Monday, March 30, 2009

Russia Calls for a Role for Gold in a New International Reserve Currency

It is only a matter of time before the dollar is replaced as the international reserve currency. Quite simply, the credit of the United States of America is being downgraded by market forces. Too many understand, including Russian and Chinese leaders, that the only way the U.S. governmant will be able to pay its debts is by printing even more money. The dollar and dollar based debt are going to have extremely tough sledding.

The latest development out of Moscow is a call for a return to a role for gold in the international monetary system.

Ambrose Evans-Pritchard reports that Arkady Dvorkevich, Russia's top economist, is calling for gold to be part of a currency basket that would be part of a revised Special Drawing Right (SDR) issued by the International Monetary Fund that would become the world's reserve currency.

Dvorkevich said he also sees a role for Russia's ruble and China's yuan as part of in the SDR currency basket.

The best the U.S. can do at this point is attempt to influence some role for the dollar in any currency basket.

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