Many global currencies are still associated with the United States dollar, relying on it to dictate their value. Substantial dollar devaluation is causing currencies pegged to the dollar to be undervalued, as well. The Chinese Yuan is one of these currencies, but China appears to be moving towards accumulating hard assets in the form of precious metals. This movement is evidenced by the Chinese government’s push for private ownership of silver and gold, in addition to its increase in production and import of precious metals.
Many believe that China cannot develop without the help of Western civilization, but China is not the only nation to begin movement away from the dollar. Other Asian countries, as well as African and South American economies have also shown signs of jumping ship. Should the trend continue, the US could find it increasingly difficult to continue its deficit lifestyle.
As China discretely amasses precious metals, while prices are low, the US continues to tout the dollar’s rise in global currency markets.