Do they think we are stupid, or do US officials really mean what they say?
It’s really getting hard to tell whether they think we are just plain stupid…
… whether they are just so stupid that they believe what they say.
You be the judge.
Here is some of the background. China is the world’s largest gold producer. It is also the world’s largest gold refiner. In addition to aggressively adding to its official central bank gold reserves, China is reported to have substantial additional reserves off the books, held in the name of the army, the communist party, and other institutions.
Now China has created a new cyber yuan, a government digital currency. This is a major step toward independence from the US-controlled SWIFT global trade settlement system and away from the dollar’s global currency privilege. As Bloomberg News writes, “The dollar’s current dominance in cross-border transactions gives the US Treasury the power to cut off much of a business or even a country’s access to the global financial system.”
The entire world has been chafing under US use of this leverage as a tool for imposing costly compliance with American foreign policy positions and sanctions. A low-grade revolt is underway far and wide. But the US does not seem to notice. According to the Bloomberg story, “US officials are reassured that China’s intentions aren’t to use the digital yuan to evade American sanctions, according to people familiar with the matter.”
Oh, really? US official are “reassured”? When China’s every move, from its gold policies, to its raft of bilateral and multilateral trade agreements that end-run the dollar, to this new digital yuan?
Yet US officials are reassured that China is not aiming at evading American sanctions?
They whistle past the graveyard and want us to join in? Do think we are stupid?
Or are they too dumb to understand what is going on?
You be the judge.
For what it is worth, financial historian Naill Ferguson has concluded they just don’t get it. He writes, “American monetary authorities [are] underestimating the threat posed to dollar dominance by China’s pioneering combination of digital currency and electronic payments.”
Whatever your verdict, when the dollar’s future is in hands like this, it is better to own gold and silver.