Gold currency will return

THE EDITOR, Madam: FORTY PER cent of United States oil rigs are offline. Vietnam, Chad, Brazil, and members of OPEC are cutting output of oil. About 50 million barrels of oil are going into storage a week. Land-based storage is expected to finish by the end of May. This means that there will be an oversupply of oil for at least a year because if the world’s economy opens up, it will be slow and uncertain.

Oil was the most traded commodity (about four per cent of world GDP). The US is the worst hit, both by the oil collapse and COVID-19. US shale oil was not making a profit, but based on cheap loans and with the demand for oil plummeting, this is not sustainable.

In 2018, central banks of the world reserve in gold reached a 50-year high. In 2019, central banks increased their gold purchase by 17 tons. Russia, China, Poland, India, Hungary, Turkey, and Kazakhstan are some countries buying gold. In 2017, Germany completed its repatriation of $31 billion worth of gold bars from New York and Paris. In February 2020, the world’s central banks bought 36 tons of gold, which is a 33 per cent increase from January 2020 purchases. They know a global-changing event is imminent, and gold is the best security.

ECONOMIC SYSTEM IS CHANGING

I am sure the world will go back to a gold currency, which we left in 1971 when the US abandoned the gold standard. I am not sure when, but I think it will be within a decade. This month, China launched its digital currency for domestic use which is expected to be ready for international money transfer by July 2021. This system is cheaper and independent of the US-dominated SWIFT (Society for the Worldwide Interbank Telecommunications) money -transfer system.

Spain economic affairs minister announced plans to implement universal basic income and intends to make it permanent.

The world’s economic system is changing. We must either strategically adjust and capitalise or become victims of the more powerful nations.

BRIAN ELLIS PLUMMER