While the West is going into debt to sustain a system that is falling apart, China is making moves to redesign the rules of the game. Its monetary manoeuvres, seemingly technical, point to a silent revolution: the devaluation of fiat currencies through massive injections of liquidity and the aggressive accumulation of gold as a new pillar of the global financial system. 

In this geo-economic game, precious metals are once again taking centre stage — not out of nostalgia, but for survival. When gold broke through the $4,000 per ounce barrier, many analysts attributed it to market instability. But there is much more to this rise than speculation. The value of gold cannot be explained solely by market dynamics, but also by political decisions that make it shine—or fade.

Until 1971, the international monetary system was based on gold. The Bretton Woods Agreements (1944) had set the dollar’s parity at $35 per ounce, making the US currency the global benchmark. When Richard Nixon broke that link, the world entered the era of fiat money: currencies based solely on trust and the ability of states to issue debt.

This ‘monetary faith’ worked for a few decades. Central banks printed money, economies grew and markets remained stable. But the 2008 financial crisis broke the spell, when printing money no longer generated real wealth, but only inflated bubbles. And now, half a century later, China seems ready to accelerate the end of that model.

Beijing’s double play

China’s strategy seems contradictory when it comes to injecting liquidity while buying gold. But in reality, it is monetary engineering with two clear objectives: 

1. Control its domestic economy. The Chinese economy has slowed down after decades of rapid growth. To avoid social unrest, the People’s Bank of China has lowered interest rates, expanded credit and boosted state investment. This stimulus maintains consumption, but also devalues the yuan, increasing export competitiveness. Likewise, each wave of Chinese liquidity spreads through international markets and contributes to weakening Western fiat currencies.
2. Shielding itself with gold. Beijing knows that every yuan issued reduces its real value. That is why it compensates with gold. According to the World Gold Council, the Central Bank of China has added more than 300 tonnes of gold in 2024 alone, accumulating reserves for more than eighteen consecutive months. Gold now accounts for more than 15% of China’s reserves, and this proportion continues to grow. The message is clear: while the West prints banknotes, Beijing prints power.

This is not a formal return to the gold standard, but a quiet transition to a mixed system of digital money backed by real assets. Gold is once again the backbone of confidence.

The slow death of fiat currencies

Since the 2008 crisis, the Federal Reserve, the ECB, and the Bank of England have doubled or tripled their balance sheets. Global debt now exceeds $315 trillion, according to the Institute of International Finance. This expansion has sustained economic activity, but it has also created a chronic dependency: the system can only survive if more liquidity is added each year.

China has learned its lesson and is turning it to its advantage. It does not want to sustain the system, but rather redefine it. Instead of competing with the dollar within its rules, Beijing is writing new ones, through a clear reliance on credit and other tangible assets. Therefore, every time central banks announce a rate cut, the same patterns repeat themselves: gold rises, bitcoin rises, stock markets breathe a sigh of relief. But there is one essential difference. The precious metal does not depend on anyone: it is not a bank liability, nor can it be printed by any government. It is scarce, tangible, and universal.

Bitcoin, for its part, is its digital equivalent in terms of programmed scarcity and resistance to censorship. But its volatility still makes it a speculative asset. Gold, however, is the stable memory of wealth. It has been sustaining human economic confidence for 5,000 years. It is therefore no coincidence that central banks and institutional investors are once again loading up on gold. When confidence falters, gold becomes the currency of common sense.

Gold as a geopolitical weapon

For China, accumulating gold is much more than a monetary policy; it is a strategy for sovereignty. Since 2010, it has reduced its exposure to the dollar from 70% to 50%, while increasing its gold reserves and bilateral trade agreements in yuan. At the same time, it has created alternative payment systems to SWIFT, such as CIPS (Cross-Border Interbank Payment System), which allows transactions outside the control of the United States.

Every ounce of gold in China’s reserves is one ounce less dependence on the dollar. In a world where the financial system is used as a tool of sanction, having gold is equivalent to having freedom. History proves this when the United States accumulated 70% of the world’s gold after World War II, allowing it to dominate the global economy for decades. Now, Beijing is doing exactly the same thing, but in a digital and multipolar context.

While China plans decades ahead, the West governs by election. The United States has accumulated more than $35 trillion in debt, the interest on which now exceeds military spending. Europe, for its part, is sinking into its own bureaucratic rigidity: more taxes, less innovation and growing energy dependence.

The Old Continent, once the cradle of industry, now seems like a maintenance economy. Its commitment to regulation and taxation has penalised savings and entrepreneurship. While Silicon Valley and Shenzhen compete for technological dominance, Brussels debates labels and regulations. The risk is clear: a golden digital future without Europe.

From digital money to tangible money

The paradox is that the same technology that has opened the door to cryptocurrencies is breathing new life into gold. China understands this: it is simultaneously developing its digital yuan (e-CNY) and accumulating physical gold. The goal? To create a sovereign digital currency, backed by real assets and capable of competing with the dollar without depending on them.

Europe, on the other hand, sees CBDCs as a tool of control rather than freedom. Beijing sees them as an instrument of independence. In this context, gold is the guarantee that gives credibility to the digital yuan, reinforcing it as a global alternative.

Markets reflect not only data, but collective emotions. When investors perceive that governments have lost control of debt or inflation, they seek refuge. Gold and other hard assets become symbols of something deeper, such as a loss of faith in the fiat system.

This is, in fact, the real epicentre of the current crisis: a crisis of confidence. Fiat money only has value as long as people believe in it. And every time a central bank prints billions out of thin air, that faith cracks a little more. China is taking advantage of that crack. Every gold purchase, every yuan trade deal, every new non-dollar reserve is a move in a global chess game that the West seems blind to.

Towards a new global monetary order

The world is moving towards a multipolar equilibrium in which gold will once again play a central role, not as a currency, but as a guarantee of trust. Countries with tangible reserves — China, Russia, India — will gain power; those that depend on credit will lose it. Gold could act as partial support for new international digital currencies, or as an instrument of compensation between states outside the SWIFT system. This would not be a return to the classic gold standard, but rather a hybrid model combining digital technology with real value.

Beijing is therefore not breaking the system, but rather gradually replacing it, with the patience of a civilisation that thinks in terms of centuries, not quarters. In a way, it is building its own 21st-century Bretton Woods.

For Western citizens, the lesson is clear when paper money is devalued, but real metal retains its value. In a world flooded with liquidity and instability, the tangible is once again power. Gold, which for millennia has been a symbol of wealth, is once again a tool of protection against the fragility of the system.

As we have repeated on several occasions in La Plaça: ‘When confidence fades, value takes refuge in the real.’ And when the dust of the credit system settles, gold —ancestral immutability— will continue to shine, not as a symbol of the past, but as the foundation of the future.

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