The dollar's 70-year dominance is coming to an end

http://www.telegraph.co.uk/finance/comment/liamhalligan/10978178/The-dollars-70-year-dominance-is-coming-to-an-end.html

World Bank President considers gold in overhaul of Bretton-Woods

This can't be. The World Bank, the financial bastion of old world economics is touting gold as a reference for currency values. The World Bank isn't some random group of lunatic fringe conspiracy theorists. Historically, they have certainly not been gold bugs--if anything, they have been anti-gold for decades. Now this:

http://www.bloomberg.com/news/2010-11-07/g-20-should-start-work-on-new-monetary-system-world-bank-s-zoellick-says.html

The development of a monetary system to follow on from 1971’s Bretton Woods II will take time, but it’s time to start, World Bank President Robert Zoellick writes in the Financial Times.

This week’s summit of the Group of 20 leading economies in Seoul presents a test of international cooperation offering an opportunity for a key group of G20 countries to agree on parallel agendas of structural reform, Zoellick writes.

The system should evaluate using gold as a reference point of market expectations about inflation, deflation and future currency values, Zoellick writes, noting that while textbooks may view gold as “old money,” markets use it today as an alternative monetary asset.

Is this a further sign the global, fiat-based currency system is on the brink of collapse? This announcement by the head of the World Banks is like the Pope declaring religion is dead.

Who still thinks gold is a "barbaric relic"--because "you can't eat it"? Try eating green paper, and see how that tastes.

Once more--Gold, bitchez!

The crowning failure of old governments

This is a good treatise on why QE 2.0 won't work.

http://www.huffingtonpost.com/garrett-johnson/the-crowning-failure-of-t_b_761500.html

Gold is no longer a fringe asset

http://www.pinnacledigest.com/blog/fastfoot/gold-no-longer-fringe-now-mainstream?#comment-47178

Here's something on price from Ian McAvity, a longtime and respected gold market watcher, in his latest Deliberations on World Markets newsletter: "Gold is about 50 percent above (its) 1980 peak, while total U.S. credit market debt has increased 12-fold and the S&P 500 is about 10X where it was in 1980... it would take a rush to $5,479 to replicate the 1980 peak (I repeat that is not a forecast, it's a technical observation from an overlay of the cycle of the 1970s on the cycle from 2001) Simply put, any talk of a gold bubble is utter nonsense... While the markets toss the inflation/deflation debate back and forth, I believe the key driver of gold is monetary."

And for an even bigger number, I turn to Barry Cooper at CIBC in Toronto. The chart above shows the relationship of the gold price and U.S. government debt. He says that if somehow a new gold standard were to be created, the gold price would have to be $46,000 per ounce if all U.S. government debt had to be backed by bullion. We don't believe that a Bretton Woods II agreement is coming, but for those strict monetarists who support a return to the gold standard, this estimate provides one view on how it could impact gold.

Ron Paul on Bretton Woods

Watch this Ron Paul interview for the full ten minutes.



http://www.youtube.com/watch?v=nppCmEuhgR8

Safe havens

The USDollar has been a safe haven asset since the Bretton-Woods agreement in 1945. To many, it still is, when all other assets decline in value in a risk-adverse investment environment. Don't be fooled by Wall Street's head fakes. The US government's finances are stuck between a hard place and a rock. We are not out of the woods--not even close.

Consider precious metals as a haven. Gold and silver got clocked today, much like every other asset. This is a knee jerk reaction as panic selling kicks in during a liquidity crunch. Cooler heads will re-discover gold and silver are historically reliable stores of value. Precious metals were the first to recover in the 2008 liquidity crisis. They'll be the first to recover in the future. Stay the course. Accumulate on dips, if you can. Go watch a movie, and stop watching the daily fluctuations. Because one day, when the debt crisis turns into a currency crisis, your purchasing power will still be protected.

Two good articles:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ay7aVAKL6qYw

http://www.mineweb.com/mineweb/view/mineweb/en/page33?oid=97226&sn=Detail&pid=1

See disclaimers on the sidebar.

Disclosure: long gold and silver mining shares.