Posted on 03/31/2009 5:37:36 AM PDT by Travis McGee
Russia backs return to Gold Standard to solve financial crisis 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. Mr Dvorkevich said it was "logical" that the new currency should include the rouble and the yuan, adding that "we could also think about more effective use of gold in this system". The Gold Standard was the anchor of world finance in the 19th Century but began breaking down during the First World War as governments engaged in unprecedented spending.
(Excerpt) Read more at telegraph.co.uk ...
Tick tock...
Ya only got about 12 seconds before the “Ya can’t eat gold” toadstool crowd shows up...
How can this solve the problem whenLord Obama says devaluing currency (stimulating) is the solution?
“Some are saying this may be the most important financial conference since Bretton Woods in 1944.”
And we are represented by a doe-eyed, socialist neophyte.
What could go wrong?
He who has the gold makes the rules.
A gold standard is the ultimate “mark to market”.
From what I’m hearing the large financial institutions are fighting “mark to market” because it means that if, OK, when, they get the next bailout, then that would REDUCE the amount. With inflated prices comes inflated bailouts.
They are hoping to fix their negative balance sheets by keeping on paper valuations high - thus making the Fed pay for their speculations over the years.
I’m also hearing that there are buyers lining up to take the stuff - if they actually sell it at market rates. But the big boyz is refusing to do that, they know Uncle Sam will pay them more...
I just locked into 8 british sovereigns at usagold. I wanted krugerrands but didn’t want to buy 5 of them today and the sovereigns can’t be seized under current law. I should get more probably.
If I remember correctly, Russia has the largest reserves of mineable gold.
If true, they could easily control price.
I know gold has value, but at some point will people come to the realization that it’s just metal?
What could go wrong?”
Good point. What will he do without a teleprompter?
and money is just paper. Would you prefer to carry livestock and other barterable items in your pockets?
This is a good time to ‘’re-value’’ the dollar one for 10 for example. A one dollar item would cost 10 new cents, gold and
silver and copper, also nickel could be used in coinage too.
And money is just paper and diamonds are just carbon...but the rarity and what they represent (wealth and power) keep the value high.
In the real world it's useful because the demand for such high value items perpetuates itself, but throw someone on a desert island and give them a choice between 100 bars of gold or a bowl of oatmeal, and they'll choose the oatmeal.
So to answer your question, no, gold won't become worthless due to falling demand. The only thing that could do so is if alchemists cheaply and artificially create gold in labs.
I wish I’d paid a little more attention in Economics class, but I can’t help disliking fiat money.
If I remember correctly, Russia has the largest reserves of mineable gold.
If true, they could easily control price
I think it’s one of those “the emperor has no clothes” kind of things. While I agree that, as it stands gold is a hedge against inflation, it is only because of it “perceived” value.
I’ll put my money into tools and raw materials. Things that can really keep me alive if things go badly. I would imagine I’ll be able to gather quite a bit of gold from folks that need real stuff to survive. I also respect those that buy gold at this stage and wish them well.
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