A Return to the Gold Standard

James Rickards, author of Currency Wars, argues for a return to the gold standard. He claims that today's attempts to devalue currency and rid debts by inflation will ultimately lead to the collapse of the dollar and lead the world into "the mother of all financial crises." Of course, it's not surprising that Rickards' proposal has seen its share of criticism. Nouriel Roubini, the American economist who predicted the 2008 banking crisis, is only one of many who wonder why Rickards wants to return to the very thing that was a major cause of the Great Depression. Other criticisms mention that Rickards' solutions limit the flexibility of the Fed. Barry Eichengreen of UC Berkeley argues that a return to the gold standard would "prevent the Fed from taking emergency action to forestall disaster." He makes an interesting analogy of the situation--"There have been some undesirable side effects to what the central banks did, but radiation therapy has undesirable side effects, too. But if the alternative is to kill the patient, it's better to suffer the side effects."

http://uk.reuters.com/article/2011/11/27/uk-markets-currencywars-idUKTRE7AQ0AX20111127