Chapter 50 3. Gold is pegged to the U.S. dollar

Since the discovery of gold by humans 4,000 years ago, a total of 171,000 tons of gold have been produced.Gold is pursued by the world for its stable, precious, rare and mysterious colors.However, after the sharp rise in gold prices in the 1970s, international gold fell into a 20-year bear market, and the view that "gold is useless" spread globally.Many people believe that gold has lost its currency function, its history has passed, and the existence meaning of gold is only a kind of metal.To this day, the financial crisis triggered by the subprime mortgage crisis has caused a crisis of confidence in the US dollar, and people have discovered that the so-called "gold is useless" contains too many lies.So, in Professor Lang Xianping's view, what kind of secret is behind the "gold is useless theory" that some people wantonly fooled?

●Manipulate the price of gold by advocating that gold is not a currency through the theory of "gold is useless". ●Americans don't have to do anything, just lie at home. ●He can buy things as long as he prints dollars. ●Give you dollars, and you all give me gold from the whole world. Many of our classmates are working in hedge funds. Of course they are smarter than us. I am so stupid that I can only be a professor.The so-called hedge fund is a special fund that buys and sells at the same time, that is, to hedge the risk.For example, Japan has the Nikkei index, and Singapore also has the Nikkei index, and the two indexes are exactly the same.However, the price is sometimes slightly different. For example, one index in Japan is 102 yuan, and one index in Singapore is 101 yuan. Then you can earn 102 yuan by selling one Japanese index, and you can earn 102 yuan by buying one Singapore index at the same time. Pay 101 yuan, the two are hedged, so that you can earn 1 yuan without paying money, a very small price difference, this is a hedge fund.The purpose of a hedge fund is to buy and sell an item at the same time, and then earn a price difference. It is very complicated, and I won’t explain it too much.

I noticed that at this moment, when everyone spread the theory of "gold is useless", a large number of funds began to buy gold.The result of buying is that the buyer made a lot of money, making the price of gold jump from $250 per ounce to the current $800-900 per ounce. Who made it?International financial speculators made a lot of money.So at that time they manipulated the price of gold through the "gold is useless theory" and advocated that gold is not a currency.Why is gold so valuable at this moment?This is worth our reflection. In July 1944, the United Nations Monetary and Financial Conference was held in Bretton Woods, New Hampshire, USA. 168 representatives from 44 countries held consultations and confrontations around the new world financial order proposed by British economist Keynes and others.The final compromise of this meeting, on the one hand, established the status of the US dollar as the main international reserve currency, and on the other hand, established a fixed exchange rate mechanism. The fate of gold unfolded the most dramatic scene.So, what was the result of this scene?

I collected some information at this moment, because we never learned about gold when we were in school. We thought that gold can only be used to make rings, Olympic gold medals, and nothing else.At that time, I found a very interesting phenomenon. In fact, when I think about it now, it was all manipulated by international financial speculators.After the Second World War, the United States became the superpower in the world, so in order to maintain the stability of the world after the war, everyone held a meeting in a beautiful place called Bretton Woods, which was called the Bretton Woods Conference .What are they meeting for?This meeting truly determined the international status of the dollar.In other words, everyone will use US dollars in the future. If you want to sell something to other countries, you have to use US dollars to trade. No other currencies are allowed, only US dollars.

Why did the United States do this?It has benefits, that is to say, Americans don't do anything, just lie at home.He can buy things as long as he prints U.S. dollars, he only needs to open a factory for printing money, and as long as he keeps printing, he can buy all the things in the world, so Americans are the luckiest, they can be lazy, as long as they print money OK.This was the most important conclusion of the Bretton Woods conference at that time, which made Americans feel free to eat and be lazy. They can buy all the products in the world, including China, as long as they print money.

