Chapter 270 Touching on the US Dollar Hegemony
After New Year's Day, we entered the 80s, and Li Changhe also successfully entered the era of post-80s.

After finishing the school exam, Li Changhe was packing his things in the dormitory.

The disadvantage of not living in a big dormitory is that it is quiet every day and no one greets him during graduation holidays.

"Changhe, are you going home?"

In the dormitory, Lin Yifu watched Li Changhe packing his things and asked with a smile.

"Yes, Lao Lin, I'll leave first!"

Li Changhe said to Lin Yifu with a smile.

Although it is winter vacation, it makes no difference to Justin Yifu Lin. He is all alone here and he is in school whether it is vacation or not.

So, sometimes making some decisions really requires tremendous courage, and the price to pay is quite high.

"bye!"

Lin Yifu waved to Li Changhe. Sometimes he inevitably uttered some English words, but Lin Yifu was surprised to find that Li Changhe could understand them all.

Over time, the way two people get along sometimes becomes more modern.

"gone!"

Li Changhe waved his hand. Not to mention bye, he even knew what the word "motorcycle" meant.

After returning home, Li Changhe immediately changed his clothes, then picked up the suitcase he had prepared last night, and went out.

"Go to the airport!"

As they went out and got into a taxi, Li Changhe said without hesitation.

His time is very urgent, mainly because the price of gold has risen.

There are many reasons. After the Iranian hostage crisis, another war that was enough to cause international unrest occurred in December: the Soviet invasion of Afghanistan.

The War of the Imperial Graveyard has officially begun, which also means that the two powerful hegemons, NATO and the Warsaw Pact, are either on the brink of war or have already started a war.

In addition, the economic data in the United States this year was very disappointing, and the annual inflation rate soared to an unprecedented 13%.

So at the beginning of this year's New Year, the price of gold began to soar, directly breaking through 600 US dollars.

This soaring price shocked Wells again.

Seeing that the second wave of silver storm was about to begin, Wells no longer cared about the fact that the price of silver had risen to $45, and began to send telegrams to Li Changhe steadily every day.

Yes, after seeing the price of silver continue to soar, Wells felt a little regretful.

After all, they could make a profit of more than 20 million US dollars for every one dollar increase in the price of silver, but now it has increased by nearly ten dollars, resulting in a loss of 200 million US dollars.

But all these regrets disappeared after the gold price rose to $600.

Now, all Wells could see was the soaring price of gold.

After all, at this moment, the basic funds they invested are also large. Although the leverage ratio is not high, the overall return is obviously higher than that of silver.

The premise is that they can get out before the gold price collapses.

In fact, Wells really wants to run away now, because the gold market has become very unstable after rising to this price.

But Li Changhe didn't want to run, so he could only watch anxiously.

At the Capital International Airport, after Li Changhe got off the taxi, he hurried into the airport.

In November this year, China and the UK reached an agreement on the Civil Aviation Transport Agreement.

This also opened up mutual civil aviation flights between the two sides.

Although Hong Kong Island is excluded from this air transport agreement due to its special nature, direct flights to Hong Kong Island are still opened.

The route mission is operated by airlines designated by China and the UK respectively, and now there is a route from Beijing to Hong Kong Island.

The British route flies to Shanghai.

Li Changhe is now considered one of the earliest customers to enjoy this wave of routes.

At seven o'clock in the evening, Li Changhe boarded the plane.

Then around 11 o'clock, we landed at Kai Tak Airport in Hong Kong Island.

At the airport exit, Wells and Richard were already waiting there.

Seeing Li Changhe, he waved hurriedly.

"You're finally here!"

Seeing Li Changhe coming, Weiers breathed a sigh of relief.

He is now unable to sleep every day because of the torment of gold prices. He is afraid that when he wakes up, the price will collapse and all the fat money he has earned will be gone.

That way he will regret it to death.

"Let's go back to the hotel first."

Li Changhe had been traveling all the way and was very tired and exhausted.

It was still the Peninsula Hotel, the top suite. Li Changhe put the suitcase in skillfully.

Then Richard tactfully closed the door and left.

"How is it? How much has the price of gold increased to?"

"It has broken through $650 today, and the amount of gold released into the market has also increased."

"More and more countries and institutions are starting to buy gold to preserve its value."

Weiss said to Li Changhe seriously.

"What do you think, Changhe, should we take action?"

“How much gold do we hold now?”

Li Changhe asked again.

"It's worth about $15 billion now." "The amount of gold released into the London market has also increased significantly recently. Obviously, seeing the price skyrocketing, they also want to make money."

