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Comment by koolhead17 | Hacker News Reader

9 pointskoolhead174 comments

Both Glazyev and Pozsar know better than anyone that when Bretton Woods was created the US possessed most of Central Bank gold and controlled half the world’s GDP. This was the basis for the US to take over the whole global financial system.

Now vast swathes of the non-western world are paying close attention to Glazyev and the drive towards a new non-US dollar currency, complete with a new gold standard which would in time totally replace the US dollar.

'Goldbugs' are the flat earthers of economics. Whatever floats your boat though.

I think these headlines always overstate the ambition and impact of new currencies and new currency agreements. The USD will not be replaced by any non-US currency , but its market share of transactions will decrease relatively as other countries hedge against the risk of future weaponisation of the dollar against them or their trading partner. This is the inevitable consequence of using the dollar as an instrument of foreign policy, rather than an neutral medium of exchange

What I Learned This Week had an interesting paper a few months ago about this. It seems inevitable that freezing other countries’ assets will prompt them to create alternatives.

  Glazyev then lays down the road toward Gold Ruble 3.0. The first gold standard was lobbied by the Rothschilds in the 19th century, which “gave them the opportunity to subordinate continental Europe to the British financial system through gold loans.” Golden Ruble 1.0, writes Glazyev, “provided the process of capitalist accumulation.”

  Golden Ruble 2.0, after Bretton Woods, “ensured a rapid economic recovery after the war.” But then the “reformer Khrushchev canceled the peg of the ruble to gold, carrying out monetary reform in 1961 with the actual devaluation of the ruble by 2.5 times, forming conditions for the subsequent transformation of the country [Russia] into a “raw material appendage of the Western financial system.”

  What Glazyev proposes now is for Russia to boost gold mining to as much as 3 percent of GDP: the basis for fast growth of the entire commodity sector (30 percent of Russian GDP). With the country becoming a world leader in gold production, it gets “a strong ruble, a strong budget and a strong economy.”

LOL.

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