China and India rank one-two in global gold consumption, and through the first quarter of 2021, gold demand charted an impressive rebound in both countries.
China’s year-on-year gold consumption surged 93.9% as first-quarter demand rebounded to pre-pandemic levels. Meanwhile, official Indian gold imports hit the highest level in a decade in March.
There’s been some chatter in the financial media about the decline of the gold market. Gold is a relic of the past and crypto will replace it as the go-to safe haven and inflation hedge, according to some. But as host Mike Maharrey explains in this episode of the Friday Gold Wrap podcast, the demise of the gold market is greatly exaggerated. A lot of people still want gold. Mike also touches on the national debt in this episode. It’s even worse than most people think.
China has opened the door to billions of dollars in gold imports.
Reuters cites five sources indicating that Beijing has greenlighted the import of 150 tons of gold valued at around $8.5 billion at current prices. The report notes that China’s sudden appetite for gold could potentially “support global prices.”
China made a big splash when it rolled out its digital yuan and it got a boost when China’s biggest online retailer announced it has developed the first virtual platform to accept the Chinese digital currency. But China isn’t alone in exploring the possibility of digital money. Sweden has developed a digital currency of its own and the European Central Bank is pushing for a digital euro.
We’re told digital currency should replace unwieldy physical cash. It will be more convenient and help governments stop criminals. But there is a more sinister motive behind this government pivot toward digital currency.
Last summer, the Chinese government launched a pilot program for a digital version of the yuan. The virtual currency ups the ante in the war on cash and creates the potential for the government to track and even control consumer spending.
Last week, the digital yuan got a boost when China’s biggest online retailer announced it has developed the first virtual platform to accept the Chinese digital currency.
Global de-dollarization resumed in the second quarter according to data recently released by the International Monetary Fund (IMF).
While the dollar share of global reserves increased in the first quarter of 2020, it fell sharply in Q2, resuming a more than two-year trend downward.
Central bank gold-buying is expected to ramp up again in 2021 with Russia and China possibly entering back into the market.
Citigroup and HSBC Securities both expect an increase in central bank gold purchases next year after a drop-off in 2020.
The Chinese are threatening to dump US Treasuries even as the federal government borrows money at a torrid rate. If the Chinese were to follow through, it could wreak havoc on the bond market and send interest rates surging despite the Federal Reserve’s best efforts to hold them down.
Last month we reported that the Chinese government has launched a pilot program for a digital version of the yuan. The virtual currency ups the ante in the war on cash and creates the potential for the government to track and even control consumer spending.
China isn’t alone in using COVID-19 as an excuse to push people away from physical cash. Other countries are pushing narratives to drive the movement toward a completely digital economy – one where governments can track and even control what we buy. The war on cash has been going on for years, but the pandemic has put efforts on hyperdrive.
The economy has gone through the quickest and arguably the deepest collapse in history, but the stock market has been rallying. How can this be? In this episode of the Friday Gold Wrap podcast, host Mike Maharrey says look no further than the Federal Reserve. Despite the economic chaos, it has managed to blow up stock market bubble X.0 He also talks about a move China recently made that ups the ante in the “war on cash.”