Returning to a Gold Backed Monetary system



by Katherine Frisk:

Editor’s note: Katherine, then again, China’s economy just crashed.

If China sells off USTreasuries and buys back yuan what does it mean?

In recent years China and Russia have been increasing their gold holdings. In July the Peoples Bank of China declared their gold holdings as part of an agreement to join the IMF and for the yuan to be included in the SDR.

On the one hand many expressed surprise that their holdings were “so high,” on the other hand, those who have been watching the flood of gold move from west to east in the last four years are well aware that the figures given by the PBOC did not disclose all of China’s gold holdings but merely those holdings that needed to be declared for the purposes of joining the IMF.

Not only has China accumulated much more than the declared 53.3 million ounces, this figure does not represent gold holdings in other major Chinese banks or gold held in the hands of private individuals. In China you can go to an ATM machine and exchange your paper money for a chocolate bar size of gold. In other words, the average middle class Chinese family as in India, regards gold as an important and necessary part of their investment portfolio. The Chinese and the Indians do not hold much store in GLD certificates, the paper gold market, as they see this as valueless in real terms and subject to market manipulation, high frequency trading and gold price rigging.

Yet again China was turned down by the IMF and treated like a third class citizen of the world in spite of the fact that China is one of the world’s leading economies. In recent years China has joined the BRICS development bank and formed the AIIB for the purposes of creating investment banks that will service development in Russia, India, Africa and South America and the planned Silk Road Project, a project of massive proportions that will include the whole of Eurasia in trade and commerce with an arterial system of fast speed rail that will eventually connect Beijing and Lisbon.

The funding for this project which will last well through most of the 21st century and will eventually include the Middle East and connect to Africa through Cairo, will not come from debt based USTreasuries or the printing press of the dollar which has no tangible backing to it, but through currencies that are backed with real collateral, one of which is gold. A commodity as I have pointed out that is not only held in Chinese Banks but is regarded as an essential investment by Chinese and Indian citizens.

The problem comes in where most of the countries in the BRICS block and those who have joined the AIIB all hold huge quantities of USTreasury debt, it is debt no more and no less. In order to remove themselves from this printing press economy with no tangible backing to it, China and many other countries as we have seen recently, have devalued their currencies while the dollar has increased in value. At the same time they are selling off these basically worthless USTreasuries that are paper and debt and buying back their own currencies at a low rate using the current high value on the dollar to fund it. Sell high and buy low.

The yuan, unlike the dollar, is backed by gold, it has real value behind it. China is exchanging paper for gold backed certificates and many countries will follow suit. Instead of having US debt as reserves for international trade, they will covert to a tangible asset, not a printing press.

Zero Hedge had this to say :

“What happens when China liquidates all of its Treasury holdings is anyone’s guess,and an even better question is will anyone else decide to join China as its sells US Treasurys at a never before seen pace, and best of all: will the Fed just sit there and watch as the biggest offshore holder of US Treasurys liquidates its entire inventory…”

I think the answer to that question should be obvious by now. The dollar is no longer the international reserve currency and oil is no longer traded in the petro dollar. More and more countries are entering into trade agreements that exclude the dollar and either trade in their own currencies or in commodities exchange. In other words, a free market economy that is dictated to by supply and demand, currency backed by real collateral not debt, and where trade agreements are back to the bargaining table as opposed to the western corporate fascist system of set contracts and over pricing where competition is eliminated in the interests of the Vampire Squid.

In order to circumvent this move away from the dollar and towards a healthy and real economic system that is not based on fresh air and a printing press, the Vampire Squid has devised yet another corporate fascist system called the Trans Pacific Partnership Agreement and the Transatlantic Trade and Investment Partnership. These agreements are designed to lock in the Pacific rim , the European Union and North America and give the major corporations in the Vampire Squid the same power, in fact more power than governments in order to keep a hold on the corporate fascist monetary system that has served their best interests since the end of WW2 through the printing press of the dollar, and not in the interests of the general population.

The West is still referred to as a “capitalist” system which it is not. A capitalist system is where you have private enterprize and healthy competition, a free market economy where supply and demand dictates prices. Due to corporate buy outs in many western countries, any and all competition has been devoured by the Vampire Squid, Goldman Sachs, Wall Mart and Monsanto are three examples. This includes what once were regarded as state run institutions for the benefit of the people of the country that have progressively become privatized which results in higher prices, poorer service, and even less accountability. Nestle and the privatization of dams and rivers is one good example of crony corporate fascism.

The result has been the decline of a middle class fee market economy with mom and pop stores, small business enterprize and small scale farming. Due to their hegemonic control over the economy, prices have been set through trade agreements way above what normal supply and demand would dictate and as a result inflation has soared to their benefit while salaries have barely kept pace in the last 20 years, leading to the gradual development of a two tier society, the very rich 1% and the 99% living just above the bread line.

The 1% that controls this corporate fascist system has also devised many loopholes where they do not pay taxes. Taxes in western countries are now the burden of the 99% , hence the ever growing decline in public services, education, health care, security and transport. Whilst the 1% who have benefited the most financially off the backs of their collateral, (the working 99% per cent,) have walked away with huge profits that have not contributed towards the country or the societies in which they have been the parasite.

