Gold is Replacing the Dollar

August 03, 2023

by Alasdair MacLeod Gold Money

Financial developments in the Russian and Chinese axis are being generally ignored. The confirmation by Russia that a trade settlement currency for an expanded BRICS is on the agenda at the Johannesburg summit later this month has barely been reported, and even sound money advocates are highly sceptical.

But all will be revealed in three weeks’ time. Meanwhile, this article looks at how gold standards could return in the wake of a new gold-backed trade settlement currency, if that is what emerges, using the currency board model as a template.

This is followed by an explanation of why gold reserves must cover the bank note issue. I assess the cover afforded to both the rouble and the renminbi, incorporating assumed levels of non-reserve gold bullion held by both Russia and China. The conclusion is that both nations have ample cover to implement proper gold standards. And that gives the opportunity for other allied nations to implement currency boards with the renminbi.