I think that at 41k per kilo one tonne of gold is worth $41m.
1300 tonnes of gold is therefore worth a bit more than $51bn, which is a lot, but approximately 1 year of the UK's defence budget, so in the scale of things not really all that much.
Now, this would mean that (given that Germany is a big economy) there would be what... 20 times that amount of gold available to back a gold currency - so about $1trn. I think that the world economy is about $80trn which leaves a big problem with the assertion that a gold backed currency could challenge the $.
Gold is valued at only $41k per kilo because central banks managed to convince us that we don't need it to back up our currency.
If China really created gold-backed currency then gold price would skyrocket, increasing at lest 6 times (that's how much inflation we had since 1971, when the gold standard was abandoned)
China is about the last nation that is going to attempt to create a gold-backed currency.
They've accumulated an extraordinary amount of debt in a very short amount of time. Easily the greatest debt boom in world history. $40 to $50 trillion in new debt in about 13 years. Their combined debt to GDP ratio is now among the worst; counting the low estimates on shadow banking, it is the worst.
China needs to be able to abuse its currency going forward, for the exact same reason Japan is down to devaluing the Yen to keep the budget lights on. Low debt nations don't need to debase their currencies for such reasons - China will never be a low debt nation again (at least not this century); high debt nations get strangled to death by affixing their currencies to eg gold.
> because central banks managed to convince us that we don't need it to back up our currency.
No, it's because we switched to much more productive things to back up our currency. Our currency is backed by the willingness of our citizens to work and the value of the land and other possessions.
The currency is stabilized by not printing more than what there is to back it up, nor less.
Gold is a terrible thing to use because you can't create more of it as the economy grows.
Don't think fiat money is not backed by something - it most definitely is.
1300 tonnes of gold is therefore worth a bit more than $51bn, which is a lot, but approximately 1 year of the UK's defence budget, so in the scale of things not really all that much.
Now, this would mean that (given that Germany is a big economy) there would be what... 20 times that amount of gold available to back a gold currency - so about $1trn. I think that the world economy is about $80trn which leaves a big problem with the assertion that a gold backed currency could challenge the $.