amateur hour on x. everyone wishing for fairy tales. back the rmb with gold, problem solved? are you fucking me? here's the elephant in the python. at today's exchange rate china's broad money supply, M4, the cash sitting in its banks, is about $45 trillion. america's is just over $18 trillion. a property bubble and a printing press did that. the commies carpeted the place in red cabbage, farts and all. talk about turning japanese. on any honest reading of the monstrous extravagance of what went down, ghost towns, empty towers, loans that'll never be repaid, the currency should be nearer 15 to the dollar, not 7. the banks are zombies. they can't admit the losses, so they roll the bad debt and pray. every saver in china can smell it. that's why they want out. now make all $45 trillion of M4 convertible into gold at a fixed price. you haven't backed the currency. you've handed a billion people the exit, and lit the fuse. gold goes parabolic. beijing becomes the laughing stock, then loses its reserves, then the peg. that isn't a plan. it's hysteria wearing a gold chain. thank fuck there's a grown-up with balls and a synchronised brain to keep you fucking morons away from your screens and your fantasy economics.

a billion chinese piling into gold to escape the rmb? pure fucking fantasy. the world mines about 3.7k tonnes a year. in a strong year china already takes roughly 35% of it. let households loose and they'd swallow years of global supply in months. gold goes ballistic. and beijing swaps one nightmare for its mirror image. here's the bit you're all missing. china sells the world a trillion more than it buys. those dollars have to go somewhere, or their currency explodes higher. if they weren't gdp-targeting commies, you might need 4 red cabbage to buy a dollar, not near 7. the state confiscates and largely sells those dollars, carefully, in a very controlled manner. like a state magician: once you saw it, now you don't. rmb strength. now flip it. let a billion savers dump rmb for gold and the money floods out. nothing careful, nothing controlled. just unrestrained, private, "i'm a chinaman, get me out of here" vibes. the rmb slumps. now china has two choices: burn its reserves defending the currency, or watch it slide nearer 15 to the dollar, at which level china's M4 would revalue in $ terms closer to its american level. that's why the chinese slam the door and insist on capital controls. to stop the households. to deny them their get out of jail card. to dream of china buying gold in a frenzy is a hallucination. gold road vaults change nothing. plumbing for institutions, not an exit for the masses. you all think i'm wasted. not true. i see reality, not what my prejudice, my axe, nor my book wants to see.

Brent Johnson of @SantiagoAuFund and John Butler (The Amphora Report) agree on more than you’d expect, and still end up on opposite sides of the trade. One macro question a week, argued to the end. No winner declared. You watch and decide where your money stands. This is TransAtlantic TakeAway. Start here.

Wise words from my pal @gave_vincent: "Unfortunately, France today is confronting a social crisis, an immigration crisis, an energy crisis, an economic crisis and a fiscal crisis. All this at a time when the French president is in office, but not in power. Still, however one cuts it, the images of burning town halls, looted stores, and youths throwing stones at the police will do little to improve the already battered image of France on global financial markets. Nothing that occurred this weekend seems to point the way towards a higher euro, or lower French bond yields."