In addition to influencing the price of the gold market, the five major gold houses in the London gold market are also responsible for selling spot gold to the world.

Therefore, most of the gold produced in the world each year comes from the London gold market.

When prices rise, they will naturally increase supply as appropriate.

After all, they are not only securities firms, but also raw material suppliers.

"No, it is impossible for the London market to release so much gold. There is another possibility that major central banks will start selling their gold reserves."

"Let's wait!"

Li Changhe analyzed seriously at this time.

People always have a false perception of the elites of various countries, believing that they can see through all world situations.

But in fact, if you look at it from the perspective of the future, you will find that many times, decision makers in many countries and many industries make completely irrelevant decisions.

Just like the gold market today, some countries are purchasing to hedge against risks, but some countries believe that they are manipulating the market and are selling their reserve gold in large quantities.

This is also the reason why many storms take shape. Behind every financial storm, there are many smart people who fan the flames.

"Still waiting? Changhe, let me tell you, the price of gold is very high. It is impossible for it to increase several times like silver."

"Our price has now gone up by 50 percent, which is already a big profit. I think it's too risky to continue holding on."

"Like you said, even central banks of many countries are selling gold. If you don't run away at this time, what will you do if the market crashes?"

Weiss spoke to Li Changhe seriously.

Li Changhe smiled and said: "Dumping the market? No, I think these countries are actually adding fuel to the fire in the gold market!"

"Will, what do you think of the demand for gold over the years?"

“Demand for gold?”

Wells frowned slightly and began to think.

Li Changhe didn't wait for him to think it through, but smiled and said, "In fact, the gold reserves have been completely unbalanced over the past few years."

"In the past few years, the world's high-quality gold has basically been monopolized by the West or stored in underground vaults in New York."

"It can be said that the developed countries in Europe and America account for the bulk of gold reserves."

"This time, the sell-off was also a joint sell-off by central banks of several countries. For them, perhaps they wanted to take this opportunity to absorb a wave of global wealth."

“But I think what they’re missing is the global demand for gold right now.”

“This demand does not refer to industrial demand, but to the value demand as a monetary standard.”

"After World War II, many countries became independent. From 45 to now, more than years have passed. Many countries have actually recovered, such as northern and southern Europe, and now Asia."

“But because of the Bretton Woods system, these countries didn’t have much gold in the past.”

"The bulk of gold is in the hands of the leading countries in Europe and America. So for the national currencies of various countries, it is very unsafe without a standard currency."

"Especially now that the dollar is no longer pegged to gold and the world is facing a war crisis, the demand for gold in the market may be greater than you and I imagine."

"In this case, I think the supply in the market cannot meet the needs of many people."

"I think we can wait and see, especially the attitude of the United States."

"If they continue to sell their national reserve gold on the market, there may be a risk that the gold market will fall."

“But I think they’re going to stop selling gold soon.”

"why?"

Weiss asked in confusion.

"It's simple, dollar hegemony!"

"You have to know that the reason why the U.S. dollar can be circulated in major countries around the world is that it was pegged to gold."

“So in Hong Kong Island, you call it US dollars.”

"But think about it, if the amount of gold in the world is too dispersed, and the currencies of various countries can be linked to gold, will the liquidity of the US dollar still have value?"

"Once gold is over-issued, its standard property can completely replace the US dollar in circulation or anchoring. Do you think this situation is good or bad for the US dollar?"

Li Changhe spoke to Weiers seriously.

But Wei Si felt as if he was listening to a foreign language.

He also studied economic theory, but these Western-educated elites rarely studied things like dollar hegemony.

Just like for Wells, it is natural for the US dollar to circulate throughout the world because the United States is powerful and is pegged to gold.

They have never conducted an in-depth analysis of how the dollar hegemony was formed. After all, what does this have to do with them?

Is it possible to defeat the United States?
So when Weiersi heard Li Changhe's words, he was not only shocked, but also speechless.

Damn, is this the confidence of the University of Tokyo?

A student in school has nothing better to do than to study the dollar hegemony?
The research is so in-depth?

"Changhe, to be honest, I have never thought about this."

"I think only economists, or economic officials who formulate World Bank policies, would consider this."

"I don't know what to say about your judgment."

Wei Er Si said helplessly at this moment.

He thought he had tried his best to catch up with Li Changhe's train of thought, but he did not expect that the other party was in the atmosphere at this moment.

"Just wait and see what the US' attitude is. I think their people will soon discover the problem here!"

It may be nonsense to discuss other things, but the level of American economists, whether Jewish or Anglo-Saxon, is indeed very impressive!

(End of this chapter)