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Daily Telegraph: Gold to Shine on 40th Anniversary

LONDON, 8 August 2011 - Comment and analysis from BullionVault economist Ben Traynor feature extensively today in a report on the 40th anniversary of the end of the Gold Standard published in The Daily Telegraph, the UK's best-selling broadsheet newspaper.

"As we know, it didn't work," says Ben of the post-WWII currency system, known as Bretton Woods, under which the US Dollar was redeemable for gold, and all other currencies were redeemable for Dollars.

"Central banks tried for a while to keep the gold price in line with the $35 peg. They set up the London Gold Pool, whereby central banks co-ordinated sales to keep the price down if it looked like getting too high."

But with the world "awash with Dollars" thanks to spending on the Vietnam War, "This exacerbated the gold drain from the US - as did the existence of a two-tier market after the Gold Pool collapsed in 1968 - and culminated eventually with Nixon closing the gold window in 1971," Ben explains to The Telegraph's commodities and Questor columnist, Garry White.

Here in 2011 - and as a result of the end of Bretton Woods - "Many now argue that the Dollar as a global reserve currency is doomed because of the level of debt the country is unsustainable," writes White.

"China's call for a new global reserve currency over the weekend is a sensible proposition - but until then investors world wide will continue to view gold as the ultimate safe haven to escape devaluing paper money."

You can read Ben Traynor's extensive quotes in The Telegraph's story here...

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Daily Telegraph