[Once it opens the SGE Gold-Yuan pricing mechanism", if China increases the number of yuan required to buy a troy ounce of gold, for example, the USA must allow the dollar gold price to rise with it. If not, the yuan will fall against the dollar. In other words, China will determine the value of the US dollar on world markets, not the USA. That shifts the power and leverage away from Washington DC and toward Beijing, and will have a dramatic effect on the financial strength of the US government.


Once China has enough gold, it will bid up the yuan-denominated price into the stratosphere. Once it does that, there are only three choices [For the US]. (1) Maintain credibility and the reserve currency status by refusing to change the price of US dollar denominated gold. If it does that, domestic industries will be crippled by Chinese competition, because the yuan will become very cheap in relation to the dollar. (2) Allow the dollar denominated price of gold to skyrocket in synch with the yuan denominated price. That will end the US dollar's reserve currency status. (3) Kow-tow to Beijing, seeking a seal of approval from China for any serious financial maneuvers.

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