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Monday, March 30, 2009

Russia Backs Return To Gold Standard

Russia, on the cusp of the G20 Summit, is backing a return to the gold standard. Fer realsies! We would be more inclined to take this idea seriously, of course, if there wasn't so much self-interest involved. Russia is one of the largest gold producers on the planet. The naked ambitions of Russia would be more amusing and less disgusting if they didn't involve so many testosteronal oligarchic thugs (Exaggerated cough suggesting feigned detachment). From The Telegraph:

"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."

Under the discipline of gold, to be sure (Averted Gaze). There appears to be a perverse race to the bottom among America's frenemies -- last week China proposed a global supercurrency, an alternative to the U.S. Dollar as default foreign reserve currency. And this week: this. What's next? Iran and Venezuela arguing for oil to anchor world finance?

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