In truth, the gold standard is already a barbarous relic. All of us, from the Governor of the Bank of England downwards, are now primarily interested in preserving the STABILITY OF business, PRICES and employment, and are not likely, when the choice is forced upon us, deliberately to sacrifice these to the outworn "DOGMA", which had value once, of £3. 17s. 10½d. per ounce.
(John Maynard Keynes, "A Tract on Monetary Reform", London: Macmillan, 1924 (reprinted in 2008 by BN Publishing [dot net]), p. 172 – 173)
Price stability is the ECB’s objective for all prices, except for the price of gold.
For gold, the ECB does not uphold a fixed (price) dogma,
but a freely floating price of gold,
which price is periodically marked to market (-price) (MTM) by the same ECB.
Although it was already being argued in 2002 that the Eurosystem had too much reserves
(Harald Badinger and Barbara Dutzler , "Excess reserves in the Eurosystem – an economic and legal analysis", in: Fritz Breuss, Gerhard Fink and Stefan Griller, (eds.), Institutional, Legal and Economic Aspects of the EMU", (Research Institute for European Affairs Publication Series,Volume 23), Vienna & New York, Springer Verlag, December 2002),
the Freegold process,
the process of MTM-ing the Eurosystem’s gold reserves,
has resulted during the FIRST decade of the Freegold (ECB MTM FLOATING gold price) "experiment",
in gold has risen from 30% to 60% of the Eurosystem's (international liquidity) reserves.
(Gold: The Ultimate Wealth Consolidator
by FOFOA Sunday, July 18, 2010
Can you imagine how excessive the reserves of the euro are now?
The sun is shining on the goldeuro.