china's strong yuan strategy & gold bull, page-13

Tetlom,
"The theory that China is switching to a domestic consumer economy, and would benefit from cheaper commodities via a stronger yuan is ,,,"
That is what they are trying to do. We wait and see if they will be successful.

"It would hurt their exports and I cant see that being an acceptable trade off. Did not work out that well for the US when they did it."
As long as overall foreign trade roughly balance, and in line with above, there should be no problem.

"It certainly looks like they are building a huge Gold Position. It gives them a great deal of influence in the pricing, reminds me of the situation with other strategic resources."
He who has the gold makes the rules.

"Wether Gold is a strategic resource or not, remains to be seen. If it becomes a tier one asset, that would be an important validation."
No need for official validation. It is happening. It's de facto, not de jure .

"The reasons for China holding USD reserves and debt are not simple, they would not have enjoyed the growth they had if they had not been lending to the buyers."
Indeed, for 30 years it's been the case. But an era is ending. There is an end to everything. The policy has served China well in terms of exchanging blood and sweat with complete industries setting up China as the big factory it is today, in contrast to an economy of few manufacturing bases plus rice paddocks.

"If POG is inversely proportional to value of China's foreign reserves/debt"
Should I say, POG is the leveraged inverse to the value of USD. Currently the USD and US debt are the international monetary reserve. As the value of both declines and confidence erodes, it will be rejected, firstly slowly and gently, than quickly and suddenly. That leaves a void to be filled for reserve requirement. Gold comes in here.

"Would a lower POG increase distribution/consumption-"
Not very relevant. what's driving gold now is monetary demand, not consumption.

"Can Europe and US grow tax revenues faster than debt? "
Certainly can if the currency is devalued/debased low enough, think monopoly money.