Alasdair Macleod: China's Gold Standard

The PBOC removed the requirement for permission to export gold out of China into Hong Kong—making it a purely customs matter—which effectively removes exchange controls on gold and provides crucial liquidity for the new Hong Kong gold market by allowing wealth holders to move gold between jurisdictions.

“there was um a little noticed uh announcement by the um PBO I think it was the PBOC that they would no longer um uh it will be no longer required for the PBOC to give permission for gold to move out of China into Hong Kong. it would purely be a customs matter.”

The Deutsch mark remained consistently strong throughout the post-WWII period not because Germany suppressed it, but because Germans saved at high rates (30-35%), naturally constraining domestic demand and generating export surpluses.

“the the Deutsch mark was strong. It was consistently strong. And of course, everybody said that um you know, they're suppressing it, which is why um you know, Germany has got such a large export surplus. Well, how was it that with a strong Deutsch mark, you had an export surplus? The answer was that Germans saved.”

China is planning for a future without the dollar—not just for itself, but for the world—and sees the collapse of the dollar coming fairly soon, with the ultimate goal being a gold exchange standard between the yuan and gold to replace the failing Western fiat currency system.

“What we are seeing is no less than China planning for a future without the dollar. Not just her being without the dollar, but the world being without the dollar. She sees the collapse in the dollar coming through fairly fairly soon.”

Governments that tax savings, suppress interest rates to encourage consumption, and follow Keynesian stimulus undermine their own economies, while the 19th-century UK and Europe developed their industrial revolutions under gold standards without requiring Keynesian stimulus through stability mechanisms.

“It's an issue which you can actually make backfire on yourself by taxing savings, discouraging savings, suppressing interest rates to encourage consumption. That way you destroy your economy. So you know you got to dismiss all this Keynesian rubbish which everybody believes in.”

Macleod rejects Keynesian economics, calling it 'rubbish'; he argues that export-import balances are a side issue and the real problem is when governments tax savings, discourage savings, or suppress interest rates to encourage consumption, which destroys the economy.

“you got to stop looking at um the idea that uh exports and imports are the be all and end all of economic activity. No, they're not. It's a side issue. But it's an issue which you can actually make backfire on yourself by taxing savings, discouraging savings, suppressing interest rates to encourage consumption. That way you destroy your economy. So you know you got to dismiss all this Keynesian rubbish which everybody believes in.”

China's PBOC has accumulated an estimated 20,000 to 25,000 additional tons of gold beyond officially declared reserves in recent years, giving the state total holdings of approximately 50,000 tons—representing 30 to 35% of global above-ground gold stocks—through a combination of official purchases during the gold carry trade era (1980s-2002) and recent aggressive acquisitions.

“I think that the Chinese government has probably accumulated a further what 20 25,000 tons something like that. So they've got 50,000 tons as a state quite easily.”

During the 1980s, Western bullion banks engaged in a gold carry trade—leasing gold from central banks at ~1% and investing the proceeds in US Treasuries yielding ~10%—but analyst Frank Veneroso documented that approximately one-third to one-half of the gold leased out never returned, having been absorbed into the market, likely purchased by the PBOC.

“the gold carry trade in the west began and this was the means whereby um um bullion banks if you like would lease gold from central banks, sell that into the market and invest the proceeds and not only them but hedge funds as well but invest the proceeds in US treasuries. Now the lease rate would be something like 1% and at the time US treasuries were yielding as much as 10%.”

When one ounce of gold becomes equivalent to a million dollars (due to currency collapse), the volume traded in London becomes irrelevant because the currency's purchasing power is destroyed—leading to the practical death of the LBMA as a reference market.

“just imagine um you know if uh if one ounce if you like is the equivalent of a million dollars which will be the situation in a currency collapse then um how important does London become? I mean, you know, the volumes might sort of appear to be fantastic, but you know, if a million dollars doesn't buy you a cup of tea, so what?”

The Western paper gold market is in structural decline as banks exit and the East builds a physical infrastructure network (SGE vaults, refining capacity), creating a two-tier system: the West's collapsing paper system versus the East's rising physical system.

“It's been developing this way for some considerable time. Um and as I said earlier it's not just a question of um all the gold going east but now the market is as well. That's where the future of the future market is.”

China's reversal of precious metals export policy—from suppression/export to aggressive imports of gold, silver, and copper—is evidence that the PBOC views the current moment as a crisis requiring immediate currency substitution, not a manageable normal-state adjustment.

“instead of, um, uh, exporting silver to try and suppress the price, she's now just turned 180° and is now importing silver to get rid of dollars. She's importing gold to get rid of dollars. She's importing even copper to get rid of dollars.”

