RE: Chinese to back Yuan with gold? Interesting article. But i don't agree with the interpretation, that the Chinese want a gold backed Yuan while everyone is devaluing their currency. This would make the Yuan explode and make production in China non competitive. The Chinese must also devalue their currency.
BUT: they are using the time, to accumulate as much gold as possible without shooting gold to the moon. Chinese have patience and can wait until the corpse of the enemy is passing by in the river...
The Chinese are preparing for the results of the currency devaluation and for a potential restart of the international monetary system. Depending how the credit paper crisis is developing, but if history is a model, then the toal loss of trust in all fiat currencies with a bond collapse is not impossible. And to restore trust, a new monetary system would need some kind of hard assets, where gold would definately play a role. THEN the nations, that have enough gold, will be able to determine the rules of the game. And that's why teh Chinese are increasing their gold reserves.
The other very interesting point in this article is the Pacific Hedge fund. I don't think it's that important, if a hedge fund is moving into gold. This has been done before, e.g. by Paulson. What i find so interesting, is that it is stated, that this fund is not buying paper gold in form of GLD, but bullion! What does that tell you? Me does it tell, that this fund is preferring the costs and the problems with the physical over the very convenient electronic transaction. I think this is a big news. Because it shows me, that at least this hedge fund do not have trust into the paper gold system.
First Iraq, Libyia, Venezuela, then Germany, and now a hedge fund wants his hands on the physical. If this would be the early beginning of a trend, imagine what it psychologically would mean, if Paulson or Soros would begin to dump their GLD paper gold holdings and demand pohysical delivery.
KWN is not always reliable and always pumping PMs, but if this article is correct, IMO this is important news.