Interview With James Rickards: China Planning to Displace Dollar
Interview With James Rickards: China Planning to Displace Dollar
The author of the best-selling book 'Currency Wars' and the forthcoming 'The Death of Money' talks about how China uses gold and the IMF to remove the dollar as reserve currency

Epoch Times: Mr. Rickards, in our last interview (Part 1, Part 2), we talked about gold and why it should rally. You also said the Chinese are behind buying a lot of physical …
James Rickards: I met with the largest gold refinery in the world, the head of precious metals operations. He’s recently expanded his own capacity; they put a whole new area in their factory and it’s highly automated. And he’s working triple shifts, he is working 24 hours a day to produce gold.

He is producing 20 tons a week and half of that is going to China. So that’s 10 tons a week, which is about 500 tons a year. And that’s just one refinery, not counting all the others, that’s a lot of gold.

He said the Chinese want more, but he won’t supply it because he has regular customers. He supplies Rolex watches and other high net-worth individuals and institutions; these are all long standing customers. He can’t refuse to fill their orders.

He said: “I’m making all the gold I can, working 24 hours a day, sending as much gold as I possibly can to China, 500 tons a year and the Chinese still want more.”

Epoch Times: How can supply keep up?
Mr. Rickards: So where is the gold coming from? It’s coming from mining output, scrap, and 400 ounce bars. The Chinese are basically turning their back on the London gold market and creating a new standard. So the old standard was the 99 percent pure gold 400 ounce bar, the new standard is a 99.99 percent pure gold one kilogram bar.

So what the refineries are doing is they are taking 99 percent 400 ounce bars, and they are refining them to 99.99 percent kilo bars because that’s the only thing China wants.

You are taking 400 ounce bars, which weigh about 25 pounds or 10 kilos, and turning them into one kilo. Chinese like one kilo because there is a lot of consumer demand for that, and it’s a lot better for smuggling. There is a lot of capital flight coming out of China.

The Shanghai Gold Exchange is in the process of replacing London as the center of gold trading in the world, and I have already mentioned a couple of aspects of that [in my earlier interviews].

One is a lot of floating supply is moving there; two the Chinese have changed the standard from 400 ounce bars to one kilo bars, and they are facilitating the trading and building of very large vaults in Shanghai and they’ve got their own refineries. So taking all these trends together, it’s very clear that the center of gold trading is moving from London to Shanghai.

Epoch Times: What about the Chinese purchase of the JPMorgan gold vault in New York?
Mr. Rickards: I don’t put much stock in buying the JPMorgan vault, that was a real estate transaction. They’ve bought the whole Chase Manhattan skyscraper. There happens to be a vault in the basement. I can’t imagine they spend upward of a billion dollars on a building so they can get a vault. I am sure it was a real estate deal, and they wanted the building, but yeah, there is a vault.

Also, if you are Chinese, why would you want your gold in New York, you would want your gold in Shanghai. But what is going on in Shanghai is very significant. Suffice to say that China is the coming world gold power. In terms of the world monetary system, Shanghai is becoming the center of world gold trading as opposed to London and putting these two things together, you have to ask yourself why?

Epoch Times: Why?
Mr. Rickards: I think they see something most people don’t. The international monetary system based on paper currencies is fragile and likely to collapse, and when the system needs to be reformed, the people with the largest voice at the table will be the people with the most gold.

Epoch Times: Right, but even including this frantic buying, the Chinese have a lower percentage of their money supply reserved in gold than the United States.
Mr. Rickards: I agree with that, which tells me they will keep buying. I think they have acquired three or four thousand tons secretly, but I don’t think they are done.

  • takawalk

    If we loose reserve currency status, both parties will begin to understand that debt does matter.

    • Sven

      Well what this article suggests is that we WON’T lose reserve currency status but both parties WILL realize that debt matters one day. Soon.

  • LTE2

    China is making some good moves. They just have to work through their local government debt problem.

  • Jeff

    “Right, but even including this frantic buying, the Chinese have a lower percentage of their money supply reserved in gold than the United States”………That’s if you belive we have any gold left, which we don’t. Right now even Vietnam or Turkey (pick your country) has more gold than we do…….Ask Germany.

  • Greg Burton

    China has gotten into position of threatening to displace the dollar only because it was deliberately helped to such a position by the globalists, the bankers who destroyed the US middle-class via the toxic mortgage/LIBOR scams and the bailout, which only benefited the bankers (not Main Street) and the Chinese, the presumptive winner of the ecnomic war between the US and China.

    The Hegelian Dialectic, Strategy of tension, that elevated China’s economy vis a vis the imploding US standard of living is deliberate policy of the Satanic globalist elite.

    Some thoughts for your consideration:

    Since the 9/11 (inside job/Muslim boogie-man) America’s (Israel/city of London) foreign policy (AFRICOM) has been about disrupting and supplanting Chinese advances in trade through out Africa and the world.

    However, at the same time, the banking cartel (The Fed/City of London) sells billions of Treasury bills to China resulting in a huge unsustainable budget deficit, a result of the US military fighting to hold off Chinese advances.

    Meanwhile, US-based and other global transnational corporations are out-sourcing US jobs and manufacturing to China that, along with the banking/LIBOR fraud, and corporate bail-outs, have resulted in a US economic depression and cuts to the social safety net, destroying the American middle-class. The massive holding of US Treasury’s give China de facto control over US monetary policy, inflation, jobs, foreign debt, and even the US standard of living.

    Further, the US military is being slowly reduced, if not destroyed, in the central Asian “graveyard of empires”, and US veterans are being treated like garbage. while replacement parts used in the US military machines are being counterfeited in China. To make matters worse, in the wake of the contrived economic debacle, America is selling off its infrastructure, properties to China?

    Meanwhile, Japan, at the behest of the US, even though it is being devastated by Fukushima, is contesting China and North Korea, and could lead to a nuclear confrontation.

    So, after over 12 years of the eternal war-on-terror™, the 9/11 pretext to invade Afghanistan, to steal its resources and re-energize the drug trade, China is now being allowed to extract oil in Afghanistan and Iraq; and is poised to take away the supposed prize of central Asia?

    Finally, because of the deliberate financial policies of the Federal Reserve, increasing the money supply to the point where it creates hyperinflation, the War on Terror® subsidized by China buying Treasury bills, the dollar is being destroyed and the Yuan is becoming the de facto reserve currency of the world.

    Can someone tell me that this does not add up to a plan to destroy America? Destroy its economy and democratic institutions, and subordinate our country to a globalist totalitarian NWO? That the so-called “war on terror”, really the war against the growing global presence of China was never meant to be won, as was designed as a holding action to weaken America, destroy its democratic institutions, its economy, its people, to get it ready to subordinate it to a NWO run by the banking/drug cartel run by the City of London and its “gollum”, Israel?

  • h5mind

    I’m not so sure the Chinese have less gold than the US. The last time China went on a gold buying spree, they did much of it via shell companies and other clandestine means, and one day suddenly declared they had all this gold on hand. Also, when was the last time our gold reserves were physically audited and/or tested- 1960’s? Finally, the Federal Reserve (which is not Federal, and has no reserves) supposedly holds title to all our gold anyway. China has it’s share of issues, but the way things are going, the strength of their currency isn’t one of them.

  • Robert Govan

    Make sure all you gold people check out these two blogs they have the real gold story. and this

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