Some of you may have noticed that in the last few weeks, Russia has started issuing gold ‘pieces’ that are legal tender in the RF, and must be accepted at face value in all kinds of payments without any restrictions. Other banks outside Russia are also looking at ‘stamp sheet’ squares of gold grams that can be used in the same way. Inside China, at the top of the financial system a measured debate is well under way about how to create a global ‘super-currency’ backed by gold. The Chinese would favour this of course, because they own more gold than almost anyone now. And although it would be a bind for them (if it indirectly made the Yuan far more highly valued) in terms of their export drive, as a trustworthy multinational currency it would mark another move up for Beijing – bringing with it massive financial services revenue as the hub for 21st century deal-money transmission. In today’s bonkers world, there is more to being a sovereign than physical exports alone.
But in an equally broad sense, gold is shifting its investment positioning as fiat currencies issued by the West begin to look increasingly prone to the inflationary pressures of debt management. Not only that, but those banks we all love to hate are having the same thoughts about how to stabilise their finances through the medium of more flexible forms of gold.