Lets make the case. Sovereign Gvt Debt is used as a reserve for $ 710 Trillions of derivatives. When that balloon goes POP, what props up the derivatives? Gee what do we have here we can use for reserves ? Banana's?
Quionua? Tomatoes ? NAW, all too perishable. Maybe LUMBER? How about Marble ? They wont rot........hmmm Naw.......OIL, maybe OIL? OK, sour crude or sweet API 40 ? What will "GOOD DELIVERY OIL" look like? Will central banks trade it amongst themselves?
Gee if there were only enough Silver and Gold. Duh....... What we have too much of, and are awash in, is currency, digital, paper, debt etc. So as J.P.Morgan, ya know the REAL GUY, said, GOLD is MONEY, everything else is credit (debt). WoW, now that was a FLASH ! So gold, @ USD 100 per OZ overvalues the U$D and undervalues GOLD. NEWS FLASH, GOLD Values Paper.
Ok, lets move forward. So Gold @ 1,000U$D per oz, overvalues U$D and undervalues GOLD. OK, lets try this AGAIN, only this time, lets use the system that JIM SINCLAIR let out of the bag last year: INTERNATIONAL RESERVE CURRENCY VALUATION PEG. Gold starts out, trading @ 10,000 U$D per OZ, trading amongst Central Banks bidding on it through a SUPPLY & DEMAND algorithm calculated via an independent 3rd Party whose integrity is guaranteed by all the member banks( do you think they trust each other?LOL).
There is a Limit UP and a Limit DOWN daily. No gold is traded outside the IRCVP system, but gold dealers are free to trade it where they want. Currencies are thus linked to gold by their respective countries and are bought and sold thru FOREX reflecting these values and the trade balances thereof.
NOT ROCKET SCIENCE and very mundane in this day and age of computers.
IMO, Sinclair let this out of the bag, as he knows it WILL be the way, as it is the ONLY WAY it can be to maintain world trade, and finance as we know it.
Again, IMO > all the yapping lapdogs of the finance establishment can howl to their masters hearts content, but in the final analysis, nothing will stand, except GOLD, to be the foundation for the new system that will be necessary to re-kindle the fires of trade, and to float the boats carrying the goods to and from our respective countries.