World Bank chief surprises with gold proposal

The world's largest economies should consider gold as an indicator to help set foreign exchange rates, the head of the World Bank said on Monday in a proposal that threw open the acrimonious currency debate just before a summit of G20 nations.

Writing in the Financial Times, World Bank President Robert Zoellick called for a new monetary system to replace the floating rates adopted in 1971 known as Bretton Woods II.

AntiSpin: On January 3, 2006 I started a site called The Fourth Currency where I asserted:
A return to the Bretton Woods international gold standard created in 1944 is inevitable

Thirty-seven years ago the world’s economies started on the circular track back to Bretton Woods. We will sooner or later be back where we started, with international transactions guided by a fixed gold price.
So there's your answer. It was inevitable to me in 2006. Still is. America's free ride is almost over. Thank the leaders of both parties who built the FIRE Economy on the foundation of the Dollar Cartel since 1971.

With any luck, the currency wars end peacefully.

The coins pictured, by the way, are three I inherited from my father who bought them in 1972 for the price shown on the original protective covers, $79. That was the year after the U.S. defaulted on its foreign gold debts, and the year that the chairman of the Bank for International Settlements (BIS) proclaimed that gold without demand from central banks as a monetary asset was free to fall from its then fixed price of $35 to its true market value as an industrial commodity, "around $7.50 per ounce."

Today each of the coins in the picture sells for $1,730, and gold trades for 188 times the price forecast by the BIS. Look here for my original arguments for buying gold in 2001.

When to sell it? When vested interests step aside and allow the nation and global economy to heal from decades of debt-financed economic growth. Don't hold your breath.