Robert Zoellick, World Bank Head Calls for Return to Modified Gold Standard

[ang]

Robert Zoellick President of the world bank has said leading economies should consider readopting a modified global gold standard to help guide currency movements the FT reports.

More Here:-

http://www.ft.com/cms/s/0/eda8f512-eaae-11df-b28d-00144feab49a.html#axzz14eIhBAPn

[DCon]

Robert Zoellick President of the world bank has said leading economies should consider readopting a modified global gold standard to help guide currency movements the FT reports.

More Here:-

http://www.ft.com/cms/s/0/eda8f512-eaae-11df-b28d-00144feab49a.html#axzz14eIhBAPn

I was just reading about this. Interesting idea but I cannot see the big banks going for it..


SINGAPORE (Reuters) - Leading economies should consider readopting a modified global gold standard to guide currency movements, said World Bank president Robert Zoellick.

Writing in the Financial Times, Zoellick said a "Bretton Woods II" system of floating currencies is needed to replace the Bretton Woods fixed-exchange rate regime that broke down in the early 1970s.

Zoellick called for a system that "is likely to need to involve the dollar, the euro, the yen, the pound and (yuan) that moves toward internationalization and then an open capital account."

He added: "The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values."


"The dollar is losing its relevance especially with the emergence of Asia economies, so a more neutral benchmark may be required. Gold, amid all the recent uncertainty, is proving its worth," said ANZ's senior commodity analyst Mark Pervan.


"Going forward that would be something that we could look toward, but it's not going to happen within a short period of time," said Ong Yi Ling, analyst at Phillip Futures in Singapore, adding that gold prices barely reacted to the comments.

http://abcnews.go.com/Business/wireStory?id=12083781

[C. Flower]

I think it needs a new thread. Anyone mind if I split this one ?

[DCon]

I think it needs a new thread. Anyone mind if I split this one ?

You're the boss!!

:)

[C. Flower]

It just occurs to me that a call for return to the Gold Standard (Paulite objective) by the head of the World Bank (New World Order nemesis of teabaggers?) will cause some mental dissonance.

[TotalMayhem]

Robert Zoellick President of the world bank has said leading economies should consider readopting a modified global gold standard

You either have a gold standard or you don't. If these people talk about a "modified" gold standard, they have something in mind that they can manipulate as they see fit.

[C. Flower]

The idea of a "basket of currencies" with a bit of gold thrown in has been floating around for a couple of years.

[BrendanGalway]

Resistance will be harsh. Whatever the merits of a Gold Standard(Im looking for Books on that one btw) the reality is that the current Fiat system, money from thin air, is the lifeblood of Western Civilization. Every government is in awe of its power. It allows them to buy elections, fund wars and cover up their mistakes by spending plenty. You are essentially asking the Political classes to abandon their Printing press and with it, abandon their Magic box that has kept us on top of the world.

If we had a fixed money supply, the days of Mega spending are over. We would have to balance our Budgets every year. Not impossible by any means but which Govt wants the pain of that? And who would be brave(stupid?) enough to adopt a system that makes them directly accountable for their spending?

Cant see it in the near term. Unless of course the Current System reaches the point of absolute collapse due to the amount of unrepayable debt in the world that there may be no choice.

[TotalMayhem]

Im looking for Books on that one btw

Paul Hein - All Work And No Pay

Excellent read, you can read it online here (http://www.usagold.com/allworkandnopay.html), or get it as PDF here (http://www.fame.org/pdf/Hein_All_Work.PDF).

[DCon]

Rand Paul was just interviewed on CNBC.

He said gold and silver should be used as legal tender. Doing this, he claims, would eventually make the dollar worthless

[BrendanGalway]

Paul Hein - All Work And No Pay

Excellent read, you can read it online here (http://www.usagold.com/allworkandnopay.html), or get it as PDF here (http://www.fame.org/pdf/Hein_All_Work.PDF).

Pretty good, I will have a look. Cheers.

[TotalMayhem]

the reality is that the current Fiat system, money from thin air, is the lifeblood of Western Civilization. Every government is in awe of its power.

