PDAC: Is China Buying Gold to Eliminate US Dollar as World Reserve Currency?

“If you think it’s all about money, if you think it’s all about gold — you’re right. But in the world that we live in today, it’s all about China,” Canadian financier Ned Goodman told a room full of investors during Monday’s keynote speech at the 2014 PDAC conference.

China, as Goodman highlights, has been aggressively buying physical gold in recent years. And while some market watchers speculate that the Asian country’s end goal is to make the yuan a reserve currency, Goodman sees it differently. China’s end goal, according to Goodman, is to “eliminate the United States dollar as the reserve currency.”

To support his claim, Goodman points to China’s ties with Russia, and more specifically, Russian President Vladmir Putin.

“Mr. Putin is not a best friend of the United States,” Goodman said. “He would be in favor of eliminating [the US dollar] as that reserve currency.”

Over the course of the last year, demand for gold bars and jewelry has climbed a record 32 percent, with China surpassing India as the top consumer of gold. Goodman speculates that should China be successful in eliminating the US dollar as a world reserve currency, the impact would be tremendous.

“It just means that the United States is possibly in bankruptcy,” said the chairman of Dundee.

Even so, on the whole, Goodman sees China’s increasing activity in the gold market as a possible boon for the resource sector. While he admits to being generally bearish on the stock market, Goodman is a well-known gold bug and it is no surprise that he remains bullish on the metal.

“I’m very bullish on gold and anything that has an inflationary impact,” he said.

“What we need to get around the problems that we have with raising money is a buoyant stock market. Which I think we are going to get in the resource sector,” Goodman explained. “And we need the ability to get to market easier, which has been made very difficult by regulatory bodies and the Venture exchange.”

“The fact is, if we can return to a classical gold standard and get rid of the Federal Reserve being where we are, we will have a good time in the commodity markets.”

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