"This new system is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi [yuan] that moves towards internationalisation,"
The World Bank head’s comments come only days ahead of the G20 summit in Korea where world leaders are expected to harshly criticize the U.S. Federal Reserve’s most recent $600 billion quantitative easing program.
While it has been almost 40 years since U.S. President Richard Nixon unexpectedly brought to an end the link between the dollar and gold, ending the Bretton Woods system, under which the globes top economies agreed to keep their currencies pegged to the dollar at fixed, but adjustable rates, Zoellick acknowledge that a return to the gold standard may seem a step backward, but argued that gold was already being used as an “alternative monetary unit” at present.
Regal Group International understands he went on to say that the leaders of the G7 should look at new measures to assist developing nations grow their own economies and commit to not manipulate their own currencies except for in exceptional circumstances.
Many analysts came out strongly against Zoellick saying it would be unwise to peg currencies to an asset which they cannot control, with one critic saying that Zoellick “really may be the stupidest man alive.”
Joe Foster of Van Eck International Gold Fund told Regal Group International sources that “what gold would do is instill some sort of discipline in the system that is not there currently and hasn’t been there for years and years. There would be a lot of resistance from people who want to see the current system remain in place…Hopefully, it will get discussed and explored. But in terms of it actually happening I don’t have a lot of hope for that.”
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