Who'd 'a thunk it? I speculated a couple of months back that it would be in the interests of either Russia or China (or both) to adopt a gold-backed currency.
And Lo, it appears to be coming to pass.
Yes, I know, if you make enough predictions eventually some of them are bound to come true purely on the Black Swan premises of the barbell strategist, Nassim Taleb, but this move of the Kremlin to return to a gold currency, if it is a move, makes an awful lot of sense.
They are currently ringed by aggressive attack-formation US military bases. What better way to send these Americans home other than by exposing the worthlessness of the dollar by adopting a hard gold rouble? Ok, it may not be a pure Rothbardian 100% reserve standard, but a 10% reserve gold standard proposal is certainly a good start.
The Chinese are going for a weaker gold yuan, with their Hayekian plan for a commodity-basket based currency, perhaps because they feel less militarily threatened by the US government. However, gold is certain to be one of these 30 commodities and will almost certainly become the dominant commodity very quickly, if this Chinese plan is adopted worldwide, due to all of the usual reasons of gold's fungibility, non-corrosion, high worth per unit weight, etc, etc.
Expect huge opposition to the flying of this financial kite from both Obama and his obsequious toady Brown. The credit-dependent Anglo-Saxons have the most to lose from the adoption of a hard world money, so will fight tooth and nail to avoid it.
Though at this point, I don't think the Russians and especially the Chinese need our permission to do anything at all they want. They hold all of the cards. They either have the gold, the commodity wealth, or the productive capacity. Their futures are therefore in their own hands.
All we have is debt. Though of course, the Anglo-Saxons do have the military bases and the hardware to go with it, paid for by much of this debt.
But what are the Americans going to do? Nuke the Russians and the Chinese for daring to have gold currency when for 50 years we derided them for not having a gold-backed currency? Even I don't think Obama is that stupid. (Though there will be some sabre-rattling proxy nonsense in Iran, before the US government realises it isn't in a position to dictate to anyone anymore. Hillary Clinton is going to be earning a lot of air miles before this one is put to bed.)
Expect there to be an enormous party in Auburn Alabama, and here in Maturin Towers, if the Russians do decide to unilaterally adopt a gold rouble. The collapse of communism in the Soviet Union really will have turned full circle to give us an incredible revolution; one in which the Russians bear the sword for gold currency and the Anglo-Saxons cower under the socialist paper confetti of fiat currency.
What a truly remarkable world we live in. I wonder if Richard Nixon thought this complete turnabout would happen in less than 40 years, after coming off the dollar gold standard in 1971, when he was faced by the paper tiger of the Warsaw Pact?
I won't say 'Marvellous' just yet, though.
I'll wait for the Gold Rouble to actually happen before I say that. However, I do think Maturin Towers can spare the following gold-coloured word:
(Thanks to Anonymous and not an economist for the tip)