Peter Schiff: Here’s Why China is Hoarding Gold and Silver
China is hoarding precious metals. And it might even be moving to a gold standard. Or at least, that’s the view of renowned investor Peter Schiff.
China’s stock market has crashed over the past few weeks and many investors are blaming the fall on regulators. But in an interview with Reason Magazine, Schiff points out that Chinese stocks are still trading higher year-to-date. Even worse, he argues, the recent plunge in the Chinese stock market was actually the result of economic problems from the United States.
“Like most of the products Americans buy are made in China, most of the economic problems the Chinese have are made in America” (Source: Is China Moving Toward a Gold Standard?, last accessed July 13, 2015.)
China has been following the same monetary policy as the U.S. and most European countries. Interest rates are very low in China which pushed people to the equity market.
“The Chinese have decided to peg their currency to the dollar and so they have imported our monetary policy,” he said. “They keep creating Yuan and they keep interest rates artificially low.”
When Schiff was asked about how China will change its current monetary policies, he said that the Chinese have been quietly increasing their ownership of gold. The Chinese have not acknowledged that they plan to increase their gold reserve in order to keep the gold prices down.
“I do believe that they do want to untether their currency from the dollar and they don’t want to just be back with nothing.”
He concluded by saying that if the Chinese would back their currency by gold, “They would have the only currency backed by gold on the planet, and it would be the most desirable and strongest currency.”
Also Read:
2015 Predictions: U.S. Dollar to Collapse?
Why the U.S. Dollar Is Rising So High; Dollar Collapse in the Works?
