While the official narrative in the mass media is anti-Putin, his intention to pursue a new global reserve currency backed by hard assets like gold is historically and financially very sensible (Business Report, July 4).

Putin is correct in noting that trust in the US dollar as the world’s dominant currency has been shredded. Mired in a $30 trillion debt with inflation spiralling out of control and ruled by globalists bent on crippling the US economy through their green energy plans, there is no reasonable basis to adhere to what has been the international status quo as regards the dollar since 1944.

Besides, there is a more fundamental reason to forsake the dollar and that is because it is a fiat currency that is not even owned by the US government. Since 1913 the issuing of the US dollar has been the responsibility of the Federal Reserve, a private, independent institution. In terms of Article 1, section 8 of the US constitution, only Congress has the power “to coin money and regulate the value thereof.” Thus the role of the Federal Reserve is constitutionally not in accord with the central principle of the US constitution which is premised on the three introductory words: “We the People.”

A glance at a US dollar note reveals the words “Federal Reserve Note.” There is no reference to the US Treasury because dollars are not issued by the Treasury. Thus, a US dollar is actually a debt note printed by the Fed and sold to the US government at a cost in interest. The Fed determines interest rates and creates dollars out of fresh air which is why there is arbitrary manipulation of money and its value by an unelected power.

Putin’s idea of a new reserve currency not controlled by any individual country and backed mostly by gold has merit. South Africa, as a member of BRICS, would benefit from such a financial configuration given the systematic destruction of the US dollar through endless printing and profligate expenditure.

About Author