So there were measures to restrict the United States at that time. You can print money, but you can't print it indiscriminately.Therefore, it is stipulated that 1 ounce of gold is equal to 35 US dollars, and it is fixed to be exchanged for 35 US dollars. You print money according to this method, otherwise you will be disastrous and buy the whole world. Doesn’t this cause inflation? No, this method must be used to restrict the United States.The United States said OK, no problem, as long as you make the US dollar the settlement currency of the world.Therefore, at that time, it was stipulated that 1 ounce of gold was exchanged for 35 US dollars.Why do you agree?The Americans said so, he said that we promise to always exchange 1 ounce of gold for 35 dollars.So you European countries and Asian countries, you have no reason to keep gold and sell it to us.You sell me an ounce, and I'll give you $35.Then, you can buy our national debt from the United States with 35 dollars, and you will be given an interest rate of 2.5% per year, which is 25% interest in 10 years. It becomes $1.25, and you can take $1.25 back to buy gold, how wonderful, you can buy more gold back, right?So in the future we will make a decision that the United States will always keep its promise, that is, 1 ounce of gold will be exchanged for 35 dollars, and it will become 40 dollars in a few years. Gold for the dollar, that was the rhetoric of the United States at the time.

Give you US dollars, and the whole world will give me gold, and after a few years, you can make investments, and after making money, you can redeem the earned US dollars for gold.Anyway, it is 1 ounce of gold for 35 US dollars, which is very simple. In 1995, there was a film called "The Great New York Heist" in the United States, which designed the plot of thieves stealing the underground vault of the Federal Reserve Bank of New York.The shooting of the New York underground vault scene in the film is not an exaggeration. In this famous underground vault, the central banks and international organizations of more than 80 countries in the world store more than 300 million ounces of gold.According to the relevant data in the third quarter of 2008, the gold reserves of the United States were 8133.5 tons, about 27.3% of the world's total gold reserves. After the Second World War, the gold reserves of the United States accounted for 75% of the world's total reserves. In what way will the United States, which has such a say in the gold field, decide the fate of gold?

From post-war to 1968, the world has maintained this system, so everyone sold gold to the United States, so now the gold reserves in the United States are the highest in the world.Its gold reserves accounted for 70% of the total currency circulation, while Europe only had more than 20%, China only had 1%, and Japan had only 2%. Gold has flowed into the hands of Americans.As a result, suddenly on a night when the north wind was howling, President Nixon said, comrades, stop playing, and you can no longer exchange for gold. Since then, the dollar has been decoupled from gold.This way, the whole world will be stupid, how can it be decoupled?But the United States is rich and powerful, and no one can do anything about it, so the United States forcibly decided to decouple.As soon as the peg was decoupled, the price of gold rose from $35 an ounce to $800 an ounce.But if you want to buy gold, sorry, the price has changed now. It used to be $35 for an ounce, but now it costs $800 to exchange an ounce of gold. Please remember that this was 30 years ago. Ounces of gold, the price is the same as it is today.Why?Manipulated by the United States.Manipulate the price of gold, and let me tell you again, you can only buy it in the international market.If you spend 800 dollars to buy 1 ounce of gold, if you buy it from Americans, Americans will not sell it.Americans have gold in their hands, but they don't sell it.

We often laugh that the United States is a virtual economy, which is dominated by the service industry and has no real manufacturing industry, so it is not a real economy, but a virtual economy.But don't underestimate the Americans.Although the United States is indeed a virtual economy, the essence of the American economy is the gold standard, and it has the most gold.As for China, it is a real economy, and we don't have much virtual economy, because our service industry accounts for a very small proportion.We are all manufacturing industries, which seem to be a real economy, but our gold reserves are only 1%, and the United States is 70%. We are a country with a serious shortage of gold, and the United States is a country with an excess of gold.

I think that after the decoupling of gold from the U.S. dollar, they manipulated the price of gold from $35 an ounce to $800 an ounce, making a fortune.Then, in 1998, when the "Gold Is Useless Theory" was published and the price of gold was brought down, when everyone began to rush to sell gold, I found that American hedge funds were buying again.After the purchase of gold, it has been pulled to more than 800 US dollars per ounce today.So when I talked about gold today, I was always hesitant, and I was always hesitant about how I should talk to you about this topic.Do I encourage you to buy it?Of course I could do it, but I have a little bit of an uneasiness in my heart because I know very well that I have been misguided for so many years, I never put my mind on gold when I was in school, because we think it is Not important, we should all engage in derivative financial instruments.But gold is indeed misled, the price is pushed up to a high level, and then hit a low level, so I tell everyone, please look at the trend of gold price and the trend of the US stock market, you should see for yourself, you should invest in gold Should you invest in the U.S. stock market or not? You decide.