Interesting view from Louis Woodhill on Forbes:
Over the past 64 years, real gold prices have averaged $544.91/oz in 4Q2013 dollars, and real crude oil prices have averaged $38.85 bbl. This means that an ounce of gold will typically buy about 14 barrels of oil.
If we fully stabilized the dollar today, we could expect gold prices to fall toward $550/oz, and oil prices to fall toward $40.00/bbl. The huge dollar premiums that gold and oil currently command reflect the value that these easy-to-store commodities have as hedges against dollar instability. If we reformed our monetary control system to guarantee the real value of the dollar, we would eliminate this risk. The risk premiums currently enjoyed by oil and gold would then decline toward zero, as the new monetary system gained credibility.
Are the current gold and oil premiums simply a hedge against an unstable dollar?
Read more at It's Time To Drive Russia Bankrupt — Again.
Aloha! Look at global oil capex vs. global oil demand. A $40bbl oil price would bankrupt Putin and Exxon! Gold is a hedge against the dual government/bank based monopolistic capitalism that Karl Marx warned of. Both hyperinflation and hyperdeflation are political events. Currencies are only valid so long as “confidence” exists. Crony government and banking erodes confidence and Human Action seeks alternative currency devoid of government and bank interventions. Besides shouldn’t the US government clean up its own “act” instead of intervention into Russia? The Reagan era was vastly different than the Obama era. How’s that Cuba Embargo working for ya? Sanctions? Hmmm…
A side-benefit of “continuous war” is that it distracts voters from other issues. Like how much (or little) say they have in running the country. And what oligarchs benefit most from the way the country is run.
Perhaps Putin is simply trying to emulate the US.