Monday, March 30, 2009

Not all governments are as foolish as ours

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".

Posted by drewster @ 03:21 AM (964 views)
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4 thoughts on “Not all governments are as foolish as ours

  • Gold as money…how antediluvian…err, I mean avante garde…err, I mean radical.

    We certainly need something that is more difficult to “cheat” than paper/electrons…but that is probably why, if the west has anything to do with it, gold will not appear in any basket.

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  • d’oh

    Don’t think the west have much choice in the matter.

    The east has the largest holding of dollars, which is probably the economic version of ‘someone having hold of you by the nuts with a pair of pliers’

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  • I’m more interested in what China has to say about this than Russia. Although Russia has a reasonable point about the weakness of the dollar, this is probably driven more by mischievous sentiments than serious economics. Russia has seen an American weakness and will doubtless keep needling at that weakness.

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