what just happened with the Russian Central Bank - pegged 1 gram of gold to 5000 rubles (about 50 bucks) at the same time, Putin made it so that Russian Gas and oil can only be purchased in Rubles.
Meaning: Putin basically just pegged Russian Oil and Gas to Gold, using paper rubles as
a proxy. Europe will need to either buy Rubles from Putin in Gold, in order to buy Gas and Oil, or they will have to buy directly in Gold. This means there will soon be more demand for Rubles and with 5000 to 1 peg and oil being priced directly in gold - we could see a massive price disruption in terms of how much Gold a USD can actually still buy.
Foreign Countries holding our dollar debt notes in reserve will see less of a use for them and will want to start dumping them, in order to get something more stable, something which holds its value.
Basically, any currency pegged to gold now will fit the bill? This means these countries -
like Japan will be dumping their dollar debt as fast as they can. They're not going to simply go down with
the ship.
This will all have a deflationary effect on the Ruble making it more valuable over time.
This means Putin will be able to re-peg the Ruble to Gold at whatever rate he wants, down the line, its
5000 rubles today. Tomorrow it might be 500, and then 100, and then 10.
This also means all those excess dollars being dumped by foreign nations are about to come home and could cause even worse inflation than were seeing now.
Meaning: Putin basically just pegged Russian Oil and Gas to Gold, using paper rubles as
a proxy. Europe will need to either buy Rubles from Putin in Gold, in order to buy Gas and Oil, or they will have to buy directly in Gold. This means there will soon be more demand for Rubles and with 5000 to 1 peg and oil being priced directly in gold - we could see a massive price disruption in terms of how much Gold a USD can actually still buy.
Foreign Countries holding our dollar debt notes in reserve will see less of a use for them and will want to start dumping them, in order to get something more stable, something which holds its value.
Basically, any currency pegged to gold now will fit the bill? This means these countries -
like Japan will be dumping their dollar debt as fast as they can. They're not going to simply go down with
the ship.
This will all have a deflationary effect on the Ruble making it more valuable over time.
This means Putin will be able to re-peg the Ruble to Gold at whatever rate he wants, down the line, its
5000 rubles today. Tomorrow it might be 500, and then 100, and then 10.
This also means all those excess dollars being dumped by foreign nations are about to come home and could cause even worse inflation than were seeing now.