Jim Rickards: Zoellick has legitimised the gold debate

In Part II of an earlier interview, Jim Rickards, Senior Managing Director for Market Intelligence at Omnis, speaks to Eric King about the last few incredible days in the world of international finance:

They warm up by discussing planned US Army exercises, which apparently are going to be based on the collapse of the dollar and how the Army will deal with the riots and the associated public disorder, which they would expect to take place on the streets of continental America.

They then moved on to the beef and debated Robert Zoellick, the eleventh president of the World Bank, and Zoellick’s recent thoughts on reintroducing a gold standard.

Rickards thinks that this momentous intervention lends an air of legitimate respectability to the debate on the use of gold to help recreate honest money from out of the dishonest paper fiat standard that the world’s governments have spent hundreds of years trying to steer us towards.

“You cannot just snap your fingers and go back to a gold standard,” says Rickards. He estimates it took thirty years for the EU just to build up to the Euro and then ten years to technically implement it, even with the many flaws which are now plainly evident within its roll out, especially to the Club O’Med countries.

[I think that we could move much more quickly to a gold standard than that if we simply legitimised private gold and silver monies, allowed currency competition with state fiat monies, removed government monopolies on the production and distribution of money, removed all taxes and legal restrictions from the use of private gold, silver, and copper monies to satisfy contracts, and simply got government out of the way of money, but that is a debate for another day.]

Rickards thinks the price of gold per ounce is a difficult hurdle to cross for the world’s financial authorities and could easily be $5,000 dollars an ounce, with the actual percentage of currency backed by gold being the second major hurdle. However, he does think that now Zoellick has spoken from the nascent world government’s Mount Olympus, that other lesser state monetary gods will now feel capable of expounding upon the subject, without the rest of the banking establishment deriding them.

What does surprise Rickards is the speed at which things are falling apart with the global fiat monies, with Gordon Brown wasting billions of pounds by selling off gold a few years ago, through to the World Bank now recommending that gold be used as the new basis of the world’s monetary system.

[Plan B, it seems, is to return to the gold standard, as it may have been all along, despite all of that talk of the irrelevance of gold, in 1971, which Nouriel Roubini was still going with when I last looked.  What is interesting, of course, is that if gold was so irrelevant, why did so many central banks hold on to so much of it for all of these years, assuming of course that it hasn’t all been ‘lent’ out under encumbered titles to keep the gold price down.  Why lend it out to keep the gold price down, if it was so irrelevant? And thereby hangs a tale.]

In this fairly long King World News interview, which runs to 20 minutes, Rickards and King discuss much else of relevance, and the whole interview is well worth a listen.