China's Gold Reserves May Back the Yuan
SHANGHAI (Dow Jones)--China's gold reserves may serve as backing for the yuan as Beijing promotes its use overseas, said Zheng Lianghao, managing director of the World Gold Council's Far East division, the Shanghai Securities News reported Monday.
Zheng, who was speaking at a forum over the weekend, said increasing gold holdings would provide China with a useful hedge as the dollar faced the possibility of depreciation, according to the report.
In late April, the official Xinhua News Agency quoted Hu Xiaolian, the head of China's foreign exchange agency, as saying China's gold reserves had risen 454 metric tons since 2003 to 1,054 tons.
--Bruce: This is huge news and if they follow through, we may see an overnight collapse of the US Dollar. Prices would spike and the US would probably feel compelled to open up the printing presses full power (word of caution to trees in the vacinity).
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