Governements and the money shifters behind them will NOT give up their monopoly to counterfeit currency, just forget what Zoellick said.

[C. Flower]

This call by Zoellick, as well as the impending default crisis of the Eurozone is feeding in to the biggest surge in gold prices since the 1920s.

http://www.bloomberg.com/news/2010-11-09/gold-drops-from-record-as-dollar-s-climb-cuts-investors-demand-for-haven.html

[morticia]

Unless of course the Current System reaches the point of absolute collapse due to the amount of unrepayable debt in the world that there may be no choice.

I think PIIGS defaults might just lead us to that point. This may also belatedly be dawning on the ECB/Germans. I await developments in terms of what they do with us, with interest. If anyone is stoopid enough to let us go, I'd like to bet that the 7 trillion in PIIGS bonds out there will cause seriously massive problems; no one will lend to Spain or Italy and their implosion will cause blood to run on the streets. Not only that, but the UK won't be far behind, and unlike us, their far right is already in place and poised to profit.

The US banks will either collapse, or end up being bailed out by trillions of QE3.... and the Chinese will object to the devaluation of their trillions of dollars worth of T bills. Collapse their would lead to their property bubble imploding. They'll try to sell this as an act of aggression by the Yanks (to their own enraged and newly unemployed populace).

A few years after this, those left alive will fondly remember stressing about global warming, since they may well be tackling nuclear winter....

M. Trichet, it's dead simple. Just write us a blank cheque and all this can be avoided.

[Indiana Jones]

Robert Zoellick President of the world bank has said leading economies should consider readopting a modified global gold standard to help guide currency movements the FT reports.

More Here:-

http://www.ft.com/cms/s/0/eda8f512-eaae-11df-b28d-00144feab49a.html#axzz14eIhBAPn


Both Zoellick and Sarah Palin (although Palin is widely viewed as a mental light-weight, and a "lumpen ignorant idiot" abroad) weighed in on the same day.

Both were responding to the value of the dollar and surging commodity prices since Bernanke announced what is cryptically referred (Cryptic in this case meaning only the "enlightened ones" understand him) to as QE-3 (quantitative easing),, and more obscurely, a few years back, known as "monetizing the debt (http://www.google.com/search?q=monetizing+the+debt&hl=en&rls=com.microsoft:en-us:IE-ContextMenu&rlz=1I7ACEW_enUS385US385&prmd=ivn&source=univ&tbs=nws:1&tbo=u&ei=qMHaTJ65DpSNnQeBzvjdAQ&sa=X&oi=news_group&ct=title&resnum=1&ved=0CCoQqAIwAA),"

Palin was commenting in real time on " ... A "weak dollar—a direct result of the Fed's decision to dump more dollars onto the market"—and rising oil and food prices.

She also noted the rising world alarm about the Fed's actions, which by now Germany, Brazil, China among MANY OTHERS AT THE G-20 (http://www.thestreet.com/story/10914957/us-economic-policy-under-fire-ahead-of-g20.html) have bluntly commented on.

She went on to say "We don't want temporary, artificial economic growth brought at the expense of permanently higher inflation which will erode the value of our incomes and our savings, ... We want a stable dollar combined with real economic reform. It's the only way we can get our economy back on the right track."


ZOELLICK, mirrored Palin, with his "money quote:"
"The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today."

But Mr. Obama recently said:

"We can't continue situations where some countries maintain massive [trade] surpluses, other countries have massive deficits and never is there an adjustment with respect to currency that would lead to a more balanced growth pattern."
But Obama was calling for China to strengthen their currency against the dollar.

Who of the above three seems to best understand the current problems with US monetary policy, and who least understands it?


