China Is Stacking Gold! Why? -

China is stacking gold.
Why?
In this episode of the Midweek Memo podcast, host Mike Maharrey takes a deep dive into Chinese central bank gold buying, pinpointing the reason China is rapidly expanding its gold holdings.
Simply put, it doesn't want to depend on dollars.
Mike also explains that the de-dollarization trend goes well beyond China and could have significant ramifications for the U.S. economy.
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Mike opens the show recounting an "inane" debate he had on Facebook this week.
<blockquote>
"It was about music. Somebody erroneously claimed the 80s was the worst decade for music. This is clearly false. It was objectively the best era for music!
"Well, at least I think it was.
"But my opinion isn’t objective, is it? It is purely subjective. It’s my opinion. Your opinion may be completely different. And herein we swerve into a fundamental economic truth.
"Value is subjective!
"There is no right or wrong answer as to which decade had the best music. It’s a matter of taste."
</blockquote>
Mike explains that the subjectivity of value makes economic transactions possible. 
<blockquote>
"This is what makes free markets work. Some people value some things more than others. You might think apples are the best fruit. I might think it's bananas. Neither of us is wrong! And the good news is we can cooperate and make both our lives better. If I have a bunch of apples I don’t want, and you have a bunch of bananas, we can trade. You give up the bananas you value less, I give up the apples that I value less, and we both get something we value more. We both walk away happy and feeling like we got the better of the deal."
</blockquote>
Mike says he brought this up because somebody recently told him, "Gold is a horrible investment," noting that the yellow metal has lost over $1,000 this year. 
<blockquote>
"In a sense, he’s right. If your investment horizon is nine or 10 months, gold was a horrible investment this year. If you’ve been holding gold since the 90s, you probably look at things a little bit differently. My point is, gold may or may not be a good investment for you depending on your goals, your time horizon, your risk profile, and a billion other factors. But it might be a fantastic investment for me right now. Value is subjective."
</blockquote>
As Mike explains, there are some objectively good reasons to own gold.
<blockquote>
"You don’t want to save in fiat money over the long term because it is objectively a bad way to save due to constant currency depreciation. If you save in dollars, you know they will be worth less next year. That’s because the stated plan is to devalue the dollar by at least 2 percent annually. That means you lose a little more than 10 percent of your purchasing power every five years as a matter of policy. Why would anybody save dollar KNOWING they will buy less?"
</blockquote>
Before leaving the subject of value, Mike explains why the Marxist labor theory of value falls apart. 
<blockquote>
"The problem is the amount of labor that goes into a good, or service, has nothing to do with its value. That is determined by the consumer and what she’s willing to pay."
</blockquote>
Mike uses a mud pie example to drive home his point.
Mike then pivots to the subject of China, noting that the country has bought a lot of gold, both officially and in secret. He points out that the mainstream has noticed this phenomenon and has started asking questions. He specifically highlights a recent CNBC article that declared, "That buying spree reflects Beijing’s push to cut its dependence on the dollar.”
Mike points out that China is part of a broader <a href="https://www.moneymetals.com/news/2025/03/11/de-dollarization-gold-and-a-shift-to-a-multipolar-world-003898">de-dollarization trend</a>, driven by two broad concerns — one economic and the other geopolitical. 
<ol>
<li>The <a href="https://www.moneymetals.com/news/2026/08/20/the-40-trillion-national-debt-in-perspective-005151">ever-increasing U.S. debt,</a> with no sign the government has any intention of rolling back the spending</li>
<li><a href="https://www.moneymetals.com/news/2024/02/29/could-weaponization-of-the-dollar-as-a-foreign-policy-billy-club-accelerate-de-dollarization-003013">The weaponization of the dollar</a> as a foreign policy tool.</li>
</ol>
Mike explains the dynamics behind both worries.
But why does this matter?
Mike explains that if the de-dollarization trend continues, it spells big trouble for the U.S. – even if the dollar maintains its reserve status.
<blockquote>
"Simply put, the United States depends on the global demand for dollars to underpin its bloated government. De-dollarization threatens an inflation tsunami as those unwanted dollars make their way back to the U.S."
</blockquote>
Mike draws the logical conclusion.
<blockquote>
"And this, ladies and gentlemen, comes back to my earlier point about saving in dollars. You don’t want to do that – not in the long run. Unless, of course, you value your money losing value."
</blockquote>
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Mike wraps up the show explaining how Hong Kong's push to become a global gold hub is boosting the yuan and could further exacerbate de-dollarization, pointing out an S&P Global Ratings analyst who said, “As those [gold] trading volumes [in Hong Kong] grow, there would be a growing volume of the physical gold trade that is denominated in RMB and not linked in USD.”
Mike highlights several of the initiatives Hong Kong has taken to raise its stature as a gold hub, including yuan-denominated futures contracts and expanded valuting capacity.
Mike quotes Nanhua Futures head of precious metals and new energy research Xia Yingying, who said gold accumulation by China and other central banks will “reduce global reliance” on U.S. Treasuries and dollar reserves.
<blockquote>
“In the medium to long term, it will gradually weaken the U.S. dollar’s monopolistic position in the global reserve system.”
</blockquote>
And  Mike points out, "We’ve already discussed why that’s a problem."
Mike closes with a call to action, urging listeners to call 800-800-1865 and talk to a Money Metals precious metals specialist today.
<h2>Articles Mentioned in the Show</h2>
<a href="https://www.moneymetals.com/news/2024/02/29/buy-gold-and-silver-to-hedge-against-counterparty-risk-003015">Buy Gold and Silver to Hedge Against Counterparty Risk</a>
<a href="https://www.moneymetals.com/news/2026/07/09/hong-kong-launches-gold-settlement-system-to-challenge-western-dominance-005050">Hong Kong Launches Gold Settlement System to Challenge Western Dominance</a>
<a href="https://www.moneymetals.com/news/2025/04/02/chinas-gold-reserves-going-through-the-roof-003956">China's Gold Reserves Going Through the Roof</a>

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