The Secret Return to the Global Gold Standard !

• The Secret Return to the Global Gold Standard ! 
  by Money_Morning, via http://www.marketoracle.co.uk/
  Although it happened more than 40 years ago, manyAmericansstill  rue the day back in 1971 when U.S. President Richard M. Nixon effectively took this country off the so-called “gold standard.”
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  Under a true gold standard, paper notes are “convertible” into  pre-determined, fixed quantities of the “yellow metal.”
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  What actually happened back in 1971 was that President Nixon – facing  huge budget and trade deficits, and a plunging dollar – enacted a series of  economic moves, including the unilateral cancellation of the direct  convertibility of the U.S. dollar into gold.
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  By slamming the “gold window” shut, Nixon also brought down the curtain  on the existing Bretton Woods system of global financial exchange. The fallout was immediate, creating a situation that financial historians  still refer to as the “Nixon Shock.”
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  Proponents of the gold standard say the real damage is still being  wrought: That decision four decades ago led directly to the uncertainty,  volatility and irresponsibility that we see in the U.S. economy and global  financial markets today. Whether you agree or not is a topic for another time.
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  But what I’m here to tell you today is that the world’s central banks  have quietly – almost secretly – returned the world to a new version of the gold  standard.
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  Back in 2010, the world’s central banks became net buyers of  gold for the first time since 1988. Buying ramped last year and net purchases  exceeded 455 metric tons (tonnes). That was the largest net purchase since  1964.
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  But the world’s central bankers will handily eclipse the  2011 totals here in 2012: They will  purchase a projected 493 metric tons this year as they expand reserves to  diversify away from the U.S. dollar and protect their countries’ economies  against inflation, Thomson Reuters GFMS said. And  GFMS said you can expect central banks “to remain a significant gold buyer for  some time to come.”
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