From Financial Times:

Mr Zoellick, a former US Treasury official, calls for a system that “is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi that moves towards internationalisation and then an open capital account”. He adds: “The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values.”

His views reflect disquiet with the international system, where persistent Chinese intervention to hold down the renminbi is blamed by the US and others for contributing to global current account imbalances and creating capital markets distortions.

Krugman Responds:

So Robert Zoellick wants us to return to return to a modified gold standard. Brad DeLong pronounces him the stupidest man alive; that’s much too kind.

And Forbes throws in its two-cents:

While Zoellick’s statement doesn’t directly call for a return to the gold standard, it is echoing a growing concern regarding the status of the dollar as the world’s reserve currency.  So-called currency wars have taken center stage in the last few G-20 summits of world leaders, as accusations of currency manipulation and unfair currency debasement have been flung around from the U.S., China, Japan, Germany, Brazil and others.

After the Federal Reserve announced plans to purchase another $600 billion in U.S. Treasury debt last week, further depressing the dollar’s value, other nations have questioned the intent of Chairman Ben Bernanke’s quantitative easing.   Germany’s finance minister Wolfgang Schauble called the policy “clueless.” He noted the inconsistency of accusations the Chinese are manipulating exchange rates, while American economic policy is artificially depressing the dollar by printing money according to The Associated Press.

What do you think? Will the dollar be removed as the international reserve currency? Is it time to denationalize currency and bring about free banking, or implement the gold standard? Or must we maintain the status quo?