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Thursday, March 10, 2016
Willem Middelkoop Interview in Epoch Times - Chinese Gold Strategy
Dutch author Willem Middelkoop (The Big Reset) is known as an expert on China with many contacts inside that country. In this new interview in Epoch Times, he explains in detail what he thinks the Chinese strategy is for gold for the future. Below are some selected Q&A's from the interview.
Gold expert Willem Middelkoop explains how much gold China really controls and what it intends to do with it
Epoch Times: How does China view gold?
Willem Middelkoop: The most important thing to understand about China’s gold strategy is that they see gold as a hedge against the financial system and the reserve holdings they have right now.
They still have $3.2 trillion in reserves and they understand the current dollar system is in its end-game. And they have been very vocal in their wish to hedge their dollar positions with gold.
Most of these statements never made it into the Western hemisphere, but if you look at all the articles in China, they say they want to achieve “the highest gold reserve in the shortest possible time.”
They had quite a bit of gold in the 1920s and 1930s but most was taken away by the Japanese, after the invasion a few years before World War II.
After the war, the Kuomintang fled to Taiwan with the rest and China’s vaults were empty until the 1990s. They have a very strong wish to grow their gold reserves now.
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Epoch Times: What is China’s end game?
Mr. Middelkoop: I think they have a longer term plan in which gold plays a more prominent role.
They are planning for the next phase of the financial system where gold plays are a more dominant part of the system. I think the Chinese think gold prices will go much higher.
I think the Chinese are working on a plan, this is a theory worked out by James Rickards. He said there is a mutual understanding within the International Monetary Fund that when the United States, the European Union and China have the same gold holdings compared to the size of their economy, they could pool those holdings of around 30,000 tons to make the Special Drawing Rights reserve basket (SDR) gold-linked.
We know the Chinese have asked the Chatham House in London to write a report about the next phase of the monetary system. Gold was added to this study about the next phase for the monetary system, on request of the Chinese.
It’s clear that the Chinese wish to add gold to the International Monetary System, so we could end up using a gold-linked SDR in the future.
I think the Chinese have an agreement with the United States and the IMF that some of the Chinese gold holdings will stay in the United States, so it is stored in a vault which is owned by the Chinese. This is the former JP Morgan building, which is situated across the street, where the New York Fed building holds the largest gold reserves outside Fort Knox.
The Chinese seem to be happy to store part of their gold abroad, but then they want to own the vault.