The president of the World Bank confirms he advocates a return to the gold standard

As discussed yesterday, Zoellick, the president of the World Bank, never really intended to suggest a move to the gold standard. He's at the World Bank. It means he believes government should control and provide the currency, and that they should inflate to provide growth — in a pure Keynesian or Monetarist tradition.

Nov. 10 (Bloomberg) [...] Zoellick said in a column in the Financial Times earlier this week that Group of 20 nations should consider using gold as an international reference point of market expectations about inflation, deflation and future currency values as they reform the global monetary system.

“Gold is the yellow elephant in the room,” Zoellick said today. “Markets are already using gold as an alternative monetary asset because confidence is low. Policy makers need to consider this as an indicator about how markets are viewing their policies.”

Zoellick said today his call for the use of gold as a reference point is not one that advocates a return to the gold standard. After his Financial Times column, Reuters said Zoellick was suggesting the adoption of a “modified gold standard” while Agence France-Presse described it as a call on G-20 nations to bring gold back “as an anchor to guide currency movements.”

“I don’t believe you can return to a fixed exchange rate system and therefore I don’t believe you can return to the gold standard,” Zoellick told reporters in Singapore today. “There’s uncertainty about the future of the international monetary system. That’s not saying there should be a gold standard. It is saying that we have a problem that needs to be fixed.”

Over time, countries need to be able to have flexible exchange rates, the former U.S. deputy secretary of state and chief trade representative said in the interview.

This statement is as silly as saying that "in order to foster growth, countries need to have a flexible metric system, or a flexible weighting system". Today, 1m is going to be 3 feet, and tomorrow, we'll inflate it to be 3.1 feet. Does that make sense? No. Yet, people have been brainwashed into believing that printing money and debasing the currency — the exact equivalent of saying that today one kilogram is now 1,100 grams — is the solution to our problems.