Gold backed SDR?
Duncan Richardson, News Editor
15 Apr 2015, 10:56 a.m.
As fiat currencies become more and more unstable, many are asking “what happens next?” With China buying nearly all of the world’s mine supply many believe when the U.S. dollar fails China and Russia will back their currencies with gold. However, there may be a different outcome.
Over the weekend Lord Meghnad Desai, Chairman of The Official Monetary Financial Institution Form stated that gold should be included with the International Monetary Fund’s Special Drawing Rights to help stabilize the currency. Desai believes this is quite likely and would be easier to implement if China discloses its true official gold holdings.
Currently the SDR is a basket of four fiat currencies the US. Dollar, British pound, Japanese yen and the euro.
Many in the gold community are predicting China will eventually back the Yuan by gold, however, they are forgetting a gold standard will limit the ability of the Chinese government to print money. With a population of 1.2 bn would the Chinese government be ready to give away this power?