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Russia backs return to Gold Standard to solve financial crisis

Discussion in 'BlackHat Lounge' started by soctal, Apr 1, 2009.

  1. soctal

    soctal Regular Member

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    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.

    By Ambrose Evans-Pritchard
    Last Updated: 10:33AM BST 31 Mar 2009

    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. It collapsed in the 1930s when the British

    Empire, the US, and France all abandoned their parities.

    It was revived as part of fixed dollar system until US inflation caused by the

    Vietnam War and "Great Society" social spending forced President Richard

    Nixon to close the gold window in 1971.

    The world's fiat paper currencies have lacked any external anchor ever

    since. It is widely argued that the financial excesses and extreme debt

    leverage of the last quarter century would have been impossible - or less

    likely - under the discipline of gold.

    Russia is a major gold producer with large untapped reserves of ore so it

    has a clear interest in promoting the idea. The Kremlin has already

    instructed the central bank of gradually raise the gold share of foreign

    reserves to 10pc.

    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.



    http://www.telegraph.co.uk/finance/financetopics/g20-

    summit/5072484/Russia-backs-return-to-Gold-Standard-to-solve-financial-

    crisis.html
    http://***********/ezl2f
     
  2. DeadEyesOpened

    DeadEyesOpened Junior Member

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    Probably because Russia has most of the gold.
     
  3. leonidt

    leonidt Regular Member

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    Fuck yeah, we all think alike. :D I've been keeping my money in Canadian Maple Leafs for years. Gold FTW.
     
  4. toyo

    toyo BANNED BANNED

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    there would hardly been a real financial system without the fiat currency.

    Its like saying I would have still had a friend who died in a car crash if cars wasn't invented.

    Regardless of the system, people will still find ways to manipulate the system for their own benefit. And the gold system is not viable.

    China wants another currency because it has a shitload amount of US dollars, and China can't do much about it because if they sell, the dollar can collapse.
     
  5. undeterminederror

    undeterminederror BANNED BANNED

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    then i support "Gypsy" standard. we have a lot!
     
  6. soctal

    soctal Regular Member

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    one of the blogs i read often is speculating that if this happens, look for the us govt to seized gold bullion like they did in the last depression. what they use to do is have an agent assigned to each bank's safety deposit vault. when someone went to the bank to get something out of their box, they look in the vault and seize the precious metals and give you back the equilvalent in dollars.. , they are said to have left Numismatic coins (google it) alone, who knows they might take them this time, the bankers being on a total rampage they are these days.
    in short, if this happens, leaving your buillion in the bank box may not be safe and you will have to find another place.
     
  7. vegasvillan

    vegasvillan Regular Member

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    Credit will always rule