China has stopped exporting chemicals like sulfuric acid and fertilizers that would earn dollars, as part of a comprehensive strategy to avoid dollar accumulation and force other nations to process their own ores, accelerating China's positioning as the global refiner of non-ferrous metals.

“she's also stopping exports of various other things which would earn her dollars like um sulfuric acid like fertilizers and so on.”

The silver squeeze is 'only phase one'—industrial demand from manufacturing and refining will 'clean out silver liquidity,' and simultaneously investor demand (as individuals hedge away from devaluing fiat currencies) will create 'a huge great conflict between industrial demand and investor demand' in coming months.

“the silver squeeze is only you know we've just seen phase one of that that's going to turn around and um we're looking at essentially a squeeze due to industrial demand and nothing else.”

The US has no credible defense against a Chinese or Russian gold standard announcement: the US must first prove it hasn't disposed of its gold by consulting the Bundesbank, but the Bundesbank's 2012-13 attempt to retrieve 300 tons from the New York Fed was told it would take seven years, indicating the Fed does not actually have the gold to return.

“What I mean what the Americans response to this going to be? Help. I mean they got no answer to it. First they need to prove that they haven't got rid of all their gold. go and speak to the Bundis Bank and say what their opinion is. I mean, they were the ones who tried to get 300 tons out of the New York Fed back in whenever I think it was what, 2012, 13 or something. And they were told it would take seven years.”

Physical gold ownership should be stored outside the banking system and outside one's home jurisdiction, with private vaults in neutral jurisdictions (e.g., Switzerland) preferred to LBMA-affiliated storage, to minimize government access and confiscation risk.

“the important thing is not to store it in a bank not to have a bank involved. I think that's that's that's the key thing.”

If Russia placed the ruble on a gold standard, Russian banks could lease gold from Western central banks at ~1% while earning a return of ~13% (current Russian interest rates) by shipping the gold to Russia and re-loaning it, creating an arbitrage that would immediately force Western economies to raise interest rates catastrophically or default, 'destroying the finances of Britain, France, and Germany completely.'

“if they put Russia onto if they put the ruble onto a gold standard, what would happen is that the Russian banks would be in our markets buying gold, leasing it even for 1% and because the ruble would be a gold substitute effectively uh shipping it into um uh Russia uh in you know with a return of something like 13%. You know what's not to like?”

A ruble gold standard would strengthen China and Russia's economies 'enormously' and is therefore 'a must, whichever way you look at it,' but macroeconomists don't understand this because they lack historical experience with functioning gold standards.

“this is something which must be done for is for the good of not just for for the world, you know, looking at this chasm of currency collapses, but as far as China and Russia are concerned, I mean, this is going to add so much strength to their uh economies. I mean, it's a must whichever way you look at it. I know that macroeconomists don't understand it, but then that's their problem.”

The LBMA (London Bullion Market Association) could potentially be pressured by Americans through British authorities to disclose the identities of all vault owners, allowing governments to target individuals for confiscation of precious metals.

“because one of your problems is that uh the LBMA could well be lent on by the Americans through the British if you like uh to um give all the details of who owns what in them all the vaults. I don't rule that out. I wouldn't rule that out.”

China has shuttered leverage gold and silver trading on domestic markets to prevent speculation, while simultaneously encouraging gold accumulation accounts; this targeted approach stops speculative futures positions while encouraging stable investment.

“China also shut down um leverage gold and silver trading but then still encouraged then the gold accumulation accounts.”

The Comex and London gold/silver futures markets are experiencing historic lows in open interest (not seen in 10-15 years), and this is driven not by lack of speculator interest but by banks actively avoiding dealing and quoting prices 'way out there' to exit the market despite still maintaining enormous short liabilities.

“if you look at the open interest in on Comx um you know I mean in both gold and silver they are hitting historic well not certainly lows for over the last uh 10 to 15 years. Uh and I don't see that really recovering.”

Russian government finances are in very good order—government debt to GDP is less than 20%, personal tax rates around 13%—and Russia can implement a gold standard tomorrow without the vulnerabilities that would constrain other economies.

“Russ Russia is fascinating. Um her her finances are actually in very good order thanks to uh her ability to export um energy in particular. um uh government debt to GDP is less than 20%. Um personal tax rates are around about 13% something like that.”

Gold and silver premiums in Eastern markets have exceeded $20/oz in some cases, with large price differentials between East and Western spot prices, reflecting the market structural bifurcation and natural flow of physical from West to East where prices are higher.

“we've already seen the divide also between the price of the east and the west have been some large premiums uh sometimes exceeding 20 uh dollars an ounce for the silver price and more.”

If the US transitions to a gold standard with the dollar collapsing, America will be in the same position as Germany was in 1920-1923 (Weimar hyperinflation), meaning some manufacturing might recover but only under deflationary conditions incompatible with current debt servicing.

