World Bank president Robert Zoellick has called on bickering G20 nations to bring gold back into the global monetary system as an anchor to guide currency movements.<\/p>\n
Ahead of a Group of 20 summit this week in Seoul, Zoellick said an updated gold standard could help retool the world economy at a time of serious tensions over currencies and US monetary policy.<\/p>\n
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.<\/p>\n
The new system “is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi (Chinese yuan) that moves towards internationalisation and then an open capital account”, he wrote in Monday’s Financial Times.<\/p>\n
“The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values,” Zoellick said in a commentary piece.<\/p>\n