Update-1: Rise of the Yuan: Mainstream media finally reports on the possibility of gold-backed internationalization

Is the world ready for a gold backed Yuan? With the state of the Federal Reserve's balance sheet and a USD devalued to shit one would certainly think so. It's been a long time in the making but finally the mainstream media (in the west) is catching on.

Does China plan to use gold to internationalize the Yuan?

Concerns about high debt and an overvalued currency are sucking gold imports into China, according to a new report from Lombard Street Research.

It adds that the authorities may possibly be moving in the direction of using gold in a plan to make the yuan an international currency.

Beijing has said that it does not view gold as a useful asset for diversifying the country's $3.8 trillion worth of foreign exchange reserves, according to media reports.

(Read more: China posts blowout trade data, exports jump 10.6%)

China's official reserves of gold stand at 1,054 metric tons, that's worth about $45 billion. This figure has not been updated since 2009 and Lombard says the number may not be accurate because since that last update imports of gold and domestic production amount to over 4,500 metric tons.

"The massive flow of gold into the country does make it seem plausible that they [China's authorities] could be moving in the direction of using gold in the effort to internationalize the currency and escape what is seen as a domineering dollar," Lombard economist Freya Beamish said in a note published late Wednesday.

(Read more: Yuan now one of the world's most tradable currencies)

In fact, latest official data shows that China imported and produced more gold last year than its consumers bought, fueling speculation that the authorities took last year's dive in the price of gold to build up holdings of the precious metal. Gold prices fell 28 percent last year.

"I wouldn't be surprised if import numbers hold up as there was some evidence that that Chinese were buying a lot of metals near their lows last year," Sean Darby, chief global equity strategist at Jefferies, told CNBC. He was referring to data on Wednesday that showed China's imports rose 10 percent in January, from the year-ago period, while exports jumped an annual 10.6 percent.

The yuan traded around 6.0657 per dollar early on Thursday. It has steadily been appreciating since it was unpegged from the greenback in 2005 and had strengthened about 25 percent since then.

In recent years, the yuan has gained ground as a global currency as Beijing eases its control of the yuan – also known as the renminbi – and opens up China's financial markets to foreign investors.

I've been saying this day would be coming, it's been a core aspect in my forecasts ever since oh I don't know, this one? I can not state how important this event is, and how stupid media "experts" are going to look as all of their old hat forecasts based on Canada's old relationship with the USD blow up in their faces. You heard it here first, folks.

Of course, it's not like China is going to just come out and announce it - opposing the USD is next to sin - but they do indicate it with "code language" in their media reports. We've been covering these reports for the last year on this blog.

Think you've seen "financial crisis"? Just wait, you ain't seen nothing yet.

Update-1

China Cuts Treasury Holdings Most Since 2011 Amid Taper

China, the largest foreign U.S. creditor, reduced holdings of U.S. Treasury debt in December by the most in two years as the Federal Reserve announced plans to slow asset purchases.

The nation pared its position in U.S. government bonds by $47.8 billion, or 3.6 percent, to $1.27 trillion, the largest decline since December 2011, according to U.S. Treasury Department data released yesterday. At the same time, international investors increased holdings by 1.4 percent, or by $78 billion, in December, pushing foreign holdings to a record $5.79 trillion.

Hmm.

China Daily: Replace dollar with super currency: economist

Hmm.

Nigeria Central Bank to Move More Currency Reserves in Yuan

See a growing trend here?

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for CenturyLink

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.