Russia backs return to Gold Standard to solve financial crisis

Russia backs return to Gold Standard to solve financial crisis

www.teleg raph.co.uk

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.

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I'm not by any means the biggest gold bug, but I do take notice when I see such things. More importantly is the talk of a new reserve currency consisting of a basket of National currencies and now it seems basket of commodities as well.

It's looking like the dollars days as the worlds reserve currency are coming to an end. It was unsustainable anyway.

This whole new currency thing is intriguing and frightening at the same time, and seems to be gaining wings. It seems like until recently the only people who really believed a new currency could take form were Evangelicals with an End Times fetish and CTers talking about a banking elite and a New World Order.

www.teleg raph.co.uk
(visit the link for the full news article)

I can't say I disagree with them. Amercian dollars used to be backed by silver certificates and gold dollars. Now all currency is paperless money, Nothing to back it's value up.

Originally posted by Blanca Rose
I can't say I disagree with them. Amercian dollars used to be backed by silver certificates and gold dollars. Now all currency is paperless money, Nothing to back it's value up.

Until someone manages to achieve the "Alchemists dream" I think a precious metal should be used as a financial standard for all currencies.

... but I don't agree with a world currency. If the economies of all nations are linked, then all it takes is one nations screw-up to drag us all into their problems.

I'd much prefer it if future wars fought with future enemies didn't allow them to survive off a strong currency because we're keeping it strong. Wouldn't that be a head game.
No matter what you'd do, by contributing to your economy, you'd also be assisting everyone elses economy, even those who want to take your nation down.


I can't see a world economy being safe, nor sane.

Neither gold nor paper has intrinsic value. There is no such thing. Intrinsic value is a value self-relevant concept in itself. Why should nations have to compete over who has the most gold or precious metals? I don't think that's fair. An official declaration regarding the authority of some arbitrary currency allows the entire nation to generate wealth through simpler things, such as the use of its land, labor, ideas and other resources. Productivity is only measurable form of real wealth.

Easily printable currencies allow the economy to match the growth of productivity. The only reason it's fiat is that people aren't psychologically predisposed to thinking that money is shiny and pretty, whereas gold or diamonds, for example, instantly evoke a strong emotional response. People fail to understand that we aren't trading paper; we're trading productivity. It might seem intangible at first, but by trading paper we're actually physically moving around tonnes of material goods. The rapid growth of our population as a species over the past century has made it absolutely vital that we develop some easily reproducible currency so that we can exchange goods in an equitable manner. It's easy to see that we aren't naturally willing to accept paper as a unit of productivity so it falls on some governing body to force us into believing it.

I think currency as a tangible good is a barbaric idea. It only promotes selfishness. Easily reproducible fiat currencies are much more conducive to the egalitarian society we all strive for as a species.

[edit on 29-3-2009 by cognoscente]

Originally posted by cognoscente
Neither gold nor paper has intrinsic value. There is no such thing. Intrinsic value is a value self-relevant concept in itself. Why should nations have to compete over who has the most gold or precious metals? I don't think that's fair. An official declaration regarding the authority of some arbitrary currency allows the entire nation to generate wealth through simpler things, such as the use of its land, labor, ideas and other resources. Productivity is only measurable form of real wealth.

Easily printable currencies allow the economy to match the growth of productivity. The only reason it's fiat is that people aren't psychologically predisposed to thinking that money is shiny and pretty, whereas gold or diamonds, for example, instantly evoke a strong emotional response. People fail to understand that we aren't trading paper; we're trading productivity. It might seem intangible at first, but by trading paper we're actually physically moving around tonnes of material goods. The rapid growth of our population as a species over the past century has made it absolutely vital that we develop some easily reproducible currency so that we can exchange goods in an equitable manner. It's easy to see that we aren't naturally willing to accept paper as a unit of productivity so it falls on some governing body to force us into believing it.

I think currency as a tangible good is a barbaric idea. It only promotes selfishness. Easily reproducible fiat currencies are much more conducive to the egalitarian society we all strive for as a species.

[edit on 29-3-2009 by cognoscente]

I wish I had the time right now to point out just how skewed your logic is, no offence meant.

Hopefully later I can post in response properly.

Originally posted by cognoscente
Neither gold nor paper has intrinsic value. There is no such thing. Intrinsic value is a value self-relevant concept in itself. Why should nations have to compete over who has the most gold or precious metals? I don't think that's fair. An official declaration regarding the authority of some arbitrary currency allows the entire nation to generate wealth through simpler things, such as the use of its land, labor, ideas and other resources. Productivity is only measurable form of real wealth.

That is entirely the point of currency, though. If you used a barter system (bartering food for food) at some point, you're going to have to consume what you are using to trade. The whole point of a currency system is that what people are trading has no practical value other than people accepting it for goods and services.

