FLIGHT FROM PAPER CURRENCIES TO GOLD: MY CONSPIRACY THEORY

So, China devalues its currency today by 2% to boost its economy. This is what I think is happening. China has been stocking up on its gold reserves, in anticipation of  push to have Yuan become a reserve currency and have the influence of the dollar reduced in global trade. So, let’s allow the Yuan to be devalued. Let’s wait for the inevitable collapse of the dollar due to massive printing (quantitative easing). Let’s peg our Yuan to the gold standard, in one way or the other. And then allow the world to choose which fiat currency they prefer. The dead dollar backed by a fast emptying US gold reserve and massive QE or the dead yuan backed by an ever increasing gold reserve. All in all, I think this is a win win for gold. A devalued dollar and a devalued yuan makes a case for gold in high demand. I am waiting for slight weakness in the US dollar to push Gold higher. See the charts below to see how the demand for gold versus paper currencies seems to be increasing. Pay special attention the the divergence between GoldUSD and GoldEuro/GoldYen. This is value flow trading! By the way, I just launched my Trader Training and Mentoring website: http://www.valueflowtrading.com. Check it out!

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