We forget, perhaps, that from 1 March 1950 the Soviet rouble was on a gold standard at 4 roubles 45 kopecks for 1 gram of pure gold until 1961, when Khrushchev devalued it and refixed it to the dollar. Stalin had been a signatory to the Bretton Woods agreement but refused to join it and make the rouble subservient to the dollar as its intermediary for a gold standard. The Soviets’ rouble was eventually driven off its gold standard by disastrous economic policies. Faced with reforming the command economy system and accepting the economic failures of communism, in 1961 the currency had to give way. This is worth mentioning to remind us that the Russians are no strangers to a gold standard, were not brought up with Keynesian beliefs inculcated in their institutions and are probably viewing the west’s fiat currencies in that light. From unhappy experiences, they are also fully aware of the power of the dollar’s hegemony, and in the absence of military action that it is America’s weapon of choice.
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