Russia backs return to Gold Standard to solve financial crisis

[gulfcoastliberal]

Source: Telegraph

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.

snip to end

China's government has floated a variant of this idea, suggesting a currency based on 30 commodities along the lines of the "Bancor" proposed by John Maynard Keynes in 1944.

Read more: http://www.telegraph.co.uk/finance/financetopics/g20-summit/5072484/Russia-backs-return-to-Gold-Standard-to-solve-financial-crisis.html

[madrchsod]

1. ya right....how about bags of salt

[Blue_Tires]

2. finally, a new country for Ron Paul

[DJ13]

3. There isnt enough gold in the world to back the economy of the world

That idea is just stupid.

[Tempest]

5. They're only talking about a partial return

The balance will be made up a basket of currencies.

Considering how bad things are, and how long they will continue if the dollar is kept the standard, change is coming whether we like it or not.

[Zynx]

11. The dollar being the reserve currency has very little to do with the current crisis.

[Tempest]

13. It certainly does

Because the dollar is trading much lower than other currencies, it's costing more for foriegn governments to hold it or use it for trade between other countries.


That's why China and Argentina just conducted a currency swap between each other for contingency use. If the dollar drops much more, they can dismiss the dollar and do trade deals without it.

[justaregularperson]

16. Why does everyone keep saying the dollar is low? It has moved up for months?

http://www.kitco.com/gold_currency/charts.htm?USD

[Tempest]

23. Let us know when it gets back up to 2001 levels

It's still trading low compared to 8 years ago.

[scisyhp1]

19. It has everything to do with the current crisis.

Foreign (Chinese, Japanese, Arab, Russian) US currency reserves were the main source of cheap
credit which caused this whole mess. This ability to cheaply finance enormous deficits made US
policymakers believe that "deficit doesn't matter" and add to the problem by loosening domestic
monetary and fiscal policies. Not only that, economic policies were also skewed from supporting
industrial development to non-productive (but GDP generating) financial services sector. Why
sweat and make anything, if we can just print our money (which everybody needs, with it being the
medium of global trade) and buy stuff? We can even use this newly printed cash several times
over, making ourselves a global financial supermarket and collecting more fees for circulating
those funds around the world. To be sure, it is, in principle, conceivable that some government
could manage a global reserve currency and be responsible enough not to abuse that privilege
too much by debasing it so shamelessly. But US Government? Only in some parallel Universe.
It can't even be trusted to honestly tell where its own taxpayers' money is going. Any viable
long-term solution to this crisis must include some multi-lateral way of setting and enforcing
global monetary policies.

[tama]

8. Don't you mean

to back the growth-paradigm by money as debt?

Not that I support any form of money - I'd prefer a gift economy: http://en.wikipedia.org/wiki/Gift_economy

[dbonds]

4. Its a good idea, don't know if its too late to be practical though.

[Raskolnik]

6. Economic advice from Russia?

Perhaps next they'll offer some tips on reducing alcoholism.

[Sultana]

17. Lol, no you didn't

:o


eh, true :evilgrin:

[Blackhatjack]

7. Russia has huge stockpiles of gold... so they stand to benefit in a time of low oil prices

Without going into details, it has been explained that the greatest risk to Russia is low oil prices because the cost to extract and transport their oil is higher than other countries due to infrastructure deficiencies. As long as the price of oil remained high, Russia would be flush with cash due to its massive reserves.

However, as the price of oil goes down the net profit drops and the government could be in trouble.

Russia does have large stockpiles of gold, which it control as to how much becomes available on the world market. If we went to a SDR currency backed by gold, Russia would be in a very good position to profit from it.

[paparush]

9. Russian Advice: Stay the Hell out of Afghanistan. Really.

USA: We're Number One! We're Number One! We're....broke.

[Zynx]

10. Because we all know financial crises never existed when we were on the gold standard...

oh wait. That's definitely not true.

[bluesmail]

12. Now that Wall Street Russian mafias aren't making a killing...

try the gold standard. :7

[Deja Q]

14. Didn't their friend Nixon remove the US from the gold standard?

[Odin2005]

15. Gold Standard = Deflation = BAD

People wanting to "crucify mankind upon a cross of gold" can go **** themselves.

[lonestarnot]

18. = Stupid, therefore bad and stupid.

:D

[Odin2005]

20. BINGO! You win!

:-)

[dipsydoodle]

21. We're any women involved in this conversation ?

Women ,know your limits :

http://www.youtube.com/watch?v=LS37SNYjg8w :rofl:

[DavidDvorkin]

22. China recently passed South Africa to become the world's largest gold producer

So China would benefit from this. It would be good for South Africa, too, of course.