Gold Standard By 2014?

In a wide-ranging interview with The Gold Report, Ian Gordon - a user of long-wave analysis as pioneered by Nikolai Kondratiev - predicts that the world will go back to the gold standard by 2014. He sees 2011 as a danger year, like 1931 proved to be. Only this time, instead of a major bank failure resulting in the world going off the gold standard, a major crisis - likely with the Euro - will induce the world to go back on it.

In 2011, we see parallels to 1931 because we're 80 years beyond that time. We believe 20-year cycles are important anniversaries, and this is just four twenties. In 1931, the whole world monetary system effectively collapsed. We've been long anticipating a collapse in the current world monetary system based on the collapse of 1931. However, we see that the current collapse is going to have far more significant and devastating implications than the collapse between 1931 and 1933 simply because it's the collapse of the paper-money system now.

Essentially, paper money is credit money. When paper money fails, credit fails. Effectively, the economy will fail on credit....

I'm pretty sure that we will go back to a gold standard system. Paper-money systems have never survived throughout history. Generally, they've been set around a one-country experiment. And when those have failed, as in France after John Law's paper-money scheme failed in 1720 or the Assignat failed in about 1798, there was tremendous upheaval. And, following these failures, the country resumed gold as the backing for its currency.

So, I think we have to go back to something like that because, in essence, gold enforces discipline on governments. We've seen a complete lack of discipline in the paper-money system that's been ongoing since the 1931 collapse of the world monetary system. Paper-money printing has just gotten out of control; and now, parallel to the paper-money printing is the debt. They go hand in hand.

He says he's been recommending full exposure in gold since 2001, and he recommends full exposure now.