Posted on 03/30/2009 12:58:42 PM PDT by mnehring
Russia has become the first major country to call for a partial restoration of the Gold Standard to uphold discipline in the world financial system.
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.
(Excerpt) Read more at telegraph.co.uk ...
I’m under the impression that a great deal of the world’s gold and silver is in India. It is traditional to give gifts of precious metals for Hindu weddings and the Indians tend to hang onto their gold rather than sell it.
No matter whom is in possession of the resource, moving to a standard where you are dependent on that resource means that you are in a position to be held economically hostage by those who hold the resource (see Oil situation).. It is one of those reasons why I have never jumped on the Gold Standard bandwagon.. It would be a good alternative IF we first make ourselves more independent in our supply of the resource.
Of the two, which has actually lived under this system...Experience vs Academia...hmmm...
The only thing worse than saying who when you mean whom is saying whom when you mean who. :)
Bretton Woods ended in disaster. There wasn't enough gold to redeem all the dollars at the gold window at the stated conversion rate. What matters is good monetary management. Backing money with gold, or silver, or whatever doesn't guaranty good monetary management, but it does add inefficiency, and a false sense of security.
This way the currency is based on production, not debt, and the currency value isn't used as a way to socially engineer the economy. It is a harder currency. I've always been under the opinion a single commodity backed currency would only work in a closed system.
Yes and they can mine it cheaply without the EPA Handcuffs we are at a disadvantage.
Who said that there would be a hue and cry among nations to return to the gold standard?
Bert!
How much gold is in Fort Knox and who owns it?
Sunday, March 29, 2009 2:56:20 PM · 44 of 101
bert to bvw
In short order, I think there will be countries who revert to the gold standard to escape the horror and anxiety of a floating currency. there will be a return to the tried and true historical basis for wealth.
I’m not sold on either a domestic or international gold standard, but I do have an important quibble with your statement...
Bretton Woods ended in disaster because the US wanted to inflate. The combination of Vietnam and Great Society spending in the 1960s cost the US lots of gold. Nixon did not want to face the music, so he postponed the pain by the combination of canceling gold convertability and setting up a system where ongoing US trade deficits would allow the unbacked dollar to become the new international reserve. At that point, we were (relatively) free(er) to pursue the inflation of the 1970s.
The problem is that it is not a perpetually sustainable system. Eventual change is required, and crises tend to bring on those changes.
***Russia has plenty of gold mines?? I’m just saying ...***
Russia has plenty of gold. All that Aztec and Inca gold, sent to Russia by Spain in the Spanish Civil War, disappeared when Franco took over Spain.
I think gold mining used to be one of the major occupations in the Gulag. As Putin moves Russia back toward totalitarianism, maybe they will have cheap labor again to run those Siberian mines.
>Backing money with gold, or silver, or whatever doesn’t guaranty good monetary management, but it does add inefficiency, and a false sense of security.<
I don’t know how much more inefficient it might or might not be, but I have wondered about it bringing a false sense of security.
I have to agree with you on good monetary management. Without that, no standard will work.
As inflation becomes perceived as a serious problem, a growing demand for gold and silver develops as an "inflation hedge"-i.e., as a store of value. Once this demand reaches a certain level, the stage becomes set for a spontaneous remonetization of the precious metals.
China and Russia combined control about 25% of the world's gold production.
Would this not ultimately be a good thing, even if short term, our dollar goes nutty?
it all went downhill after the income tax
ROFL
LOL!
Yeah, I guess it did.
Ping
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