Many finance ministers and officials of central banks around the world are fed up with the U.S.’s inflationary policies, and QE2 seems to have turned quiet anger into open rage. The issue isn’t the inflation so much as the complete lack of coordination. The U.S. is trying to devalue the dollar on international exchange to boost exports, and to heck with everyone and everything else. The latest protest comes from Robert Zoellick, who writes in the Financial Times of the need for a new global monetary system to stop this cowboy behavior. He even raises the great taboo: gold! (FT is a paid link but this site offers the crucial passages.)
The relevant passage: “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.”
Well, that’s a far cry from a real gold standard, in which gold is not just a metric or “reference point of market expectations” or even a good moved from country to country to maintain trade balances. Under a real gold standard, gold is the money itself, and everything itself is a money substitute. Yes, gold would disable U.S. government imperial ambitions but it would also rein in all over governments in the world. It would be the single greatest change to “force” a restoration of economic freedom.
All of this is explained in great detail in Joseph Salerno’s Money, Sound and Unsound, published this year by the Mises Institute. It is a good book to pick up to understand the latest discussions and debate.