In a recent interview on the Capital Cosm YouTube channel, precious metals expert Andy Schectman shared his insights on the global economic and geopolitical landscape. He raised concerns about the transparency of China's gold holdings, suggesting that the country likely possesses significantly more gold than officially reported.
"Everyone would always say you can't believe the numbers that China is is putting out because their number stayed at 1,200 or so metric tons forever, never got updated," Schectman stated. He further emphasized that China is not only the world's largest gold producer but also the largest importer, acquiring significant amounts of gold from miners worldwide.
Schectman also highlighted China's strategic acquisition of gold through less transparent channels, such as purchasing unrefined gold bars and concentrates directly from miners, effectively bypassing traditional market channels. This practice, he argued, makes it difficult to accurately assess China's true gold reserves.
"They're draining the world's exchanges every way they can," Schectman warned. "Their numbers are way higher than we are led to believe." He cited estimates from analysts like Alistair Macleod, who suggested that China's gold reserves could be as high as 38,000 metric tons, significantly exceeding the officially reported figures.
Schectman connected China's potential gold dominance to the evolving global monetary system. He noted that the Bank for International Settlements (BIS) recently reclassified gold as the only other tier-one reserve asset alongside foreign exchange. This move, he believes, signals a growing recognition of gold's importance in the global financial system.
"The BIS would not have reclassified gold as the only other tier-one Reserve asset if wasn't for a reason," Schectman explained. "They don't do things for shits and giggles." He further argued that the emergence of BRICS and its potential for a gold-backed settlement currency could further solidify gold's role in the international monetary system.
While acknowledging the potential for Bitcoin to play a role in the future, Schectman emphasized the inherent volatility of cryptocurrencies. He argued that a stable monetary system requires a more stable asset like gold.
"You cannot have something that is that volatile pegged to a monetary system," he said. "It doesn't work. You cannot it has to be stable and that's what gold represents is more stability."
Schectman concluded by emphasizing the importance of owning physical gold and silver as a hedge against economic uncertainty, inflation, and geopolitical instability. He believes that the current geopolitical and economic landscape favors precious metals and that investors should consider increasing their exposure to these assets.
Watch the full interview:
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