Ray Hendon

Prelude to April's G-20 Meeting: Showdown at the London Corral

I suggest a wider reading of the state of the world economy after WWII and the role Bretton Woods played in helping re-establish it. And, like it or not, it was the last system we had and still have, until now.

The IMF and the World Bank, both came out of Bretton Woods, and they have served their purposes well, and their role will probably be expanded after the G-20 meeting.

I also suggest a closer study of the capability of a gold standard with regard to world liquidity needs. Inflation occurred long before gold was a backing for currency, and the huge price fluctuations generated by gold discoveries over history is a testament of how horrid the system was. We got off of it for very good reason, and world trade has flourished as never before.

Inflation is the result of political and economic decisions made by our monetary authorities. Sometimes they are well intentioned, and sometimes not. But living in the straight jacket of gold would be much worse for world trade. Romanticism is never an answer to problems, it is only an irrational wish to have things be better by having some magical wand to wave. Gold is not magic, and waving it around will not solve any of the world monetary problems we have now or ever will have.

Best wishes,

Ray