Russia Backs Return to Gold Standard

It’s sort of a modified, limited hang-out, but Russia is promoting at least a partial return to the gold standard for international currencies.

“Arkady Dvorkevich, the Kremlin’s chief economic adviser, said Russia would favour the inclusion of gold bullion in the basket-weighting of a new world currency based on Special Drawing Rights issued by the International Monetary Fund.

Chinese and Russian leaders both plan to open debate on an SDR-based reserve currency as an alternative to the US dollar at the G20 summit in London this week, although the world may not yet be ready for such a radical proposal.”

Too funny: Having money backed by real value is “radical.” No, it isn’t, it’s moral… but you can be sure the Russians and Chinese are not proposing this for positive moral ends, rather they have designs on taking advantage of the US mountain of debt that Obi-One has buried us under to weaken us economically. Still, I’m glad they brought this up, because it will strike fear into a lot of arrogant hearts, or it ought to.

If some countries return to the gold standard, international financiers and financial institutions will flock to those currencies and the US dollar and other unbacked fiat currencies will plummet into worthlessness. If that doesn’t worry you, it should. The US, GB, Australia and other western nations are in no position to return to the gold standard: Too much money in circulation and nowhere near enough gold to hitch to it.

Still, at some point this is going to happen, even if it takes a total global financial meltdown to achieve it… and it just might.

The choices will come down to this…


…or this.


One Response to “Russia Backs Return to Gold Standard”

  1. bingbing Says:

    Western nations have arguably gone too far when it comes to what’s in reserve versus what’s out in the market. This however goes back to the middle ages when banking systems were first introduced. We’ve known for centuries that paper money is fine so long as everybody doesn’t make a run on the banks (where the gold used to be) all at once. But perhaps, this system has been too reliant on confidence. Still, it was confidence, among other factors, which has improved so many lives so much. There’s always been a bullshit factor just the GFC proved the BS had piled too high. Money and value have only ever been ideas, though (i.e. gold is valuable but certainly not a necessity like warmth, food and shelter).

    Naturally, China and Russia will plug this return hard, partly for the right reasons but also of course, that they’d love to be the head chook in the pecking order which money and morals aside, the US probably won’t let happens and they have the guns to make sure of that.

    Seems like there will have to be more compromise, though, as arguably, it was America’s economy which facilitated it’s military – not the other way round.

    Chicken and the egg?

    It’d be great if an actual economist commented on this but let’s face it, if they were so much better…

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