Russia's President, Dmitry Medvedev (pictured left), pulled the world's new currency from his pocket at the meeting of G8 leaders in the Italian city of Aquila. The future of the dollar was one of several subjects debated at the G8 summit. Mr. Medvedev, who has been seeking ways to displace the dollar as the world's dominant reserve currency, produced a sample coin of what he described as a 'united future world currency'. "Here it is," Mr. Medvedev said, according to Bloomberg. "You can see it and touch it." The coin, which was minted in Belgium, was presented to all the G8 leaders attending the summit and bears the words 'unity in diversity.' The possibility of a supranational currency "concerns everyone now, even the mints," Mr. Medvedev said. The test coin "means they're getting ready. I think it's a good sign that we understand how interdependent we are." – Telegraph
Dominant Social Theme: Alternative currencies are OK.
Free-Market Analysis: How do you write about what may be the new world currency without mentioning "gold." You write the article without using the word. You call it currency – even though it is specie – and you describe it as being minted. But you never call it gold. Way to go, Telegraph. Interesting article anyway.
We have stated within the pages of our slim volume on a number of occasions that were non-Western countries serious about producing an alternative currency, they would back it with gold. Apparently, Medvedev has gone one step further and is hinting at putting gold back into circulation. Wow.
Actually, it wasn't Medvedev's idea to create the coin, but someone named Sandro Sassoli, an Italian journalist who had the idea back 1996, apparently. Hard to find much about him.
OK, who knows if this is a threat or the start of a real alternative currency. Somehow we can't quite fathom that gold would be produced as currency, especially given that China has been part of this movement for a new money and China owns a trillion or so US paper dollars. But we have no doubt that China and Russia both are serious about the dollar's plight. And they don't want to see it debased. Here's what Chron.com had to say about the coin last week:
The coins ... are called "eurodollars," in a symbolic call for a common currency to unite Europe and the United States. They have a value of euro 2,800 ($3,900) and were produced by the United Future World Currency, a group pushing the idea of a global currency. The works will go to the leaders of the Group of Eight industrialized countries as well as to the President of the European Council Fredrik Reinfeldt and EU Commission President Jose Manuel Barroso. The Group of Eight is Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States.
That said, Medvedev et. al. seem to be getting the right idea. If they want to end currency debasement and endless arguments over the efficacy and role of central banks, the solution is simple. Coin gold and silver and watch the market go to work.