The president of the World Bank talks about gold as an alternative monetary asset

Of course, I would die to see us back on the gold standard, but I think I couldn't come with better words than Babak over at Trader's Narrative:

Today’s Op-Ed piece by Robert Zoellick, the president of the World Bank, got a lot of media attention. If you happened to actually read his words, instead of all the thousands of articles written about what he wrote you’d discover that he mentioned gold in passing after a list of five proposed strategies ahead of the G20 meeting.

But of course, his casual mention of gold got all the attention. His remarks however were aimed at averting what is shaping up to be a competitive currency devaluation scheme:

Fifth, the G20 should complement this growth recovery programme with a plan to build a co-operative monetary system that reflects emerging economic conditions. This new system is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi that moves towards internationalisation and then an open capital account.

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.”

The media's reaction to this very basic and simple statement is just another proof of how much over bullish speculators have become about gold and how much sentiment is extreme.

Let's also remember that Barron's, of the best contrarian indicators of the financial press, just ran a cover titled A Golden Era for the Yellow Metal. For those who are not aware, Barron's had a 2001 cover about how gold would fall into oblivion and helped Robert Prechter become bullish on this sacred metal.