China is moving fast!

China is stepping up plans to replace the dollar with a gold-backed yuan. The Shanghai Gold Exchange is opening vaults abroad, and Shanghai futures access is opening up as well.

The laws of unintended consequences are alive and well: when President Trump tried to put China out of business with punitive tariffs, China immediately responded by accelerating tariff-free trade negotiations with Japan and South Korea. And President Xi then went on a whistlestop tour of the principal ASEAN nations. Shortly afterwards, the PBOC embarked on a policy of opening up gold and silver trading outside China with new vaults proposed in Hong Kong and Saudi Arabia.

What is this all leading to? And are there consequences for the dollar and the entire Western financial system?