A look at the chart below reflects the opinion of the market on QE-3

Cotton up 100% year to date, and 80 points of that since Aug 27, the date Bernanke first broached "Quantitative easing"
And:
Gold up 29% year to date
Soybeans up 27% year to date
Copper up 21% year to date,
Crude Oil up 9% year to date

Chart 2010 - Raw Power/Commodities Fueled By The Fed (http://sg.wsj.net/public/resources/images/P1-AY153A_COMMO_NS_20101109210430.gif)

[Brehon]

cotton price has to do with supply size issues, like floods etc reducing the quantity that can be produced this year.
Gold, well china is buying a bucket load of it pushing up prices as it is with all minerals and hydrocarbons.
but this QE3 is going to cause major world shifts that maybe resisted. This isn't the seventies, when US put inflation up to pay back for Vietnam war. Trying to do it again. Won't be as easy this time.

[Indiana Jones]

cotton price has to do with supply size issues, like floods etc reducing the quantity that can be produced this year.
Gold, well china is buying a bucket load of it pushing up prices as it is with all minerals and hydrocarbons.
but this QE3 is going to cause major world shifts that maybe resisted. This isn't the seventies, when US put inflation up to pay back for Vietnam war. Trying to do it again. Won't be as easy this time.

Thank you Brehon; attempting to take that into account was why I supplied the chart at the bottom of my post

[DCon]

More Gold Standard chatter today


"Let the economists gasp: The classical gold standard, the one that was in place from 1880 to 1914, is what the world needs now. In its utility, economy and elegance, there has never been a monetary system like it."


It was simplicity itself. National currencies were backed by gold. If you didn’t like the currency you could exchange it for shiny coins (money was “sound” if it rang when dropped on a counter). Borders were open and money was footloose. It went where it was treated well. In gold-standard countries, government budgets were mainly balanced. Central banks had the single public function of exchanging gold for paper or paper for gold. The public decided which it wanted.

http://www.zerohedge.com/article/jim-grant-joins-chorus-demanding-return-gold-standard

[Skrimshander]

article here from the telegraph on the return to the gold standard..

not sure if this is the correct thread to post so if another is more suitable (mods) feel free to move

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8638644/Return-of-the-Gold-Standard-as-world-order-unravels.html

[DCon]

Larry Summers (former US National Economic Council director) and Mrs Bill Clinton (no introduction necessary) are amongst the names being considered to take over when Zoellick retires

http://jessescrossroadscafe.blogspot.com/2012/01/larry-summers-considered-as-us-nominee.html

[Count Bobulescu]

If I had to bet I’d say the job is Hilary’s if she wants it. She has made it clear she will not serve another term as Secretary of State. She has the political and diplomatic chops, if not the economic muscle, for the job. Summers has the economic muscle, but not the political or diplomatic chops. His tenure as President of Harvard didn’t work out so well. He operates from the position that he is the smartest guy in the room.

[Count Bobulescu]

It's official, Zoellick to step down in June.

[Count Bobulescu]

Jeffrey Sachs suggests himself to replace Zoellick.

http://bosco.foreignpolicy.com/posts/2012/03/02/jeffrey_sachs_submits_his_cv_for_world_bank_job
(http://bosco.foreignpolicy.com/posts/2012/03/02/jeffrey_sachs_submits_his_cv_for_world_bank_job)
An insider’s perspective on Sachs.

http://bosco.foreignpolicy.com/posts/2012/03/02/sachs_at_the_bank_an_insider_reacts

[DCon]

Surprising


Senior administration officials say President Barack Obama is nominating Dartmouth College President Jim Yong Kim to head the World Bank.

It's a surprise choice for the World Bank's top job. A physician by training, Kim is a prominent figure in the global health world. Officials believe his broad international experience will help counter criticism from developing countries weary of the U.S. stranglehold on the World Bank's top post.

http://abcnews.go.com/Business/wireStory/ap-sources-obama-taps-jim-yong-kim-world-15985422

[Count Bobulescu]

Some pieces that ran shortly before and shortly after the announcement. Note the Friend of Geithner reference.

http://www.washingtonpost.com/business/economy/official-obama-to-nominate-dartmouth-college-president-to-head-world-bank/2012/03/23/gIQAAPLiVS_story.html

(http://www.washingtonpost.com/business/economy/official-obama-to-nominate-dartmouth-college-president-to-head-world-bank/2012/03/23/gIQAAPLiVS_story.html)

President Barack Obama on Friday nominated Dartmouth College President Jim Yong Kim (http://www.dartmouth.edu/%7Epresident/bio/) to head the World Bank, saying he wanted to turn the organization over to a physician and development expert as opposed to the bankers, corporate leaders and political officials who have run it since its founding.
At a Rose Garden ceremony, Obama said Kim was the right person to take over when current President Robert Zoellick leaves office in June.

