Gold Standard Should be Considered Again Says World Bank President

In what can only be a nod toward the true weakness to the global economy, World Bank president Robert Zoellick said major economies should considered reinstating a form of the gold standard again.

In an editorial in the Financial Times, Zoellick said countries should look at floating currencies, with gold used s a means of measuring the exchange rates.

Zoellick said what he's thinking is the new system would "likely to need to involve the dollar, the euro, the yen, the pound and (a Chinese yuan) that moves toward internationalization and then an open capital account.

"The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values."

As expected, there wasn't a positive response to the idea from those responsible for policy, as it would undermine their ability to spend in any way they choose to, which has led to the economic global crisis we face today.

In other words, a true gold standard would force austerity and politicians to spend within certain parameters. That would mean they can't buy votes from the clueless electorate who don't understand what's going on.

All honest people are acknowledging the problem as described by Zoellick, but aren't willing to take the steps needed to curb the out of control spending the socialist leaders and countries have been participating in for decades, and which has finally caught up with them.

As Margaret Thatcher said in the past, the problem with socialism is you eventually run out of other people's money. That time has happened, and just lowering spending to deal with the current circumstances isn't near enough to take care of it. A band-aide will never do.

Competing currencies and a gold, and possibly other precious metal standard, which could include silver or other metals, would go a long way toward dealing with politicians that continue to break into the future piggy bank of our children and grandchildren, which we no longer are able to afford.

Gold Prices Fall off Cliff to Under $1,200

Gold prices corrected big today, dropping as much as $46.45 at one point to $1,197.19, a 3.7 percent plunge.

Most of this is on continuing weak economic data and news, which is another way of saying investors are concerned over deflation at this time, rather than inflation, which is one of the major, underlying reasons for gold prices going up.

Depending on the economic news today, we could see another sell-off in gold, and gold prices will plummet again if that's the case.

It doesn't matter though, as nothing in the fundamentals for gold has changed, and even if we have a couple more days of dropping prices, they'll definitely come back, and probably even stronger, as central banks and governments have ignorantly confirmed they're going to use quantitative easing (printing more money) to keep their respective economies from entering into another recession.

Printing money is also a good sign for gold investors, as it debases currencies and sets up gold as the safe haven of choice and ultimately the best place to be when inflation soars from the endless printing of paper currency. It's not a question of if, it's only a question of when.

So deflationary fears will result in the unfortunate printing of more money, which will result eventually in gold prices surging to new record-breaking levels.

Gold Futures Crushed as Investors Go to Treasurys

Investors today, who have been extremely fickle lately, have chosen to go to Treasurys as a place of safety rather than gold, driving the price of gold today down by $34.70, or $1,207.70 an ounce, as of 1:03 PM EDT.

Economic data has painted a ominous portrait of economic conditions, and it's weighing strongly on investors.

Uncertainty about inflationary or deflationary pressures also influences the price movement of gold on a daily basis, as economic data and reports have it potentially going either way, or at least it's perceived in that way.

One thing most people agree on, is the alleged economic recovery isn't, and it's increasingly doubtful as to whether or not we've ever left the recession, only having temporary respite because of massive amounts of money being infused into the economy from government policies.