HAS Reddit Mentions | ChartExchange

The entire point of an asset backed currency is to peg the value to something physical, and thereby control inflation and deflation.
I.e. $1 (or yuan) = 1 Troy ounce of gold.
If, as you say, it is a fractional system…. That in and of itself gets rid of the entire point of asset backed currency. If the ruling body can simply say “okay….from now on $1 is only worth “0.5 Troy ounce of gold” it is ESSENTIALLY the exact same thing as printing money. Except of printing money to devalue the currency you are directly cutting the value of a currency.
If we take your argument to full development, what would that mean for China? Well, China over the past few decades has become the manufacturing hub of the world. In order for that to remain the case, it would have to be economically valuable for companies to buy this currency to purchase from them. If, overnight…or even over the course of a few years, China requires the use of this currency for trade, one of two things HAS to happen:
1. The value of the currency increases….because the country can’t print money like they used to without acquiring more gold. And as the currency strengthens it because less economically viable to buy Chinese exports OR…
2. The currency must be devalued in order to keep Chinese exports affordable.
Either way…it is not viable for China. And they are a LONG way from being able to do that.
Second point….china isn’t becoming a global super power. It already is and already has been for many years.
Third point: Regarding the monetary issue. China’s entire strategy is to corner the markets with cheap supplies of high tech goods (solar panels, EVs). How do they do it? The government subsidizes those industries HEAVILY in order to keep costs down and flood the market with cheaper products thereby crushing international competition.
They can ONLY do this through printing money and controlling the value of their currency. They artificially keep their currency weak in order to keep export costs low.
Lastly….. have you looked at China’s debt? Everyone talks about US Debt Crisis…. But if you look at US Debt compared to the rest of the world, especially China…we aren’t the worst of that group.
As reported, China’s Debt to GDP ratio is over 300%…. And that is only what is REPORTED. CCP has actually had actually stopped reporting on a lot of categories of that debt while their economy has been slowing.
The ONLY way for China to get out of the issue is to either DRASTICALLY tax their companies, default on their debt, or grow their economy at like 15% a year for many years.
The growth story ain’t gonna be it bud.
You can ignore the facts all you want. You can refuse to educate yourself on the actual impacts of using a gold standard and how that coupled with an authoritarian government that, amazingly, has significantly less credibility and trustworthiness as the US… but what you’re talking about is a pipe dream in any near or medium term scenario.

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