuckery you end up in the same situation we’re in now.

    It’s not the gold, it’s the discipline of the political top men. So we’ll see.

    1. Exactly and I think that’s what Greenspan had tried to do during his time. Maintaining that discipline is definitely problematic.

  2. A rich vein of derp to mine for anyone who is brave enough:

  3. Texas is establishing a gold-backed bank or so I’ve heard.

    1. A depository, not a bank.

      HB 3505 – but I believe it died in committee.

      1. It died-in 2013. It came back and it passed. I brought it up in the PM links and the conversation…digressed.…..itcoin.htm

        It will function as something of a bank. You can write cheques from your stash of gold there. I imagine there are some interesting discussions happening in DC right now.

        1. You fool, it’s spelled “checks”.

          1. They shoot people in Texas for that.

            1. Or as C-Tox would spell it, Teques.

  4. I was driving home from Balmer while ago and I saw this green Subaru with several bumper stickers, only had time to read 3 and they were:

    I ? Yorkies

    I ? BBWs

    So I’m trying to figure out what this tells me about the driver. Anyone want to take a go at it?

    1. Well, I’d have said it was John’s car, but I don’t think he loves Yorkies…..

      1. Damn you, nimble-fingered mammal

        1. Don’t you have a warm rock to go lay on?

    2. Um, that’s John

    3. This person has very nervous, but agile, little dogs?

  5. So, here begins Mr. Lee’s Greater Hong Kong Kongbucks?

  6. The only problem for anyone is the gov’t and central banks having any control of money.

    Central bank defenders are ridiculous. They believe a certain amount of inflation is good. Even Milton fried mans idea of having a computer control inflation was bogus. So what some are saying, is if I rob a % of what they own per year that is ok?

    The dollar compared to precious metals is an indicator of how much they’ve robbed from individuals. Each dollar based on the silver content of four 1964 quarters and prior ones is equal to around $11.47 for each dollar.

    A salary of just $45,000 would result in a purchasing power equivalent to $516,150 based on the silver content of the quarters. Central banking, and legal tender laws are an abject failure.

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