Ya know, just when you think gold bugs have started taking their meds, you read a guy like Wallerwein.
I'll say this slowly, with one-syllable words so even gold bugs can understand.
China has lots and lots of fac-tor-ies that take im-por-ted parts and fuel and turn them into goods they sell to Wal-Mart.
Wal-Mart pays them with hard cur-rency, which they use to pay for the im-por-ted parts and fuel.
China has lots of Merican Currency sitting in a big bank, that they can use to pay for, oh, two or three years of imports, without earning another dollar.
China therefore doesnt care what the Yuan trades at ... they can and will regulate buying in-China assets with dollars, and they can and will regulate exporting dollars from China.
Gold bugs - long and wrong on gold since 1580 or so ... remember, the Fuggers whined the Genoese had more paper than hard cash, and look where it got them.
Fiat currencies ... the modern alternative to the Panic of 1890.
