I think that the demand for gold will far outstrip the supply and the ruble will be devalued.
That’s great as long as you have the gold reserves to back it up. But with everyone agreeing that one ounce of gold is worth $1910, your reserves will be snapped up in minutes. I know that if I could purchase an ounce of gold for a Bennie, I would convert my IRA to gold in a minute.
So the lesson is if you are going to tie your currency to a commodity, be sure that 1) you have enough of the commodity to meet demand or your currency is going to be quickly devalued and b) tie your currency to the current rate to have any chance of it working.
Nixon had to shut the gold window in the 70’s precisely because countries actually starting demanding the gold. Same thing will hspoen here.
“Well you didn’t really think you could get gold just because we said it was backed by gold...”