Gold Is Going to Play a Role in a New Monetary System

by Jan Nieuwenhuijs

The whole world is now in the same boat. There are low interest rates everywhere, and all continents print money.

Gold Is Going to Play a Role in a New Monetary System | BullionBuzzThere are flaws in fiat money. It can be printed without limitation, which is politically too tempting. Money printing was used to save the financial system in 2008, but since then nothing has changed. In the next crisis, paper money will fare badly, and there will be significant inflation.

Gold is a hard currency. It can’t be printed. It is divisible, and it does not perish. It retains its purchasing power in the long term. Gold, as the centre of the monetary system, will be more stable in terms of purchasing power in the short and medium term. Keeping a portion of your savings in physical gold means protection from economic shocks. If a currency falls, gold rises, so purchasing power is maintained.

Something must happen in the international monetary system. It cannot stay centred around the dollar. Since 1971, when the dollar detached from gold, the US has had an exorbitant privilege. Most trade in the world is settled in dollars. Therefore, there is a huge demand for dollars in the world, and the US can simply print them.

In the new system, gold will play a role. Look at Europe: the Netherlands and Germany have taken back their gold from the US. Austria and Belgium are also repatriating. Russia and China buy a lot of gold. The Chinese have too many dollars in foreign exchange reserves, and are at the mercy of US policy whims. The transition to a new system will be gradual. No one wants a shock.

If there is a new financial crisis, we must know the truth. That’s why Nieuwenhuijs is pushing the Dutch central bank for the audit reports and gold bars list to be publicly released, but those requests are up against a lot of resistance. What is there to hide?

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