Are China and Russia planning a gold-backed reserve currency?
A prominent financial analyst believes that China is in the “final stages” of creating a new currency, which could be backed by gold in a partnership with Russia.
Francis Hunt, a trade veteran with decades of experience in the markets, thinks the new currency would likely be digital.
“It will come as no shock to me to see China become the first major country to launch a central bank digital currency,” Hunt told Asia Markets.
“And it will be a declaration of financial war on the US dollar.”
Hunt thinks the creation of the new digital currency would serve two purposes for China.
The first would be to challenge the US dollar as the world’s reserve currency.
The second would be to create a way to monitor and control its citizens.
“China has led the way with biometric facial recognition and social scoring,” Hunt said.
âCentral bank digital currency would allow them to monitor and control every transaction they make.â
A citizen’s “last resort”
Hunt has a bold and controversial view that the US dollar will soar as the world heads into an economic depression and Chinese citizens will feel they have no choice but to embrace a new system.
“The surge in the US dollar will be validation and justification for them to say ‘we need ours,'” Hunt said.
âThen you will have these two systems competing for a while and I think the dollar will already come down from its dizzying heights.
âPeople will check what these central bank digital currencies are, and then everyone will have to take the plunge.â
Backed by gold?
More than six months ago, Asia Markets uncovered evidence for the first time that China and Russia are buying huge amounts of gold.
Many observers, including Hunt, believe the storage could be preparation for the launch of a gold-backed digital currency.
“(To) get people to have faith in a new system…you’re going to resort to something that’s timeless (and) physical,” he said.
âChina has already stacked (the gold) as America has opened the rebate window for the Asians to move it.â
Hunt thinks that money could actually be created in partnership between the BRIC countries from Brazil, Russia, India and South Africa.
âSo Russia or China or a communeâ¦ There might be certain aspects that might be interchangeable,â he said.
“How much they keep nation states, and how much they might make a BRIC of them, we don’t know.”
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