Click On Gold Coin For More Information
Maple Leaf Gold Coins Krugerrand gold coins American Eagle gold coins Centenario gold coins panda gold coins




Gold As A Monetary Role


Warning: DOMDocument::loadXML(): Empty string supplied as input in /homepages/3/d266192352/htdocs/gold/wp-content/plugins/auctionthumbs/ebayauction.php on line 94

Warning: DOMDocument::loadXML(): Empty string supplied as input in /homepages/3/d266192352/htdocs/gold/wp-content/plugins/auctionthumbs/ebayauction.php on line 94

Warning: DOMDocument::loadXML(): Empty string supplied as input in /homepages/3/d266192352/htdocs/gold/wp-content/plugins/auctionthumbs/ebayauction.php on line 94

Warning: DOMDocument::loadXML(): Empty string supplied as input in /homepages/3/d266192352/htdocs/gold/wp-content/plugins/auctionthumbs/ebayauction.php on line 94

Warning: DOMDocument::loadXML(): Empty string supplied as input in /homepages/3/d266192352/htdocs/gold/wp-content/plugins/auctionthumbs/ebayauction.php on line 94

Warning: DOMDocument::loadXML(): Empty string supplied as input in /homepages/3/d266192352/htdocs/gold/wp-content/plugins/auctionthumbs/ebayauction.php on line 94

Warning: DOMDocument::loadXML(): Empty string supplied as input in /homepages/3/d266192352/htdocs/gold/wp-content/plugins/auctionthumbs/ebayauction.php on line 94

Welcome to Part 3 of our series on Why To Buy Gold Bullion. If you missed part 2 you can get it here: US Dollar Devaluing

The gold standard has always been the anchor of world finance in the 19th Century but began breaking down in the early 20th century during world war I as governments engaged in unprecedented spending. Then it collapsed in the 1930s when the British Empire, the US, and France all abandoned their parities.

After world war II it was revived as part of fixed dollar system (Bretton Woods) until US President Richard Nixon was forced to close the gold window in 1971 in order to halt the dramatic outflow of gold caused by foreign central banks (France) changing their dollars for gold.

Ever since 1971 the US dollar has lacked any external anchor. It is widely argued that the financial excesses and extreme debt leverage of the last quarter century would have been impossible - or less likely - under the discipline of gold.

It seems now that after 38 years gold becomes an attractive alternative again for some foreign nations since the dollar as a wolrd reserve currency is losing confidence fast.

We’ve seen  China upping up its gold reserves and calling for a new world reserve currency that belongs to no individual nation. It seems that Russia is thinking alike:

Russia backs return to Gold Standard to solve financial crisis
Telegraph.co.uk – March 31, 2009

Russia has become the first major country to call for a partial restoration of the Gold Standard to uphold discipline in the world financial system.

Arkady Dvorkevich, the Kremlin's chief economic adviser, said Russia would favour the inclusion of gold bullion in the basket-weighting of a new world currency based on Special Drawing Rights issued by the International Monetary Fund.

And what about the US itself? Do they back the idea of a new world reserve currency?

The answer is rather predictable:

Obama dismisses need for new international reserve currency
Washington - March 25, 2009

U.S. President Barrack Obama sees no need for a new global reserve currency as proposed by Russia and China, declaring the dollar "extraordinarily strong."
"I don't believe that there is a need for a global currency," Obama said during a prime-time news conference on Tuesday.
Russia has submitted a proposal to the G20 summit due in London next week for the IMF to examine creating a supra-national reserve currency, a move that was supported by the chairman of the People's Bank of China in an essay released on Monday.

You don’t have to be a genius in order to understand why the US does not want to give up the exclusive rights to print the world reserve currency.

De Gaulle called the Dollar "America's exorbitant privilege", repeating a phrase of his favorite economist, Jacques Rueff. This privilege gave the United States exclusive rights to print the Dollar, the world's "reserve currency", and force it on everyone else in payment of debt. Under the post-war Bretton Woods Agreement of 1946, the Dollar could not be refused.

Or as Amsel Rothchild once said:

Give me the right to print money and I care not who makes the laws.
He who controls the money streams rules.
Amsel Rothchild.

The battle for a new world reserve currency will unfold itself over the next few years whereby gold will shine as the only currency which no nation has the capability to destroy its value.

Eric Hommelberg
The Gold Drivers Report

Related posts:

  1. Gold Bullion Is A Super Commodity For eons, gold has been used as jewelry, for greatly...
  2. Investing In Gold In China For those who have a bit of experience in the...
  3. US Dollar losing status as world reserve currency This is part 2 to yesterdays post about Why Gold...
  4. Gold Commodity Market A commodity is a product for which there is a...
  5. Gold Is The Ultimate form of payment – No counter party risk Gold still represents the ultimate form of payment in the...