From GoldSeek
By Vin Maru
''There is
some speculation that China is increasing its gold holding to make the
yuan a gold-backed currency in an effort to make it a world currency
reserve. While it is an interesting concept, it will most likely never
happen. In order to back a currency, their gold holdings must increase
or decrease alongside the increase or decrease in the number of currency
units in the system. A gold backed currency would entail having a fixed
rate of convertibility for each ounce of gold to a specific number
currency units issued by that country. There is probably no country in
the world that will honour convertibility on a fixed basis, it would be
financial suicide and is part of the reason why Nixon closed the gold
window.''
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