Russia backs return to Gold Standard to solve financial crisis

March 31, 2009 by · Leave a Comment
Filed under: Global News 

Personally I think all this talk about going back to the Gold Standard really points to the underlying problem that we have seen over and over throughout financial history.   Having an honest management of the currency with a policy that does debase it over time which harms the savers in your country which kill incentive to save and invest over time.   We tend to ignore the savers and focus on the people in trouble without any thought of balance when addressing these issues.  

The current crisis in the U.S. is a perfect example when the popular notion of bailing everyone out is being carried out without real discussion being put into what that means and if there is a better method of handling the crisis.  If you have followed my writing on here, you would know that I would of let all the banks go under that were reckless and used the money to back up obligations they had (the honest and correct ones) and then went on a robust programs to get funding to private businesses to jump start the job creation process focusing on our infrastructure and energy needs, you can almost never have enough of either.

News (Telegraph 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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China calls for new global currency to replace dollar

March 24, 2009 by · Leave a Comment
Filed under: Currency News 

The calls for a replacement to the dollar is getting more pronounced everyday.  China has really pushed for the IMF to use SDRs (Special Drawings Rights) as the super-sovereign currency used between governements.  I am not in favor of giving any international agency this type of power.  When you concentrate power, it makes it much easier to abuse.  

I understand why the call for these changes are coming, being that we are the de facto reserve currency, our domestic monetary polices are devaluing the dollar.  We should not look to bailout and look more to preserve our currency on the world market and let the market take care of the mal-investment.

News (AP):

China is calling for a new global currency controlled by the International Monetary Fund, stepping up pressure ahead of a London summit of global leaders for changes to a financial system dominated by the U.S. dollar and Western governments.

The comments, in an essay by the Chinese central bank governor released late Monday, reflect Beijing’s growing assertiveness in economic affairs. China is expected to press for developing countries to have a bigger say in finance when leaders of the Group of 20 major economies meet April 2 in London to discuss the global crisis.

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IMF poised to print billions of dollars in ‘global quantitative easing’

March 18, 2009 by · Leave a Comment
Filed under: Currency News 

This is a interesting article, what I want to know is how the IMF is getting the ability to issue currency like a central bank?  As stated in the article, they will be issuing SDR’s (Special Drawing Rights).  Here is a fun quote: “The principle behind it is that everyone would get bonus dollars and instead of the Federal Reserve having to print them, everyone gets them.” and to take the cake “The objective is to create a windfall of cash. However if everybody goes out and spends the money it could be very inflationary.”  No need to be worried about secret plans via the “Shadow Banking System” when they are all being publicly displayed.

News:

The International Monetary Fund is poised to embark on what analysts have described as “global quantitative easing” by printing billions of dollars worth of a global “super-currency” in an unprecedented new effort to address the economic crisis.

Alistair Darling and senior figures in the US Treasury have been encouraging the Fund to issue hundreds of billions of dollars worth of so-called Special Drawing Rights in the coming months as part of its campaign to prevent the recession from turning into a global depression.

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