Most people in the west regard themselves as part of a “capitalist”society and look down on Russia and China as “communist”countries. Russia and China today are more capitalist than the west is, where free markets and supply and demand dictate price and opportunities are there for a strong, educated and self empowered middle class which will be boosted with the development of the Silk Road project.

The difference today between east and west, is that in the east, corporations and individuals pay taxes and the governments of China and Russia have and are closing loopholes in their systems. As a result taxes are used for the benefit of the population with high levels of education, health care, security and transport, and do not end up in a post box on some island in the middle of no where.

Should the TPP and the TTIP agreements be passed in the coming months, what we once thought we knew of as capitalist and democratic structures will become part of a forgotten system referred to in derogatory terms in our history books. Corporate Fascism is not Capitalism. Taxes used for the benefit of the country by all, is not Communism. I will leave you with this very enlightening talk. For those who live in “emerging markets,” what he has to say at approx 10 mins is very enlightening.



  1. The Trans Pacific Partnership Agreement (TPP), BRICS and the South African Connection.
  2. TPP, $3.5 Trillion Stolen, Gold Price Rigging, Colour Revolutions and hanging out with BRICS.


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  1. What is happening to the US of A’s gold? We have none in Ft. Knox. The 9/11 gold in storage was stolen. Where is it? I wonder if there isn’t a huge pile of it somewhere, guarded by Smaug the dragon. Just wondering, anyone?

  2. Commodity based currencies are a problem. The closing quote from Prime Minister William Lyon Mackenzie King at the end of the video has it correct….”Until the control of the issue of currency and credit is restored to government and recognized as its most sacred responsibility, all talk of sovereignty is idle and futile”…. One of the great failings of the US constitution was in the realm of monetary policy. There will be no individual nation state sovereignty until we have remedied this failure. Stephen Zarlenga who produced the greatest tome on monetary history and reform states, “Over time, whoever controls the money system controls the nation”. We should not dare to wait to return the monetary discussion back to it’s original moral roots per the gentleman in the video.

  3. This entire article does not mention the ace on the face China has over the rest of the World, rare-earth elements of which it holds 80% of the world’s known deposits, elements which are indispenable to the technological world, and which China isolates and processes them in traditional foundries all over the place. It took about a 100 years before the process of seperating these abundant elements could be perfected by Mr Science anyway in China they do it in their villages.

    This ace is hard to beat.

  4. from Armstrong Economics:
    Even during periods of extreme hyperinflation, ALL assets rise in value. So there is no possible way for the world to meltdown while ONLY gold rises. That is just insane and the people who argue that money is not tangible are really thieves because it is fiat. They are clueless because ALL money is fiat if it has a fixed value — even gold. Money is purely an agreement for there is NOTHING that exists that is “money” in the context that they preach. Money is merely a medium of exchange that you are willing to accept simply because others will accept it from you. It does not matter if it is gold, paper, or bricks of tea.

    China used bricks of pressed tea for money in 1949. This illustrates that any commodity can be used for a medium of exchange simply because it has a recognized use. In Japan, bags of rice were the medium of exchange for 600 years. Cattle has long been a monetary base in Africa, and it acted as the foundation of the Roman monetary system from the outset, so much so that their bricks of bronze pictured cattle to illustrate its value in exchange — bronze backed by cattle. Roughly, 5 pounds of bronze (Aes Signatum) was equal to one head of cattle. Bronze had tremendous utility value for it could be shaped into a tool for agriculture or into a sword for weapons.

    • True, a bartering system where even to this day in China garlic is more worth than gold as a traditional investment.

    • You’re right KSP: All money is fiat. Frisk posted one of Bill Still’s videos yet did not seem to notice he opposes the gold standard, and with good reason. The mythos behind gold is due to banksters usually owning and controlling all the gold.

      “… we can tell them this, that they will search the pages of history in vain to find a single instance in which the common people of any land ever declared themselves in favor of a gold standard. They can find where the holders of fixed investments have.”
      ~ Senator William Jennings Bryan, 1896

  5. Gold by itself holds no intrinsic financial value than, say more than water for instance. It does not make one wealthy, for, India being the country that has the most among its population and the country that truly sets the price of gold in the world, is itself as dirt poor as humbly can be. Gold as a metal has more valuable use in the electronic industry than in jewellery.

    • I’m sorry, but this a contradictory post on your part. First of all, money is a concept. It’s an idea. Secondly, of course gold has intrinsic financial value. it would only have no financial value if we didn’t have a monetary system to begin with. In fact I could argue, quite logically, that every damn thing on this earth has intrinsic financial value to someone somewhere. Nor does India set the price of gold. Gold markets are rigged and manipulated by the Illuminati. Especially now as they are desperate to stave off the inevitable crash of the petro dollar. And your post makes no sense because you start by saying it has no intrinsic financial value, but, you finish by saying it has much value in electronics. I shouldn’t have to point out to you the contradiction and the problem with those two statements. not meaning to attack you. Just trying to give a different perspective that you might have not thought of.

