LONDON, 15 August 2011 - BullionVault head of research Adrian Ash was a guest this morning on the BBC's flagship current affairs show, Today on national Radio 4.
"Since 1971 we've seen a succession of ever-bigger credit bubbles," Adrian told Today's seven million listeners, 40 years to the day since US president Richard Nixon cut the link between gold bullion and the value of the Dollar - effectively ending the global Gold Standard.
"Without a limit on the quantity of cash, you've obviously then got no limit necessarily on the quantity of debt. And [these bubbles]...all the way through to the subprime and then the banking crisis...get ever bigger because there's an ever greater quantity of debt which somehow has to be met."
Asked by Today's business editor Dominic Laurie why the Gold Standard fell apart during the 20th century, "Bottom line was the Welfare State," said Adrian, who had earlier been a guest on BBC Radio 5's Wake Up to Money show.
"When you start making promises to the entire population that you'll look after them from cradle to grave you need an awful lot more flexibility in your deficit annually, in your total debt to GDP ratio and so on.
"You can't do that when you have your money supply fixed by what effectively is an arbitrary limit, a quantity of a rare precious metal."
You can listen again to Adrian's interview for one week on the BBC's iPlayer here - scroll to 2 hours 46 minutes.
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