BULLETIN -- 'Obama taps Jim Yong Kim for World Bank,' by AP's Julie Pace : 'President Obama is nominating Dartmouth College President Jim Yong Kim to head the World Bank. It's a surprise choice for the World Bank's top job. A physician by training, Kim is a prominent figure in the global health world. Officials believe his broad international experience will help counter criticism from developing countries weary of the U.S. stranglehold on the World Bank's top post. Bank President Robert Zoellick (ZEL'-ik) announced his resignation in February. The actual selection of a new president will be made by the World Bank's executive board, but Kim is expected to prevail, in part because the U.S. has the largest percentage of votes.'

FACTS OF LIFE: Kim = Friend of Geithner. http://www.washingtonpost.com/opinions/the-imf-and-world-banks-quota-system-for-leaders/2012/03/22/gIQAP6hQUS_story.html?wpisrc=nl_headlines

(http://www.washingtonpost.com/opinions/the-imf-and-world-banks-quota-system-for-leaders/2012/03/22/gIQAP6hQUS_story.html?wpisrc=nl_headlines)

Uri Dadush and Moisés Naím (http://twitter.com/moisesnaim) are senior associates at the Carnegie Endowment for International Peace. Dadush has served as the World Bank’s director of economic policy, director of international trade and director of development prospects. Naím has served as an executive director of the bank.
The scandal over the repellent way the World Bank president is appointed has obscured an equally scandalous situation: the appointment process of the rest of the senior managers at the bank and the International Monetary Fund (IMF). They too are selected through opaque, quota-driven negotiations that are a far cry from the meritocracy these two institutions claim to value and preach to others.
When the World Bank needs a new president — and this time the Obama administration is expected to name its candidate Friday (http://www.washingtonpost.com/business/economy/at-the-world-bank-competition-for-a-change/2012/03/21/gIQAcEBaSS_story.html) — the charade goes like this: The public is told that the selection process will be “open, transparent and merit-based (http://moisesnaim.com/writings/critical-tips-choosing-world-bank-head).” Then, the White House announces a name — how, we do not know — and the anointed American goes through pretend job interviews with the bank’s board of directors, who pretend to make a decision about which, in fact, they have no say. The handpicked American gets the job.

3) Today is the deadline for World Bank nominees. "The deadline for nominations to become president of the World Bank is 6 p.m. Friday. Thus far, the only named candidate is Jeffrey Sachs, the development economist and director of the Earth Institute at Columbia University...The United States plans to name a qualified candidate who would immediately become the front-runner -- Europe is expected to back the American nominee, giving the White House pick a hefty portion of the World Bank board’s voting shares. Possible candidates include Lawrence H. Summers, the former Treasury secretary and Obama economic adviser; Laura D’Andrea Tyson, the former White House economist (and an occasional contributor to this blog); Susan E. Rice, the ambassador to the United Nations; and Indra K. Nooyi, the head of PepsiCo. (Speculation continues to swirl around Hillary Rodham Clinton, the secretary of state, and Timothy F. Geithner, the Treasury secretary. But they have been firmly ruled out.)" Annie Lowrey in The New York Times (http://link.email.washingtonpost.com/r/6041ZA/40J26O/I91CHZ/SEGN69/FXE5IP/D5/h).
SPOILER ALERT: The World Bank’s top job will go to (another) American (http://link.email.washingtonpost.com/r/6041ZA/40J26O/I91CHZ/SEGN69/9ZWV4J/D5/h).

[Count Bobulescu]

Here’s a good 2011 profile of Kim.

http://www.forbes.com/forbes/2011/1205/feature-passions-health-care-reform-jim-yong-kim-falkenberg.html

None of that made this physician, the ultimate outsider, a natural to lead clubby Dartmouth, which has had only 17 presidents since 1769. But the school's trustees were hankering for something different--for most of the last decade Dartmouth suffered through a provincial civil war as alumni factions sparred embarrassingly over their role in the school's future.

