Former Federal Reserve Chairman, Alan Greenspan, believes the Peoples Republic of China want their official gold reserves to surpass that of the United States. The U.S. official gold reserves currently stand at 8,500 tonnes with an estimated value of $328 billion.

To achieve this target China would only need to convert a small percentage of their $4 trillion foreign exchange reserves. Greenspan’s aired his comments in a recent article entitled Golden Rule-Why Beijing is Buying.

He concludes a return to a gold standard is unlikely but warned fiat currencies may not be accepted as payment during a financial crisis. He highlighted that gold has unique properties and unlike fiat currencies is not backed by debt and the tax raising abilities of the state. Instead gold has a 2,000 year old history and has been an “unquestioned acceptance in payment.”

In the article he also suggests that Chinese economy will struggle to maintain current growth rates as the economy lacks the ability to innovate and is run by an authoritarian one party state.