15.04.2009
Virtual gold, or non-cash monetary system, pegged to the ounce, may be regarded as the only real alternative to the dollar as the new global currency, says Department Director International Economics, Council on Foreign Relations (Council on Foreign Relations), Ben Style.
"Governments have the right to print money and their regulation are always manipulated. The fall of confidence in the dollar, not to mention other currencies makes the probability of occurrence of gold equivalent, or" digital gold, which can always be traded for real gold, "- said in an interview with Style.
Russia and China, and behind them, and several other countries this year put forward the idea of transition to the unit of account of the International Monetary Fund - Special Drawing Rights (SDRs) - instead of dollar.
SDRs are used to regulate the balance of payments with the peg to the cost of a basket of four major currencies: U.S. dollar, euro, Japanese yen and British pound sterling.
"Any transition to a new monetary system will be accompanied by an extremely painful process, including crises and social upheaval. Therefore, withdrawal from the dollar to a basket of four currencies, which, in essence, are also printed paper money, has no rational grain, - considers Style. - The Chinese government encourages the type of SDR, but can you imagine that the Chinese farmer wants to save money in obscure SDR, which counts some of the IMF headquarters in Washington? ".
This devaluation gold he did not expect, because when applying the highest technology and the concentration of resources in gold, an increase of gold reserves on a global scale can not exceed 6% per year, according to Style.
According to experts, the national reserves, including international financial institutions, in 2005 there were about 31 thousand tons of gold.
"Virtual" gold "will challenge the dollar against the will of governments, and especially the U.S. administration, which at the legislative level will be impede the expansion of its turnover. However, care will be supported in the gold markets and private investors, the expert said.
The advent of the gold banks, which lend to and attract deposits in gold equivalent until he called a narrow, but very dynamic niche market.
Style skeptical about the possibility of new reserve currency replacing the dollar or the euro, as diverse Europe can not conduct a coherent policy for global economy its currency by inflating the budget deficit, as do the United States.
The crisis also exposed the vulnerability of the Russian ruble, weakening its application for the role of a global currencies in the world, experts say. "The Russian ruble was a typical raw currency, whose rate depends on the price of oil and gas. I think the crisis is a sharp blow to ambitions of the ruble, claim to be one of the leading world currencies at the peak of oil prices. "
The fate of the dollar is vulnerable only to the political factors namely, if China stopped buying U.S. bonds and begin their discharge, thus initiating a trend globally. China, in his estimation, is buying 30% of all U.S. Treasury bonds that, given the almost zero returns, he called "Free credit U.S.."
However, having started dumping bonds, China, and thus devalue their own assets "- the expert said.
In the foreign exchange reserves in China is 1.5 trillion dollars.
"The only safe way to weaken monozavisimost from the dollar to China - is to accumulate gold, without affecting the dollar against the euro. I will not be surprised if China begins to rapidly accumulate their gold reserves, "- said Stile.
The tendency to reduce dependence on the dollar will increase in the world, experts say. However, the transition to "virtual gold" as a major world currency he called a possible scenario if the U.S. Treasury did not demonstrate a more responsible approach and not be able to restore confidence dollar.
"Investing in gold can be lucrative, especially if you believe that everything else in the world will collapse," - says Style.
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