“if you get um you aren't going on to a gold standard and the dollar collapsing and all the rest of it. I mean basically America will be in the same position as um Germany was in 1920 to 1923. Yes. I mean some manufacturing businesses will do extremely well.”

Retail investors can store gold in jurisdictionally-diverse, insured private vaults through services like GoldRepublic, which provide ownership verification, transparency, audit access, and vault visitation rights—important due diligence requirements to verify the operator's legitimacy.

“if you don't have like a couple of 100,000 to invest on Gretch, you can also go at gold republic.com”

The gold storage sector has experienced rapid expansion and growth scams as the gold price has risen from ~$1,000/oz in 2016 to $5,000+ recently, requiring extreme caution in selecting custodians and understanding their storage practices and security models.

“this is a business which has expanded quite recently quite you know quite um sharply as the gold price has gone up from what just over a thousand in in um 2016 to 5,000 recently. Um undoubtedly there you know you got a lot of crooks entering in in into this business.”

If the yuan-gold price (once fixed) will go through the roof due to dollar collapse consequences, fixing it while there is still speculative trading would create a financial crisis in the Shanghai futures exchange; therefore, banks have been told not to open new futures positions.

“if they're going to put um the yuan onto a gold standard that does imply that the gold price is going to go through the roof. um because of the consequence for the dollar if you like. It's not gold going up so much but it's the dollar going down. Uh so um you know this would absolutely create a financial crisis in uh the Shanghai futures exchange and that's why I mean obviously the banks have been told look once this current contract ends don't open new positions um and don't let your customers your clients open new positions”

If the London physical market no longer has enough depth to offset COMEX short positions that banks maintain, the markets will collapse when this hedge breaks.

“if billion banks are then short on comics as you mentioned then they also normally edge through London uh what would happen if then the London physical market then is no longer deep enough to offset that risk. What will happen then?”

The Netherlands was particularly fortunate to retrieve approximately 1,000 tons of gold from the New York Fed, likely as a result of pressure from the Bundesbank's experience with retrieval delays.

“I think the Netherlands did jolly well to get their gold back. I think they got about a thousand tons back. But I mean that was on the back of such a bad stink over how the Bundes Bank was treated that um it was realized I think that uh you know we've got to hush this one up. So give the Netherlands back their gold.”

Sergey Glazev wrote an article 3-4 years ago in a Moscow business magazine about how it would be easy to put the ruble on a gold standard, which Macleod interprets as a signal that Russia's highest circles were thinking about this as a real option.

“And not only that, but Sergey Glazv wrote an article in um a Moscow business magazine um about what three years ago, four maybe four years ago um saying, you know, it'd be very easy to put the ruble onto um a gold standard. And he was right. Um it was interesting that that was published because um I think it was a signal that this is something which was being thought of. let's put it that way. In the highest circles in Russia,”

~76% (or 75%) of China's silver does not come from mining but from refining copper, zinc, lead, and gold as byproducts; only ~25% comes from primary silver mining.

“most of her silver doesn't come from mines. I think something like 76% or something or 75% uh comes from refining copper um zinc lead and gold. the rest of it is mind. But I mean, we're talking about um you know, roughly a quarter of it coming comes from minds.”

The US economy faces a slump due to the energy crisis (Hormuz disruptions) and will be unable to prevent currency destruction because the Fed will print money to support collapsing markets and bail out 'zombie' companies, inevitably destroying the dollar.

“the US economy is facing a slump because of the energy crisis. And not only that, but because inevitably the Fed will print print to stop markets collapsing to um you know bail out the zombies and all the rest of it. I mean whatever. You can see that they're going to destroy their currency.”

In February 2026, the PBOC instructed its banks not to hold excessive US Treasury securities, which Macleod interprets as a signal to get rid of them entirely, not merely to reduce exposure modestly.

“back in I think it was in February, she told her banks um don't hold too many US treasuries. Now I think that's um if you like uh um a signal you know it's not just a question of don't hold us trespassor get rid of them that's really what she's saying um”

Russia could disclose much larger levels of gold in reserves than the 2,000-2,300 tons officially held by the central bank because of sovereign wealth funds that intelligence suggests hold something like 10,000 tons between the two principal funds.

“Russia can easily disclose far larger levels of um gold in her reserves than uh just the 2,00 2,300 tons or whatever that the central bank holds because they've got sovereign wealth funds. And um you know sort of intelligence suggests that they've got something like 10,000 tons between the two principal uh sovereign wealth funds.”

Russia's gold mining has accelerated substantially such that Russia probably now rivals China as a gold miner.

“the level of gold mining has accelerated quite substantially in Russia. So much so that she probably now rivals China as a gold miner.”