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More
news media-monitoring cables from the U.S. Embassy in Beijing to the State
Department in Washington show that both China's government and the nation's
financial press, tightly controlled by the government, consider gold to be
the main weapon in a world currency war that is under way.
The
additional cables, published a few days ago by Wikileaks
and located by GATA's Irish friend R.M., disclose that China thinks that the
United States is trying to prevent China's foreign exchange surplus from
being converted into gold because the U.S. and its European allies plan a
return to a gold standard that will favor them because they hold most of the
world's gold reserves.
China
itself has acknowledged that it is rapidly building its own gold reserves to
facilitate international use of its currency, the renminbi.
The
citation of the gold-related commentaries by the U.S. embassy cables suggests
that China's acquisition of gold is of great concern to the U.S. government
as well.
One of the cables from the embassy in Beijing, dated
February 8, 2010, quotes commentary published that day in the China Business
News newspaper in Shanghai, as follows:
"This
time the quick change of the U.S. policy (toward China) has surprised quite a
few people. The U.S. has almost used all deterring means, besides military
means, against China. China must be clear on discovering what the U.S. goals
are behind its tough stances against China. In fact, a fierce competition
between the currencies of big countries has just started. A crucial move for
the U.S. is to shift its crisis to other countries -- by coercing China to
buy U.S. treasury bonds with foreign exchange reserves and doing everything
possible to prevent China's foreign reserve from buying gold. The nature of
such behavior is a rogue lawyer's behavior of 'ripping off both sides':
taking advantage of cross-strait divergences, blackmailing the Taiwan
people's wealth by selling arms to Taiwan, and meanwhile coercing China to
buy U.S. treasury bonds with foreign exchange reserves and extorting wealth
from the mainland's people. If we [China] use all of our foreign exchange
reserves to buy U.S. Treasury bonds, then when someday the U.S. Federal
Reserve suddenly announces that the original 10 old U.S. dollars are now
worth only one new U.S. dollar and the new U.S. dollar is pegged to the gold,
we will be dumbfounded. Today when the United States is determined to beggar
thy neighbor, shifting its crisis to China, the Chinese must be very clear
what the key to victory is. It is by no means to use new foreign exchange
reserves to buy U.S. Treasury bonds. The issues of Taiwan, Tibet, Xinjiang,
trade, and so on are all false tricks, while forcing China to buy U.S. bonds
is the U.S.'s real intention."
The
cable quoting the China Business News commentary can be found here:
http://cables.mrkva.eu/cable.php?id=247683
And
at GATA's Internet site here:
http://www.gata.org/files/USEmbassyBeijingCable-02-08-2010.txt
The
second gold-related cable, dated December 4, 2008, quotes commentary
published the previous day in the official Chinese Communist Party newspaper,
People's Daily, as follows:
"Be
vigilant when considering restoring the gold standard system.
"Recent
Western opinion has advocated a new Bretton Woods system with the U.S. dollar
as the core and restoration of the 'gold standard' to solve the financial
crisis. The appearance of such thought is not accidental. There is a great
deal of background. The American financial crisis has caused the loss of the
U.S. dollar's credit. Therefore, American financial strategists seek to use
the gold standard system to maintain the global financial system led by the
U.S. The reason that the U.S. and Europe choose to use gold standard is the
fact that the most of gold reservation in the world is in their control. The
restored gold standard system will not be the original gold standard system,
but instead a 'partial reserve system' partially based on gold. Therefore,
rapid economic growth will be relatively limited in the area of currency
supply. The possible consequences would be: first, due to the economic growth
of the U.S. and Europe is low, the partial reserve system can satisfy their
currency supply and will not form serious restriction on their economy, but
will greatly restrict China, India, and other developing countries. Second,
developing countries have to spend lots of foreign reserve to purchase gold.
This decision betrays the common wish of the international society to
substantially reform the international financial system."
The
December 4, 2008, cable can be found here:
http://cables.mrkva.eu/cable.php?id=181326
And
at GATA's Internet site here:
http://www.gata.org/files/USEmbassyBeijingCable-12-04-2008.txt
On
Saturday the Internet site Zero Hedge was first to call attention to a U.S.
Beijing embassy cable from 2009, published by Wikileaks,
showing that China's government has been aware of U.S. and European
government efforts to suppress the price of gold to support their own
currencies, and that the U.S. government knew that China knew:
http://www.gata.org/node/10381
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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