The interpretation of the film is clear. Dorothy (Everyman American) is lost in a (financial) storm. She is joined in her endeavors to find a solution by the Scarecrow (farmers), Tin Man (industrial workers), and Lion (pro-silver politicians). The Yellow Brick Road (gold standard) takes her some of the way there. However it leads to the Emerald City (fiat currency), with its false tricks and delusions. The answer to financial salvation lies in her ruby (silver) shoes. Of course the Wizard (President) was a fraud, his gifts were shallow, and much of what he said was fantasy. The message is clear at its simplest level—we have the power within us by clicking our heels to make the changes we need. At a deeper level we are urged to move beyond the constraints of a gold standard to make the economic changes necessary for growth—in this case silver.
Bretton Woods was devised precisely to prevent the sort of economic conditions that we suffer today. Excessive leverage, and politicians who lack the courage to give us what we need rather than what we want. This safety net was abandoned 40 years ago. The solution to today's problems is not, in my opinion, to head back down the yellow brick road and reintroduce a gold standard, although it might play a role in the solution. The gold market is insufficiently large to sensibly play that role by itself.
In 1942 John Meynard Keynes conceptualized and the UK proposed that the IMF introduce the "Bancor,” a supranational international currency used for trade and exchanged by barter. It could play a parallel role as the global reserve currency and, it would be backed in part by gold and other hard commodities.
In 2008 the governor of the People's Bank of China suggested Special Drawing Rights at the IMF as an alternative solution.
Whatever the solution —a Bancor (backed by gold), SDR's, or even silver slippers—the time has come to put global reserve assets on the IMF agenda. The US dollar suffers from a dilemma whereby short term domestic issues conflict with longer term international concerns.
This needs to change.
Ross Norman is the owner and chief executive officer of the London-based gold broker Sharps Pixley Ltd.