Time for New Bretton Woods?

A Chinese New Year has begun recently. We can expect a new are in Chinese history in this Year of a Dragon. 

 

China will establish a new financial order - this is opinion of Philip Coggan, a journalist of The Economist, who claims that if the trends will not change China will be the strongest economy in 2020.

This growth of Chinese power can be already noticed and even if juan will not become world's main currency, many important changes will be spotted in world's financial order. One of most possible scenarios is establishing a new treaty similar to the one from 1944 in Bretton Woods. After this summit a new world's financial order for coming decades was established.

What is that order going to look like? According to Robert Zoellick of the World Bank quoted by Coggan, new system “should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values.”

We can doubt if American government would agree on such treaty and loose priviledges it has, but in author's opinion in this case another factor on which Americans haven't got any influence - their public debt held mostly by the Chinese.

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The Gold of the Third Reich

Steve Forbes has said recently, that we can expect new American currency in coming five years. What is more, this currency will be, as he predicts, based on gold. If his predictions, and we know that he is much better informed than we are, are true, that means that we will soon find ourselves in very suprising situation. We will realize, that recent few decades, in which the governments were regulary avoiding the connection between currency and any kind of metal money, were completely wasted.

Was it done from the real economical reasons or rather on someones clear demand? Did we start to neglect an old phoenician invention? At the moments of crisis when the ground starts to burn under their feet, it was the gold which was taken by lots of dictators of any kind. This is what for example the wife of former president of Tunisia, Zin el-Abidin Bel Ali, had done, when before she left the country she took 1,5 ton of gold with her. The same thing did the chiefs of the Third Reich, when the Red Army was at the gates of Berlin and it was clear that the war is lost. At the same time from the Third Reich territory “dissapeared” all gold, which was gathered through the years by German National Socialists. Treasures from all over Europe plundered for over six years have gone and nobody knows what hapenned to them. Nobody knows or does not want to know. Untill today Swiss banks still, without recent moral manifests, do not want to reveal how much money can be found on the accounts openned by Hitler and his comrades even before the World War II. 

Nobody knows also, what hapenned with the large part of German submarines. They are simply gone. Soon after the War there were reports about their presence near the South American coasts, but they were ignored. It is possible, that German U-boots with the most loyal and trustful Hitler’s soldiers had left the coasts of Europe with the great amount of gold in order to have a base to construct the Fourth Reich. In time when bancrupting Western states will decide to release a new gold currency, we can timidly claim, that the power and influence would have those who will keep the majority of gold reserves.