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I'm Going Down, Down, Down...
The Australian dollar has hit a record low against gold recently. So has the Japanese Yen. Now, it's time for China's currency to face off against gold and yesterday I got word the Yuan or Renminbi as it is known within China, has hit a new record low (14,477.18 Yuan) against the yellow metal and it seems to be happening more and more frequently. Here's an article titled 'Shanghai Gold Sets Another Record As Yuan Hits 16 Year Low' published a little less than two months ago on September 8 at BullionVault.com. Almost exactly a year earlier, the BBC reported on the sinking Yuan when it hit a fresh low against the dollar back then.
Youth unemployment is so bad in China right now that the Chinese government isn't reporting on it anymore. Apparently, it's well over 20% and may be much higher. Other issues like debt and the real estate sector aren't helping. The one good thing the government is doing is buying up gold hand over fist, scooping up 26 tonnes in September alone which is remarkable as this is the tenth month in a row that China's central bank announces a gold purchase. They are otherwise well known for keeping things hush hush, going silent for years at a time.
The Chinese people are being encouraged by their government to invest in gold any way they can. They even have vending machines that spit out gold bars and coins. You'd be surprised to learn they've actually been around for quite some time already, as reported by the Globe And Mail on September 30, 2011.
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If the collapsing Chinese currency isn't enough to convince you that maybe it's time to convert some of your cash, whatever currency it is, in exchange for gold then maybe this little fact will. Looking at the Turkish Lira, having invested in gold 10 years ago would have proven a wise move. In just ten years, the price of gold has gone up an astonishing 24X against the Lira and it's not abating. Just in the last year, the price of gold has doubled!
While they shored up the Lira earlier this year by selling some of their gold holdings over a three month period (159 tonnes), Turkey's central bank bought back 11 tonnes in June as reported by Kitco News and stated their official reserve total at 428 tonnes. At least they used gold to prop up their Lira, instead of just printing more money.
Is it going to get worse? I've mentioned in previous posts about rising sovereign debt, rising interest rates and its associated costs that I feel like I'm beginning to sound like a broken record but I'm saying it again anyways. The ever increasing national debt in my home country, Canada recently surpassed $1.2T CDN. It is now rising by almost $110M per day! As for the Bank of Canada's gold reserves? It doesn't have any!
You can't Change A 5,000 Year Track Record!
The writing's on the wall but far too many can't read. For those of us that can, it's clear that protecting your assets by diversifying some of that wealth into precious metals is a must at this point. The last 52 years have been an experiment in the use of fiat currencies worldwide. For the previous 5,000 years before that, it was gold and silver all the way, baby! Fiat currencies came and went by the hundreds but gold remained.
Judging by the fury of the pace in which central banks around the world are buying and adding gold to their reserves to the tune of 337 tonnes in the last quarter ending September 30th and on track for a record year, it begs the question, 'What do they know that we don't?'. Yet, some of us do know. The current system is dying. What comes next though is anyone's guess.
Will Bitcoin and / or other cryptos save the day? Will it be tokenized gold, as just announced by HSBC? Some kind of bartering system? A combination of all the above? It leaves one wondering what the possibilities are. One thing for certain, big changes are coming and it's best to prepare now. Being one second too late won't cut it.
Stay safe and warm this winter. Prepare. Protect your family.
Peace and love to everyone!
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