Leading economies should consider readopting a modified global gold standard to guide currency movements, said World Bank president Robert Zoellick.
Writing in the Financial Times, Zoellick said a “Bretton Woods II” system of floating currencies is needed to replace the Bretton Woods fixed-exchange rate regime that broke down in the early 1970s.
Zoellick called for a system that “is likely to need to involve the dollar, the euro, the yen, the pound and (yuan) that moves toward internationalization and then an open capital account.”
He added: “The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values.”
Gold powered to a record high at $1,398.35 an ounce on Monday, and silver hit a 30-year peak, on concerns of a continued weakening dollar trend after the Federal Reserve last week acted to resume buying Treasurys.