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John Rubino edits DollarCollapse.com and has authored or co-authored five books, including The Money Bubble: What To Do Before It Pops, Clean Money: Picking Winners…

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This Is What Gold Does In A Currency Crisis, China Edition

As China's leaders figure out that pegging the yuan to the dollar while quintupling their debt in five years was a colossal mistake, they are, apparently, concluding that the only way out is a sudden, sharp currency devaluation. See Pressure on China central bank for bigger yuan depreciation.

Chinese citizens, meanwhile, are anxiously awaiting tomorrow's market open while mentally repeating the same three lines:

Sure am glad I bought that gold last year.

Wish I'd bought more gold last year.

Wonder what I'll have to pay for gold next week...

Here's what that looks like in graphical form:

Gold in Chinese Yuan

If China does spring a 15% devaluation on the already-wound-too-tight leveraged speculating community, the impact should be, well, amusing for sure, but otherwise a little hard to predict. About the only thing that can be said with near-certainty is that the above chart will have to be updated with much higher left and right axes.

 

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