THE GOLD STANDARD IS COMING BACK BECAUSE OF RUSSIA
The gold standard, which is a form of currency utilized where the intrinsic value of money is linked to a particular amount of gold, is a concept that has existed since antiquity but has since faded in relevance. Recently, there has been speculation as to whether or not the gold standard could make a comeback due to Russia's massive oil reserves. In this essay, I will explore the possible implications of Russia oil causing a resurgence of the gold standard.
Russia oilgate is a term used to refer to the scandal caused by the Russian government in 2014, when it allowed a state-run oil company to pump oil out of reserves established since the Soviet period. This has caused significant negative implications for the environment, economy and governance of the country, which can be felt by the local population. On the environment, the oil extraction has caused increased air and water pollution, as well as disruption of flora and fauna in the regions where it is extracted. Economically, it has led to an increase in fuel prices, decreased income and economic instability in the country. Moreover, there has been a decrease in the quality of life in the areas where the oil is extracted and an increased distrust of the government by the local populations. Governancewise, it has been shown to increase corruption and harm transparency and accountability systems in the country. These implications have proven to cause significant harm and need to be addressed in order for Russia to restore its governing and environmental standards.
Russia's recent oilgate scandal has serious implications for the global economy, including potential harm to both US and European economies. According to "Oilgate: The Rising Energy Challenge," (Kerka, 2020), the investigation into allegations that Russia's oil company Rosneft has illegally been selling oil through illegal channels is of particular concern. This scandal has the potential to affect global oil prices, as it threatens to disrupt supplies and distort market competition. Additionally, it could increase the risk of price manipulation, as well as create broader implications of corruption in the energy industry. As with any international scandal, Oilgate also puts the security of investments at risk and highlights concerns around money laundering. Therefore, it is essential to evaluate the potential effects of this scandal on international economies, in order to effectively mitigate any potential damage.
Russia oilgate is a term used to describe the attempts by Russia to increase their control over the global oil market. This can have a number of implications both in terms of political power and market effects. Politically, it can further entrench the power of Russia in oil-exporting countries where Russia holds contracts and infrastructure, reducing competition and allowing Russia greater leeway in controlling prices. In terms of market effects, Russia oilgate can lead to an inflation in oil prices due to increasing demand, reducing their economic competition with the US and other countries. Additionally, increases in oil prices may also have longer-term effects on industries that rely on oil, leading to fluctuations in products and services. Understanding the potential implications of Russia oilgate is thus paramount to predicting market movements.
The gold standard, a monetary system in which countries tied the value of their currency to a fixed amount of gold, cannot make a comeback due to Russia’s growing dominance of the international oil market. According to the World Bank, Russia is now the second-largest oil exporter in the world, accounting for 19% of global oil exports and 11% of global oil production (“Russia”). The increasing importance of oil as a global economic tool, combined with Russia’s control of much of the world’s supply, has made it more difficult to reestablish and maintain the gold standard infrastructure. Moreover, U.S. President Joe Biden’s recent sanctions against the Russian government and its oil industry has further emphasized the close link between a gold standard comeback and the oil industry. This shift in global oil dynamics and international politics has made it almost impossible for a gold standard system to be realistically implemented.
Overall, it is unlikely that a return to the gold standard would be feasible at a global level due to Russia’s oil reserves. As Russia has already indicated that it does not believe that the gold standard should be the basis for a global currency, it would likely not agree to such a system to be used. Additionally, the gold standard itself is not a practical solution in the current modern economy, due to its lack of flexibility, its limits on liquidity, and the unpredictability of its demand. Russia’s oil reserves may provide it with an economic advantage, but it is unlikely that this will result in the gold standard making a comeback in the near future.
