For Russian President Dmitry Medvedev, the monetary future is now. At his closing press conference, Medvedev held up a golden coin bearing the words “united future world currency,” which he said was minted in Belgium and handed to G-8 attendees.
“Even the mints” are thinking about a post-dollar world, Medvedev said. The test coin “means they’re getting ready.”
The Russians keep at the global currency argument even though the development of an international currency was not a topic for G8 discussion. Of course, Russia does not have the same risks as the huge central bank holdings of China so they can push this issue further. Russia also has the payment problem of oil being priced in dollars but most of Russian trade in euros. Dollar declines hurt their terms of trade.
This reserve issue will not go away. If the dollar weakens there will be more negative talk. Unfortunately, even the US government really does not want a strong dollar. The Treasury does not have a dollar policy other than it would not like to see any significant decline. However, this is not the same as saying the US has a strong dollar policy. We have to accept that this dollar reserve noise will continue.
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