Tags: robert | Zoellick | Gold

Zoellick: Policymakers Shouldn’t Keep Ignoring Gold

By    |   Wednesday, 10 Nov 2010 11:40 AM

Economic policymakers ignore gold’s recent surge at their peril, says World Bank President Robert Zoellick. The precious metal has soared to a record of almost $1,425 an ounce.

"The golden elephant in the room, whether people recognize it or not, is being used (by financial markets) as an alternative monetary asset," he tells CNBC.

“Policymakers need to consider this as an indicator about how markets are viewing their policies,” he tells Bloomberg TV.

To be sure, Zoellick says a column he wrote in the Financial Times earlier this week is being misinterpreted as a call for a return to the gold standard.

“I don’t believe you can return to a fixed exchange-rate system, and therefore I don’t believe you can return to the gold standard,” Zoellick told reporters in Singapore, Bloomberg reports.

“There’s uncertainty about the future of the international monetary system. That’s not saying there should be a gold standard. It is saying that we have a problem that needs to be fixed.”

Flexible exchange rates are the solution, he says.

Many experts see gold as safer than currencies now. "(Gold is) the alternative currency which bankers can't debase," David Roche, global strategist at Independent Strategy, tells CNBC.

He notes that the precious metal can act as a form of protection against systemic risk in the financial sector.

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Economic policymakers ignore gold s recent surge at their peril, says World Bank President Robert Zoellick. The precious metal has soared to a record of almost $1,425 an ounce. The golden elephant in the room, whether people recognize it or not, is being used (by...
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