Brenton Woods revisited

9.11.10

World Bank chief Zoellick has mooted the idea of a Gold standard.I n the late 40s, as per Brenton Woods agreement, the value of the US Dollar was pegged to 35 per ounce of gold and the $ became the world's reserve currency. Most countries pegged their exchange rates relative to the $.This arrangement went haywire post Vietnam war in the 70s.

The new arrangement envisaged by Zoellick involves a basket of currencies that includes the USD, Euro, Pound ,Yen and Yuan. One fervently hopes that in one's lifetime the INR will figure on this podium.

As much as the new order recognises a basket of currencies, in keeping with global realities, it would make similar sense to peg this against a basket of commodities: Gold, Oil, Silver, Copper, Lithium and probably Uranium.