Ore Rich Russia Calls for Return to Gold Standard, as G20 Talks Begin

March 31, 2009

(ChattahBox)– Arkady Dvorkevich, Russia’s chief economic adviser, called for a return to the gold standard to anchor the global financial system. This comes as the G20 Summit begins this week, a meeting between the world’s leading economies to discuss financial matters and the current economic crisis sweeping across the globe. Dvorkevich said Russia favors the inclusion of gold bullion in the basket-weighting of Special Drawing Rights, reserve currency issued by the International Monetary Fund.

Russia of course, has unlimited ore deposits and is a major gold producer. China has intimated recently of replacing the current U.S. dollar backed reserve currency with an international Special Drawing Rights currency.

The Russians and the Chinese are expected to band together during the G20 Summit to push for a change in the current backing of reserve funds. China is also proposing a system based on currency from 30 commodities. Dvorkevich says such a new currency should include the rouble and the yuan, as well as the U.S. dollar.

The gold standard to back paper currency, has not been used since 1971, when it was abolished by then, President Nixon, during a time of high inflationary spending.

A change in backing for reserve currency from the current U.S. dollar to another currency or combination of currencies is going to be a major topic of discussion in the G20 talks this week. It’s not expected that the participating world leaders will agree to such a drastic change to the current Special Drawing Rights system.

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