Sell US Debts, Buy Gold: 1,000 Tons Arrive

It can be said that China is timid on the periphery of American interests, but it is aggressively attacking the core interests of the United States.

It was thought that the sharp drop in gold prices, along with the visits of Yellen and Blinken to China, could win back China's heart to continue purchasing U.S. debt.

However, contrary to expectations, China not only did not buy U.S. debt but also increased its holdings of gold significantly, and has been doing so for 18 consecutive months.

Even overseas media have indicated that China is becoming the forefront and center of the record-breaking rise in gold prices.

Is a new round of financial competition between China and the U.S. about to begin?

While China is increasing its gold holdings, the U.S. is again taking action against China, is it trying to intensify its plundering of China?

Increasing gold and reducing U.S. debt and dollars used to be a benefit for the U.S., but it is a tool for plundering global wealth.

And U.S. debt, as the underlying asset of the dollar, is even less popular.

Recently, China has accelerated its abandonment of U.S. debt and embraced gold, with an 18-month increase that has amazed the world.

China is opening up a new world situation.

Recently, our country's foreign exchange administration has disclosed relevant information showing that gold is still our first choice, and we have increased our holdings of gold for 18 consecutive months, with a cumulative increase of 10.16 million ounces, and the total holding size has reached 72.8 million ounces.

It should be noted that in the past, our gold reserves have always been maintained at around 60 million ounces.

Because everyone knows that after the collapse of the Bretton Woods system, gold has been more of a reserve asset, and its monetary attribute has been greatly reduced.

Moreover, there is a seesaw situation between gold and the dollar, and there was a time when buying gold was not as stable as buying U.S. debt.

However, with China's vigorous increase, this situation in the past is being broken.

Some may say that only holding 72.8 million ounces of gold, which is only more than 2,000 tons, is far less than the U.S.'s more than 8,000 tons and Germany's more than 4,000 tons.

If we compare horizontally, it is true, but we cannot ignore one point, which is that this is only the scale of central bank purchases, and how large is the scale in the private sector?

In the past year of 2023, the national gold consumption reached about 1,089 tons, and if we use the data released by the World Gold Council, it shows that China's consumption of gold jewelry last year reached 282 billion tons.

And in 2024, the enthusiasm for gold has not only not decreased but has greatly increased.

In the first quarter of the year, China's demand for gold bars and coins reached 110 tons, which is a year-on-year increase of 68%.

It can be said that China is quickly embracing gold.

While China is embracing gold, Yellen is very unhappy.

Because China is using dollars to buy gold, who will buy U.S. debt?

It should be noted that while our gold has increased for 18 consecutive months, our holdings of U.S. debt have also greatly decreased, from a scale of 1,000 billion U.S. dollars to less than 800 billion U.S. dollars now.

This increase and decrease are enough to show that we are accelerating our distance from American assets.

In the past, we earned foreign exchange by exporting and bought U.S. debt to continue the life of the United States.

The United States exported high-tech to China, although life was difficult, but it was still possible, but now, the United States neither exports high-tech nor wants China to continue buying U.S. debt to continue the life of the United States.

How can there be such a good thing in the world?

Moreover, can the United States really repay the debt now?

The current scale of U.S. debt is 34.5 trillion U.S. dollars, and it is also growing rapidly.

And at the same time as the growth of U.S. debt, the interest on U.S. debt is also growing rapidly.

According to institutional forecasts, if the United States does not cut interest rates this year, the scale of U.S. debt repayment will reach about 1.6 trillion U.S. dollars.

And this is the result of the United States shrinking its balance sheet.

Recently, the United States has also stated that it will reduce the speed of its balance sheet reduction, which means that the United States can't afford to tighten its belt anymore and has started to loosen up.

The next step will be to expand the balance sheet and directly helicopter money.

And the result of this will inevitably be a significant decline in the purchasing power of the dollar.

What you see is the interest on U.S. debt, but others see your principal.

Maybe the interest on U.S. debt can't even make up for the pressure of the depreciation of the dollar.

So for us, it's better to exchange it into physical assets earlier rather than watching the dollars in our hands turn into waste paper.

Moreover, no one knows if the United States will default or directly go down, after all, Yellen has already started, and 20 Chinese companies have been put on the blacklist.

No one knows what the next step will be.

The essence behind the final game between China and the United States in technology, trade, and military is all for interests.

In this game of interests, financial competition is the most important.

And when China is accelerating the purchase of gold, the United States has taken action again.

We can all see that the United States' cards are getting fewer and fewer, and the strength of the United States is basically running out.

In the present of the old and the new, the only thing the United States can rely on is the hegemony of the dollar.

Because in the past, the way the United States has always solved problems is one way, that is, to raise interest rates and harvest, and to lower interest rates and give money.

And now, this road is being blocked by China.

Because the past costs have been borne by developing countries such as China.

And today, the Chinese people want to live a good life and must get rid of the exploitation of the dollar.

After all, the United States used to exploit with a small knife, and now the United States has changed to a combine harvester, who can stand it.

Coupled with the huge scale of U.S. debt, no one can take it!

So it's better to face the reality and choose to cut off earlier than to conspire with the United States.

Now we can see that although the Federal Reserve is very tough on the surface, the United States will not choose to cut interest rates in the near future, but we must know that the bottom line of the United States is very flexible.

After all, no one thought that the United States would suddenly reduce the scale of its balance sheet reduction!

And according to the experience of 2019, the United States reduced the scale of its balance sheet reduction in less than half a year, and the United States ran out of money, and the Federal Reserve quickly entered the channel of cutting interest rates again.

And recently, we can all see that a large amount of capital from the north has entered the Chinese market, and the Hang Seng Index of Hong Kong stocks has also ushered in a nearly 13% increase.

Compared with Japan's Nikkei Index, it can be said that the Chinese market is being sought after by overseas capital.

And all of this is to illustrate that the United States' front line has already burned to the foot.

After all, the sense of smell of capital is always very sensitive.

Even Musk and Buffett have expressed their concerns about U.S. debt and do not look good at the U.S. market.

One is crazy to hoard cash, and the other is crazy to increase positions in the Chinese market.

It can be said that the game between China and the United States has come to the final stage, that is, the stage of the big escape.

And the time left for us is not much, that is, to quickly convert dollar assets into physical assets.

After all, no one knows how large the scale of the United States' expansion will be next.

It is important to know that now the U.S. interest rate is between 5% and 5.5%, and the U.S. dollar index is only about 105.

What will it be when the U.S. interest rate is reduced to 0 or negative interest rates in the future?

In the past, the more dollars held, the safer it was, but in the future, it may be just the opposite, the more dollars held, the more dangerous it is.

So we need to accelerate the expansion of our financial moat, and at the same time, we need to prepare for the interest rate cuts in the United States.

After all, the foreign exchange reserves of more than 3 trillion U.S. dollars are earned by the Chinese people with sweat, and it is very uneconomical to be diluted by the United States.