Posted on 02/08/2015 4:40:35 AM PST by alexmark1917
This is not the first time the gold standard has been seen as the ultimate cure for Russia’s economic problems. In September 1998, the noted economist Jude Wanninski predicted in a far-sighted essay for The Wall Street Journal that only a gold ruble would get the the country out of its then-debt crises. It was upon taking office about two years later, in May 2000, that President Putin embarked upon the country’s massive gold-buying campaign. At the time, it took twenty-eight barrels of crude just to buy an ounce of gold. The gold-backed ruble policy of those years was adopted to successfully pay down the country's external debt.
As a pro-gold stance is, essentially, anti-dollar, speculation about how the US would react raises the question of whether an all-out currency war would follow. The West would have to keep Russia regionally and militarily marginalized, not to mention kept within the confines of the Fed, the ECB, and the Bank of England (BOE).
Nor is that prospect too far-fetched. As Dutch author Willem Middelkoop has written in his 2014 book The Big Reset: War on Gold and the Financial Endgame,
A system reset is imminent. Even before 2020 the world's financial system will need to find a different anchor. ... In a desperate attempt to maintain this dollar system, the United States waged a secret war on gold since the 1960s. China and Russia have pierced through the American smokescreen around gold and the dollar and are no longer willing to continue lending to the United States. Both countries have been accumulating enormous amounts of gold, positioning themselves for the next phase of the global financial system.
http://mises.org/library/russia-planning-gold-based-currency
Why the dollar may not be all-powerful. It’s losing value 1972: Dollar removed from gold standard
http://goldsilver.com/news/the-decline-of-the-dollar/
Is China preparing for currency war - Bloomberg
China surprised investors by cutting reserve requirements 50 basis points to spur lending & combat deflation. But Beijing may be raring for an even bigger & more perilous fight - in the currency markets.
http://www.bloombergview.com/articles/2015-02-06/is-china-preparing-for-currency-war-?cmpid=yhoo
The Road to Global Monetary Debasement
It’s abundantly clear that cheap money is a cancer on the economy, that it destroys the value of money (in relation to asset prices, if not consumer prices) and that it simply doesn’t work.
New BOJ Board Member - “We Just Need To Print Money”
The Abe administration nominated a proponent of reflationary monetary policy to the central bank’s board, buttressing Governor Haruhiko Kuroda’s effort to end a two-decade slump in the world’s third-biggest economy.
What would happen to the price of gold should this actually come to pass?
"It could mean the threat of a severe inflation in the United States should rafts of unwanted dollars make their way back across the Atlantic — the Fed's ultimate nightmare."
That means that in dollars, the value of everything here would skyrocket, including gold.
I’m sure the the central banks of the US EU etc would do everything they could to manipulate the price down.
It’s abundantly clear that cheap money is a cancer on the economy, that it destroys the value of money (in relation to asset prices, if not consumer prices) and that it simply doesn’t work.
And it has been clear and known for Hundred’s of Years.
Collapse of fiat currencies. There is nowhere enough gold to match circulating currency.
Mises bump!
At $50,000/oz. There is more than enough gold to back currencies. Its all a matter of the conversion rate.
Correction: $50,000 s/b $500,000
When a cheap loaf of bread goes for $50, that’s a collapse.
Who's yer daddy, kiddies?
Agreed but it will always be wrong to suggest we can’t have a gold standard because there’s not enough gold; the exchange rate settles that issue.
But that would just mean a massive wealth transfer into pockets of gold owners and giving the ‘right to print money’ to China, Russia, South Africa and Australia.
Exactly, that’s the logic behind the goldv(and vsilver) bugs. Its whatvsells gold today. Own some. Own some silver. Don’t be crazy. Free advise guaranteed to be worth every penny you paid.
thanks for the interesting post
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