The relevance and importance of Gold in the World Monetary System

What follows is a well articulated article that explains exactly what the title suggests: Gold’s place in the World Monetary System.  It was written by R. Peter W. Millar of Valu-Trac in May 2006, which makes it all the more prescient under today’s monetary conditions. 

What the gold price is telling us today is exactly what Mr Millar suggested back in 2006:  ”Gold, which is the only widely accepted means of exchange that cannot be destabilised by man, will adjust in price to reflect disorder in man-made money.” The upward adjusment in gold price taking place in terms of all paper currencies of the world shows that paper money is being debased, i.e. printed.  Gold is stable, paper money is unstable.   Gold is the canary in the coalmine.  Gold is once again acting as a central nervous system to the world’s monetary system after the world’s major central banks have been de-linking their paper currencies from gold – in the process grossly undervaluing the gold price.  This has had a similar effect as daily morphine injections would to a person over many years, solving symptoms not causes, which is inevitably fatal.  It acted to prevent pains and pressures in the global monetary system from being reflected in bond markets or the gold price.  


About the author

Peter Millar CA founded Valu-Trac in 1985. Previously he was the Senior Investment Manager of the Bond and Equity Department of Abu Dhabi Investment Authority (1977–1984). Prior to that, he worked at Touche Remnant in London (1970-1977) and Alliance Trust in Scotland (1963-1970).

He can be contacted at or +44(0)1343 880217



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