So, fairness? There is very little fair about banks being able to produce a fiat currency that is valued only by the currency in circulation at the time. This is a way of taking money off of you, for every dollar they print for free, reduces the value of the dollar in your pocket by whatever percentage of the gross dollar circulation that is (of course, this is a tiny percentage, but when they print a trillion of them, suddenly its not so tiny...)

A gold standard is a way of reining in the banks so they cannot just print money ad infinitum, it is a way of limiting what they can fabricate from thin air. It could be the cheeseburger standard if you like, but the point is there has to be something solid and tangible to base the money they are printing on (as in, the way the Templars originally had the system). Without it, the whole system is just begging to be abused and debased.

Originally posted by cognoscenteEasily printable currencies allow the economy to match the growth of productivity. The only reason it's fiat is that people aren't psychologically predisposed to thinking that money is shiny and pretty, whereas gold or diamonds, for example, instantly evoke a strong emotional response. People fail to understand that we aren't trading paper; we're trading productivity.

Yes, but do you feel in the last year that the world's productivity has increased proportionally to the new currency that has been created by the bail-outs? Of course not. This is just money from nothing, for nothing. Utterly ridiculous. There needs to be limits, and gold is a good limiter because it isn't available in effectively unlimited amounts.

Originally posted by cognoscenteIt might seem intangible at first, but by trading paper we're actually physically moving around tonnes of material goods. The rapid growth of our population as a species over the past century has made it absolutely vital that we develop some easily reproducible currency so that we can exchange goods in an equitable manner. It's easy to see that we aren't naturally willing to accept paper as a unit of productivity so it falls on some governing body to force us into believing it.

People have been using paper currency since the thirteenth century, I think by now they have gotten used to it.

Originally posted by cognoscenteI think currency as a tangible good is a barbaric idea. It only promotes selfishness. Easily reproducible fiat currencies are much more conducive to the egalitarian society we all strive for as a species.
[edit on 29-3-2009 by cognoscente]

Currency is still only a method of exchanging goods, but you wouldn't believe it with China's "dollar reserves" etc. Gold will still only have a value for exchanging goods (aside from jewellery) as you can't eat it, build with it or do anything actually useful with it.

I can't understand how you seem to think a fiat currency is okay. You honestly think having no limits on what money banks can produce, and therefore lend, to make a profit on? They are literally making a profit out of money produced from nothing. How is that acceptable?

And selfishness? Altruism has no place in a capitalist society, I'm afraid. Please don't talk about selfishness.

I have an inkling Gold is going to be money again.

Originally posted by The Last Man on Earth
That is entirely the point of currency, though. If you used a barter system (bartering food for food) at some point, you're going to have to consume what you are using to trade. The whole point of a currency system is that what people are trading has no practical value other than people accepting it for goods and services.

All I can say is that with a population of 300,000,000 there's a point where practicality is inefficient. I can see where people are increasingly becoming detached from currency as a tangible good. What else can we do? You could implement thousands of local currencies based on an index of local goods and then somehow connect that to a national currency so people can trade over long distances, but that just gets incredibly complicated.

Originally posted by The Last Man on Earth
So, fairness? There is very little fair about banks being able to produce a fiat currency that is valued only by the currency in circulation at the time. This is a way of taking money off of you, for every dollar they print for free, reduces the value of the dollar in your pocket by whatever percentage of the gross dollar circulation that is (of course, this is a tiny percentage, but when they print a trillion of them, suddenly its not so tiny...)

Usually money is printed a level conducive to per capita GDP growth. The only problem is when money is printed for war, repaying loans and other deficit spending, such as recent stimulus bills.

On the other hand that's why we have banks. Collect interest my friend. Though, I do see where that idea is slightly unfair. From a personal freedom point of view you shouldn't have to depend on some corporation just to maintain the safety of your hard earned money.

Originally posted by The Last Man on Earth
A gold standard is a way of reining in the banks so they cannot just print money ad infinitum, it is a way of limiting what they can fabricate from thin air. It could be the cheeseburger standard if you like, but the point is there has to be something solid and tangible to base the money they are printing on (as in, the way the Templars originally had the system). Without it, the whole system is just begging to be abused and debased.

Why not just follow the Constitution then? The point of Congress being the only entity allowed to print money was that all the representatives would have to come to a consensus through vote (therefore representing the country democratically) on all issues of spending. You could phone in to your rep and tell him why Congress shouldn't go through with printing or not.

Now that the country's printing capabilities are left to a private corporation abuse is only natural. I think a fiat currency is more egalitarian on a individual consumer level, however the way it is being printed is the only problem here. Restore full power back to the Congress so that printing can only be voted in. A return to a gold standard isn't necessary.

[edit on 30-3-2009 by cognoscente]

Of cource they do. Unless Im mistaken the Soviets have huge reserves of gold. Doing this would drive those prices up up up and up.

Putting money back on the gold standard would in effect severly cripple the economy by eliminating the amount of avalible money.

[edit on 3/30/09 by FredT]