    • I agree with you wanderer but you forget that gold financial value is imposed on it by us, not by nature,
      reflecting our values or what we choose to value for we may as well agree to impose the same status as
      someone stated here a brick of tea.

      As to its technical and electronic value that value was dictated by nature according to its own precendence
      of its values for whatever use it uses gold for.

      “Gold as a metal has more valuable use in the electronic industry than in jewellery.”
      In the electronic industries the value of gold had been dictated by nature, ie nature has endowed gold with certain superior qualites and properties than other metals, properties that we hold as valuable for specific use. So far no coin value is involved.
      It is only when segments of society with similar value ideas, each according to his needs will place the said object in financial value, or regard an equivalent selection of other objects as being equivalent to his value precedence system.

      I do not know I make sense to your value system because as a person my value system places nature and simple things like water as being more valuable than gold, as a lump of stone.

      And thanks Wanderer maybe after all I need sometimes to translate my English into English !

  6. Any reader here better not think that the Islamic Banking is any better.
    The prevailing Islamic Banking is just another counter in the same fractional reserve banking system, not much different, just equally laughable.

  7. A gold-backed monetary system would be a good idea for a change, not neccessarily backed by gold but it can be backed by any anything of value. Least of all it can be backed by trust, a concept in short supply in the financial world. Currently our monetary system is backed by threats, threats of war, whereas the economic growth is predicated on war as an engine of growth. It is time mankind grows up otherwise its errornous economical models will be its undoing and its sundering.

    • When people speak of gold backed money, they are not just meaning gold, they mean all precious metals, gems etc. Eventually, when humanity is enlightened, we will move beyond the lower vibratory dimensions and will no longer need or use such a concept as the monetary system. I’ve been ready for this for years, but you start telling people they don’t need money, and, well, I’m sure you know how most people would react to that statement. But, it will become a reality someday.

    • You may misunderstand me Wanderer, I did not say people do not need money as we need at present time, I said we need a new approach, a new paradigm if you will, the old approach has its values ass-backwards,
      it does not comprehend the mix-ups of valuues precedence. It mixes up destructive and injurious economical practices as of being of more value than say constructive economical practices. That is why our generation is imperilled by wars and destructions simply because we value the wrong things. Money is just a means of exchange and even if you have it as in Zimbabwei you may find nothing to exchange it with and since money can not be eaten it has no value whatsover.

    • Talking of Zimbabwe, comrade President Mugabe decided to re-name it from Rhodesia as an acronym for
      Zero Income Mainly Because All Brainy Whites Emigrated, apt, and where inflation is so high the currency
      uses the persec astronomical unit to care for surplus zeros ! :\
      It is the only country with a trillion dollar note that can buy you even a stick of cigarrete, best
      tobbaco being grown in Bulawayo notwithstanding.

    • No. I know you didn’t say we don’t need money. I said that. And I mean it. We do not need money and the day will come when humanity is enlightened enough to leave it behind. That’s how it is in the higher vibratory dimensions. We’re still mucking around in our own crap and struggling to divest ourselves of the tyrannical ego’s hold. And by god, some of us are actually succeeding. Mankind, as you say, needs to transcend the ego and recall and recognize all is one. Many individuals have already achieved this… but the collective is reticent to join the family because most are still trapped in the illusion that is the ego. the separate self maybe an illusion, but it is a damn powerful one that many just seem unwilling to let go of. This is sad and really, that is the fundamental problem here in the lower vibratory levels. A profound sense of disconnection and an unwillingness to admit there is no separation. we are stubborn lot, eh?

  8. When The Constitution mandated the minting of coin to Congress it did not permit Congress
    tthe right to transfer the mandate to a third party, Fed you hear ?

    • ..and Congress as well. The gross financial mis-managements and outright fraud are coming home to roost with a vengeance.

    • Article I, Section 8: “The Congress shall have Power… To borrow money on the credit of the United States…”
      So no, this scam is technically constitutional. That’s why Jefferson wanted that power removed.

      “I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.”
      ~ President Thomas Jefferson, 1798

  9. “Platz der Opfer des Nationalsozialismus” should not stand alone anymore, we need desperately to bring in places and squares of the victims of capitalism. Regardless of what happens with China, Capitalism has itself with its oil shocks introduced much misery and victims into this world than any other regime. Capitalism is covert feudalism. We are residing in a regime, no matter how its supermen like to call it, democracy, self-supportive electorate body or whatever. Capitalism sine vultures is only possible within socialist progress of supportive governments, and those are less than 10 in this world. USA and Britain, Germany and France are miles away from capitalism. The only true capitalist societies are the likes of Scandinavia, Iceland, Switzerland and somewhat Japan. The rest are more like fascists. Irish, Canadian, and Aussies are just pale copies of their political idols USA and Britain. “And the rocket’s red glare, Bombs bursting in air, Let an impure blood water our furrows, Send her victorious” those are pure genocidal landmarks only not yet outlawed like Uber alles.

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