Is a new gold-standard part of the solution ?
The gold price continues to climb. On a log-scale, gold (in USD) is on a steady upward trend, with some corrections on the way.
This could imply several things (some probably simultaneously):
confidence in thebanking systemremains weak
confidence inpaper moneyis weak
confidence in futurecentral bankpolicy is weak
The other possibility (the Roubini thesis) is that gold is just abig bubble(a bubble which has been lasting for several thousand years according to Soros). I cannot believe a bubble would for more than 100 years, but anyway.
I am just wondering: if people all over the world are buying gold today because they fear the value of paper money, the solution is not to make people afraid of gold. The solution is to give the stability of gold to paper. This is some form of gold (or gold combined with something) standard. The former golden standard is supposed to have had many inconveniences. The biggest would have been :
1. thatpoliticianscould not manipulate its price
2. it could not be produced out of thin air, but production waslimitedto a small amount per year
3. it imposeddiscipline(to the banking system).
Now looking at all these "inconveniences", you could ask yourself the question whether gold is not part of the solution for future financial stability.