The 1991 Project: November 13-19. Gold Reserves and Monetary Power

By Caden Wilcox

As the Soviet Republics continued to distance themselves from Russia, new political and economic questions emerged. The Moscow News, in their November 17 edition, discussed the implications of Eurasian macroeconomic policy and debated the condition of the deteriorating government’s gold reserve. With the statement, “National emblems and anthems are no more than symbols. Reaching independence is a more involved process involving the army, borders and division of USSR property, as well as its gold and jewels,” the publication dramatically presents the condition and projected end of the Twentieth-Century Soviet project.

The Moscow News published four articles debating this contentious sector in their 46th edition of the year. Headlining this topic was Lyudmila Telen’s analysis, “Dividing up the Gold.” Here, she introduced the financial and political arguments underlining the macroeconomic institutions of the disintegrating Soviet Union. She noted how Yeltsin called for a collection of gold reserves in Russia, which would reduce the capital wealth of the satellite nations. Telen discussed how his pursuit of a solely Russian banking system dramatically undermined the economic potential of the new Russian nation.

Growing from this observational narrative, the Moscow News provided an analysis of the implications, political strategies, and economic initiatives of the Eurasian actors. It explained how Uzbekistan and Kazakhstan refused to export mined gold and created domestic reserves, and the writers predicted the emergence of new Eurasian currencies. As the first step to independent monetary legitimacy, the paper noted the erosion of the monopsonistic market power that the Russian Federation had previously imposed on Soviet precious metal production.

Furthermore, the writers reached the consensus that Russia should ultimately collect these gold reserves. They argued that if the Republics were to gain access to substantial quantities of gold, they would sell a large portion of the resources to finance the region’s necessary immediate investments. Increasingly, because of the sector’s hyperbolically responsive prices to changes in supply, they argued that this market influx would erode a majority of the luxury good’s international value, further crippling the deteriorating economic solvency of the government’s institutions.

As Russia fought for economic power, this publication noted the continued bureaucratic failure of the regime. Recognized by multiple articles, two government officials both claimed not to have personally weighed the gold and assumed the quantity currently held in the Union. By acknowledging that the gold has not been measured in its entirety since the 1930s, The Moscow News undermined the institution’s economic legitimacy. Given this, the authors approximated that the net value is 2 billion US dollars (1991 valuation). Compared to its western counterparts, this amount lacks significance; the authors question if this quantifies Russian minimal economic power or proves bureaucratic dishonesty–as an attempt to artificially inflate gold prices. Altogether, this economic analysis noted the Unions’ failing political and financial initiatives and deflates their international monetary legitimacy.

Caden Wilcox is a Sophomore double-majoring in Russian, Eastern European, and Eurasian Studies and Economics.

Sources

M.G.. “gold reserve,” Moscow News Weekly, No. 46. (1991, November 24). pp 6-7 Retrieved November 13, 2021, dlib.eastview.com/browse/doc/49796899.

Gurevich, Vladimir. “We need to know the truth about our gold reserves’,” Moscow News Weekly, No. 46. (1991, November 24). p. 9. Retrieved November 13, 2021, dlib.eastview.com/browse/doc/49796899.

Telen, Lyudmila. “Dividing of the Gold,” Moscow News Weekly, No. 46. (1991, November 24). p. 6-7. Retrieved November 13, 2021, dlib.eastview.com/browse/doc/49796899.

V.L.. “Valery Rudakov: ‘240 tons–that’s news to me’,” Moscow News Weekly, No. 46. (1991, November 24). p. 9. Retrieved November 13, 2021, dlib.eastview.com/browse/doc/49796899.

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