this will be good for gold and gold stocks, BAA, NUGT, GDX “Global FX reserve accumulation has for some time been declining in dollar terms and our expectation is the China will have to engage further intervention to defend the CNY, thus running down some of it FX reserves,” she wrote in a note to clients. “The interesting test, however, will come further down the road when one day the dollar again comes under downward pressure. If China continues on the path to a free floating currency, at that time the CNY would be allowed to appreciate against the dollar and as such, China should not step in to ramp up U.S. Treasury purchases. That will indeed spend the end of the Greenspan conundrum.” this should be good for stocks Colas says the trillions of dollars of bonds the Fed has accumulated on its balance sheet gives it the option of selling bonds if it wants to push longer-term rates higher — and it might, seeing how that would make it more profitable for banks to make loans. “Capital would likely flow out of bonds and into equities and capital investment — good for growth as well,” he said. this is one of the reasons why China wants to become a reserve currency, and will be good for gold for they will use their gold to back it. Well, the theory went, because foreigners, notably China, would recycle the vast foreign-currency reserves they had accumulated into U.S. government debt, so as to keep their domestic currency weak. http://www.marketwatch.com/story/why-china-currency-moves-may-spell-end-of-greenspan-conundrum-2015-08-17?siteid=yhoof2