RE: Jaguar's valueBy Nipa Piboontanasawat and Janet Ong
Oct. 9 (Bloomberg) -- China's surplus on the current account, which measures exports and imports of goods and services, widened in the first half, the government said.
The gap swelled to $91.6 billion from $67.3 billion the same period last year, the Beijing-based State Administration of Foreign Exchange said today on its Web site. That puts the surplus on track to top last year's record $161 billion in 2006.
China's swelling surplus, powered by the nation's soaring exports, has pushed its foreign exchange reserves to almost $1 trillion, increasing pressure on the government to allow faster currency appreciation. It has also flooded the economy with cash, fueling an investment boom the government is trying to rein in.
https://www.bloomberg.com/apps/news?pid=20601089&sid=asjSX3.WJ6L0&refer=china
Imagine China's swelling surplus foreign exchange reserves is almost $1 trillion (and relentlessly growing), and nearly all of this is fiat money -- most of which is US dollar. To be sure monetary experts in the Sino nation have opined on the prudence of converting a material fraction of fiat foreign exchange reserves in to gold. This would be consistent with the Peoples Bank of China's need to revalue the Renminbi vis-a-vis the US dollar.
The upshot of the above monetary logic is the price of gold denominated in US dollars will inexorably rise going forward, as the Central Bank of China quietly accumulates gold, while diversifying out of its burgeonous hoard of American fiat paper. Conceivably, this prudent currency risk diversification by the People Bank of China will necessarily force the price of gold to $1000/oz.
https://www.pbc.gov.cn/