Many countries claim they have “gold-backed” currencies, in an effort to try to provide security and investor confidence. However, the reality is that none of the world’s fiat currencies is even remotely gold-backed and even less so the Chinese yuan.
In this short video, we explain what governments and central banks would need to do to try to achieve a respectable level of stability close to gold-backing.
- Increase gold reserves at the central bank.
- Reduce the increase of money supply so that it does not grow above real GDP.