The crucial issue here is not the prominence of one currency or another, but that this prominence was engineered to speed up the renunciation of the gold standard, and greatly enlarge the freedom of all central banks to inflate money supplies.
We talk about fear and wealth in gold and you have the fear factor- you look at economic uncertainty in China, in the U.S. right now, it’s off the chart.
Stock markets appear to have stabilized after a “December to remember.” But in his most recent podcast, Peter Schiff said we’re really just in the eye of a financial hurricane. The selloff began after the September Fed rate hike. At the time, Peter called it the hike that broke the camel’s back.
Using the dollar gold price, as most of us do, has disguised what is actually quite a powerful bull market. If my memory serves me right, we saw the same phenomenon – a stealth rally in minor currencies – ahead of the last major gold bull run (in dollars) in the late 1990’s.
In open market operations, the People’s Bank of China (PBOC) injected 350 billion yuan through seven-day reverse bond repurchase agreements and 220 billion yuan through 28-day reverse repos.