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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Square_Dealings who wrote (75652)	8/29/2001 7:51:03 AM
From: lorne	Read Replies (1) \| Respond to of 116753

LETTERS TO THE EDITOR: Gold has played a role for thousands of years Financial Times; Aug 29, 2001 By HARUKO FUKUDA Sir, In dismissing gold's role as part of the international monetary system ("When the gold standard lost its lustre", August 28), Prof Rudiger Dornbusch overlooks several facts. Gold has played a monetary role for thousands of years whereas the current monetary system has lasted just 30. It is the second largest reserve asset held by central banks and 15 European central banks declared less than two years ago that "gold will remain an important element of global monetary reserves". Throughout Asia and the Middle East (countries comprising more than half the world's population) it is widely used as a means of saving. In western countries opinion polls confirm that the holding of gold promotes public confidence in national governments and currencies. In 1999, when testifying to Congress, Alan Greenspan, the US Federal Reserve chairman, called it "the ultimate form of payment". And the economist Robert Mundell is far from being the only informed voice in its support. If there is one lesson to learn from the changes and problems of the international monetary system over the past two centuries, it is that today's certainty can look highly problematic a decade or so later. Indeed, the internet, with the possibility it offers for private currency issue, may already be developing a new monetary use for gold as an electronic currency. Back in the 1960s, the high tide of Keynesianism, economics undergraduates were taught that classical theories of money supply as an economic influence were dead and that the ideas of an "eccentric" called Milton Friedman, who was trying to revive them, would never catch on. In 30 years' time Prof Dornbusch's assertion will look just as odd. Haruko Fukuda, Chief Executive, World Gold Council, 45 Pall Mall, London SW1Y 5JG, UK globalarchive.ft.com