Kim was chosen because "he was committed to developing leaders at Dartmouth that would seek to solve some of the world's problems," says Charles "Ed" Haldeman, CEO of Freddie Mac (http://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=FRE) ( FRE (http://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=FRE) - news (http://search.forbes.com/search/CompanyNewsSearch?ticker=FRE)- people (http://people.forbes.com/search?ticker=FRE)) and board chair at the time. It's a mantra that Kim invokes often, usually citing Dartmouth's 12th president, John Sloan Dickey, who told the students in his 1946 convocation address: "The world's troubles are your troubles ... and there is nothing wrong with the world that better human beings cannot fix." In that spirit a $35 million grant arrived, anonymously. Kim's quest to fix the health care system was on
. A great video of Kim.

http://www.washingtonpost.com/blogs/ezra-klein/post/lunch-break-jim-yong-kim-a-world-bank-nominee-who-can-rap/2012/03/23/gIQAhtW6VS_blog.html

[Count Bobulescu]

· U.S. WORLD BANK NOMINEE UNDER FIRE. The Obama Administration’s top candidate for World Bank chief, Jim Yong Kim, has come under serious scrutiny in recent weeks with some critics worrying that his slim financial background could be a liability. The Wall Street Journal reports that Kim, once said he “had no idea what a hedge fund was” until he became president of Dartmouth University three years ago. If Kim is selected to run the global lending institution he would be under intense pressure to help stem the global effects of the slow economic recovery and would be called on to go beyond his academic experience to begin implementing global policies. Read more. (http://nationaljournal.us1.list-manage1.com/track/click?u=acc30b544fa4aa185af803703&id=b1cecbd68c&e=c7a7983233)

[DCon]

Zoellick sees some hostility emerging between the IMF (US) and Europe (Germany)


Robert Zoellick, the outgoing American head of the World Bank, warned the G20 summit in Mexico of a growing rift between the Europeans in charge of the bailouts and the IMF.

"The world's waiting for the Europeans to say what they want to do," said Zoellick. He predicted a showdown between the IMF and Europe by the end of the summer in the absence of any decisive action.


Barack Obama was expected to press Germany's chancellor, Angela Merkel, in Mexico on Monday night on the issue of eurobonds – the pooling of liability for single currency countries' debt. But there is no chance of Merkel agreeing to underwrite the debt of other European countries for the foreseeable future.

http://www.guardian.co.uk/world/2012/jun/18/g20-summit-barroso-eurozone-crisis

[C. Flower]

Zoellick sees some hostility emerging between the IMF (US) and Europe (Germany)

http://www.guardian.co.uk/world/2012/jun/18/g20-summit-barroso-eurozone-crisis

Well, if Germany doesn't want to underwrite the debt, and others can't, there will be a massive default, which will be deflationary, and cause unemployment.

What a mess.

The Gold Standard was abandoned for good reason too. Far too much like the Fiscal Compact in effect.

[MPB]

Well, if Germany doesn't want to underwrite the debt, and others can't, there will be a massive default, which will be deflationary, and cause unemployment.

What a mess.

The Gold Standard was abandoned for good reason too. Far too much like the Fiscal Compact in effect.

It won,t.

Default, at this stage is the stimulous.

Paying the debt, while ignoring the ability to pay, is the problem.

Especially when the debt is not yours, in the first place.

[C. Flower]

It won,t.

Default, at this stage is the stimulous.

Paying the debt, while ignoring the ability to pay, is the problem.

Especially when the debt is not yours, in the first place.

I agree that the debt must be defaulted on. The problem is that healthy parts of the economy are infected by the gangrenous bad debt and fake toxic assets.

The biggest tragedy is to see skilled and educated people sitting on their hands and "going rusty." Default, in itself, will not get people back to work.
There will need to be a lot more state intervention than we have seen in the recent past.

Just look at China - production grew there in a very controlled environment.