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In Which Bob Zoellick Makes His Play for the Stupidest Man Alive Crown

The last thing that the world economy needs right now is another
source of deflation in a financial crisis. And attaching the world
economy's price level to an anchor that central banks cannot augment
at need is another source of deflation--we learned that in the fifteen
years after World War I.

Which is why Bob Zoellick says that we need it.

Alan Beattie watches the intellectual train wreck:

Zoellick seeks gold standard debate: Leading economies should consider
readopting a modified global gold standard to guide currency
movements, argues the president of the World Bank. Writing in the
Financial Times, Robert Zoellick, the bank’s president since 2007,
says a successor is needed to what he calls the “Bretton Woods II”
system of floating currencies that has held since the Bretton Woods
fixed exchange rate regime broke down in 1971. Mr Zoellick, a former
US Treasury official, calls for a system that:

is likely to need to involve the dollar, the euro, the yen, the pound
and a renminbi that moves towards internationalisation 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.... Although textbooks
may view gold as the old money, markets are using gold as an
alternative monetary asset today.”

They do not. They simply do not. That is not true. Markets are using
gold as a speculative asset and a hedge. They are not using it is a
medium of exchange, a unit of account, or a safe store of nominal value.

He really may be the Stupidest Man Alive.

Alan Beattie politely says:

Although there are occasional calls for a return to using gold as an
anchor for currency values, most policymakers and economists regard
the idea as liable to lead to overly tight monetary policy with growth
and unemployment taking the brunt of economic shocks...