Yes I read that sometime ago. Perhaps the bullion banks will need to keep it at today's price (around $500) or face a liquidity crisis, which would cause a run on the Banks like happened in 1973, when the Gold price first took off and several second line Banks folded. Today's Banks though are a great deal bigger, though no less prone to the same mistakes.
The Arab Banks have been mooting a pan-islamic currency backed by Gold for some time, and the Iranian Oil Bourse with prices quoted in Euros could be a first step. Of course this would give them stronger leverage with more European nations using it. But it would remove some of Gordon Brown's power to influence events here in the UK., and thus jeopardize his efforts to ensure he gets elected. When that happens (his election that is) perhaps we will see a conversion on the road to Damascus as the saying goes...
A Gold backed currency would mean stable oil prices in the chosen currency, but the Dollar (and pound too perhaps) could go into free-fall. So America will do all it can to prevent that, including diplomatic and sabre rattling if necessary.
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