Bring back the gold standard, says World Bank chief

From the UK Telegraph:

Robert Zoellick, the president of the World Bank, has called on bickering G20 nations to bring gold back into the global monetary system as an anchor to guide currency movements.

Ahead of a Group of 20 summit this week in Seoul, Mr Zoellick said an updated gold standard could help retool the world economy at a time of serious tensions over currencies and US monetary policy.

He said the world needed a new regime to succeed the "Bretton Woods II" system of floating currencies, which has been in place since the fixed-rate currency system linked to gold broke down in 1971.

"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." Mr Zoellick said in a commentary piece......read in full

Currency War Hits Mexico as Carstens Signals Rate Cuts

By Jens Erik Gould and Andres R. Martinez - Nov 11, Bloomberg.com

The peso’s biggest rally on record may prompt Mexico’s central bank to cut interest rates next year to boost exports after other Latin American policy makers raised borrowing costs to cool their economies.

Governor Agustin Carstens signaled during a Nov. 2 meeting with economists in New York that he would consider cutting rates should the peso keep gaining, according to analysts from Barclays Capital, Deutsche Bank AG and UBS AG who attended the meeting. The bank may lower borrowing costs a quarter percentage point to 4.25 percent by March, Mexican futures trading show.

.......Countries from Brazil to Thailand to Colombia are imposing levies on foreign capital, ending tax exemptions for foreigners or stepping up dollar purchases in the currency market. Carstens criticized such moves in an Oct. 27 radio interview.

“We would try to avoid falling into these circumstances, although you can never discard all possibilities,” Carstens said. Currency wars are “very destructive,”......read in full

A President who actually understands the World

The Currency War - Good For Gold

By Peter Shiff:

As the world awaits another $600 billion flood from Bernanke's printing press, central bank governors from Brasília to Tokyo are preparing to respond in kind. This is the monetary equivalent of a nuclear war, except instead of radiation, bombs of inflation threaten to make the world economy uninhabitable for saving and productive enterprise.

While much of the attention has been focused on China and accusations that it is a "currency manipulator," the first shot in this war was clearly fired by the US Federal Reserve. Last month, the Fed came out with a statement that, for the first time ever, said inflation is rising at a rate "below its mandate." That is, they acknowledged that the deflation threat had passed, that prices were stable - but they still intended to send prices higher.

Since the Bretton Woods Agreement was signed in the wake of World War II, the global monetary system has been based on the US dollar. This means that when the Fed decides to create trillions of dollars of inflation, other countries can't simply say, "let them dig their own grave." Instead, because their international transactions are denominated in dollars, they feel a pressure to maintain relatively stable exchange rates between their currencies and the dollar.......read on

I TOLD YOU SO !!

ABC Bullion Blog exclusive:

I TOLD YOU SO !!

Peter Souleles

In February 2010, I wrote an article titled “How you can buy a real Dollar for 50 cents”. The opening words were as follows:

“A one dollar paper note is the lowest value note in U.S. currency and weighs one gram. On the other hand, silver is trading at around $15.60 per oz which equates to 50c per gram. So the question is “which do you buy, silver at 50c per gram or paper at $1 per gram?”

At the time of writing this article, silver has hit $28.50 per oz or 91c per gram and still seems to have the desire to run further. Should it hit $31.10 per oz, silver will have hit parity with the paper dollar on a weight basis.

The question though, still remains the same as the one I asked in February, “Would you prefer to buy a gram of paper for $1 or a gram of silver for the same price?” What we are now witnessing is something akin to Gresham’s Law which states that: "Bad money drives out good if their exchange rate is set by law.” As Wikipedia states: “The artificially overvalued money tends to drive an artificially undervalued money out of circulation.”

People are now realising the truth about the economy, unfunded liabilities, quantitative easing, sovereign debt crises, currency wars and manipulated markets. Therefore the few that recognize the overvalued nature of their dollar holdings are desperately trying to gather real wealth in the form of silver and gold before they go parabolic. The rush of dollars towards gold and silver is greater than the rush of precious metals supply, hence the upward movement.

If in doubt, one only has to witness the ever increasing portion of Chinese paper dollar trade surpluses being directed towards asset and commodity acquisitions rather than US Treasury purchases.

Central to all this turmoil, is the continuing confusion of most people and investment advisers between price and value, propaganda and history, currencies and money. The former are nothing more than second rate impostors of the latter and in good time they are exposed for what they are: fraudulent attempts to rob the people of their savings.

Gold and silver do not suffer from these confusing contradictions despite systemic and systematic manipulation, despite never been given any stimulus checks or TARP assistance and in spite of having been constantly bagged by the “establishment media”.

Common sense dictates that silver and gold should continue to rise against the tide of toxic financial abortions that infest the corridors of the Fed and bank balance sheets. However wisdom and experience should also tell us that the fight still lies ahead because psychopaths armed with printing presses, and who also have the support of armies and subservient judiciaries, are capable of ensuring that “markets can remain irrational longer than you can remain solvent.”

The attacks on gold and silver will soon follow as they have done on previous occasions. The weak will be rattled into dropping their gold and silver only to have them scooped up by stronger hands.

In the longer term humanity eventually finds its way back to some semblance of normality. The path however is littered with the corpses and empty wallets of those who trusted governments to be their defenders and protectors.

Who will you trust?

Peter Souleles

Sydney Australia

Keiser Report - Interviews Silver guru David Morgan

Gold and Silver prices up on the back of global uncertainty

Gold hits new high but eases on short term trading

Comex December futures hit a new record high of $1424 towards the end of trading on the NYMEX, but just as the NYMEX was about to close short term traders decided to take some money of the table. This move has continued and accelerated into the NY Globex trading session on the back of the FOREX markets bidding up the US$. Currently gold has retraced its gains back to $1391.

It appears the Fed's QEII announcement last week has had the affect of tossing a rock into the small pool of the precious metals markets and the ripples from the initial splash are going to be felt for some time to come. But given time the market will adjust to the new normal of increasing US$ debasement and set the prices of hard money and PGMs accordingly.

Uncle Ben can smile for now, but there will be a day of reckoning. Currency debasement never ends well. That is why the US founding fathers made it a Capital crime, very appropriate as it is a crime against capital.

QE2 is so last week - Bring on QE3

From CNBC.com, By: Jeff Cox

Now that the Federal Reserve has crossed the Rubicon into its next round of monetary stimulus, the only question for investors Thursday seemed to be what's next.

"They're already talking about QE3," said Dave Rovelli, managing director of US equity trading for Canaccord Adams. "Eventually we're going to be printing so much money the dollar is going to really go down and everybody's going to try to deflate their currency against us. I just don't know how this could end well."

For the time being, though, concerns about inflation were out of investors' heads as speculation grew rampant that the Fed has sent an unmistakable signal that it stands at the ready with as much easing as needed to restart the economy.....read in full

Show Me the Money - Currency Wars and Foreign Currency

The latest musing from cycles guru Martin Armstrong......read here