Posted on 06/17/2009 1:14:21 PM PDT by freedommom
Russia is proposing the inclusion of the ruble, yuan and gold as a part of a revised basket of currencies to form the valuation of the IMF’s special drawing rights seen as the coming new alternative global reserve currency, reported AP.
At a summit meeting yesterday, Russia and China challenged the reserve currency status of the dollar with two initiatives, while at the same time professing their support for the greenback in which both countries have huge bond holdings.
Gold for SDRs China is to extend a $10 billion loan to a regional group that comprises Russia and four central Asian states, presumably money that would previously have bought US bonds. And Russian president Dmitry Medvedev called for the strengthening of the international monetary system ‘not only by making the dollar strong, but also by creating other reserve currencies’.
Senior Kremlin officials told a briefing that Russia may invest in bonds issued by Brazil, China and Russia, and that they want the ruble, yuan and gold to be part of a revised basket of currencies to form the valuation of the IMF’s SDRs.
Officials said that this process ‘can’t happen fast’ and that currency shocks were ‘not wanted now’ and that ‘no one wants to bring the dollar down’.
However, it is of course the imminence of the soaring US budget deficit that will likely boost inflation that has heightened worries among US bond holders about the value of the greenback, and stimulated the search for an alternative. Gold price low That gold should be included in SDRs is a new proposal, and likely to be seen among Arabs and investors around the world as a further reason to buy gold at present prices.
All the studies into the monetization of gold have concluded that the value of the precious metal would soar under such a scenario because of its relatively tight supply. It would therefore seem logical for anybody planning to buy a few ounces or 100 tons of the precious metal to buy before prices start to really escalate.
For gold it would seem the only way for prices is up as it becomes part of the world’s fight back against inflation and devaluation of the US dollar.
‘bout time.
Wow, we are not only watching the dismantaling of the American system, but we’re urging it along.
Yet the idiot in chief has just asked for 100 billion for the IMF.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.