Back to gold?

"US Treasury Secretary Janet Yellen has said that economic sanctions imposed on Russia and other countries by the United States put the dollar's dominance at risk as targeted nations seek out an alternative." "But the dollar is used as a global currency for reasons that are not easy for other countries to find an alternative with the same properties," she added. "The dollar's standing as a reserve currency of choice saw a steep decline in 2022 even though its strength in international trade remains unchallenged, according to Eurizon SLJ Asset Management." BI. "As the name suggests, dedollarisation is a term that refers to the process wherein countries tend to reduce their reliance on the US dollar as a reserve currency, medium of exchange, and also a unit of account." India Times. "Central banks are buying more tonnes of gold now than at any time since data began in 1950 and currently account for a record 33% of monthly demand for gold," wrote Ruchir Sharma. "By one measure, the dollar share of central bank reserves is down to 47% from 73% two decades ago, with nearly a third of that decline coming since the start of 2022." Why now? Because, "Astonishingly, 30% of all countries now face sanctions from the US, the EU, Japan and the UK - up from 10% in the early 1990s." "Nations cutting deals to trade without the dollar now include old US allies such as the Philippines and Thailand." Clearly, no nation likes to be bullied and imposition of sanctions by the US if it is disobeyed is humiliating and insulting. But, what is the alternative? "Central banks bought 400 metric tonnes of gold in the September quarter," wrote David Fickling. "There is one obvious factor in common between the declared buyers however: All are from nations facing problems." Turkey added 95.5 tonnes as its lira plunged 52%, Egypt bought 44.8 tonnes as its pound fell by 20% and India bought 40.5 tonnes as the rupee fell by 8.7%. "In a world where you can trust no one, it makes sense to bullet-proof yourself with metal." So are central banks contemplating returning to the gold standard? "The gold standard is a monetary system where a currency or paper money has a value directly linked to gold." Investopedia. "The appeal of a gold standard is that it arrests control of the issuance of money out of the hands of imperfect human beings," "and a society can follow a simple rule to avoid the evils of inflation." But, inflation reduces the value of debt and so helps those with mortgages or car loans, and helps the government to reduce its debt. NPR. When power is in the hands of 'imperfect human beings' they will not want to be restricted by a gold standard. Especially before an election. The dollar is probably safe.