Sergio Ermotti Quotes
We don't really believe there's much room for the creation of new currencies if there is no real backing for a hard and credible issuer of that currency.
Ermotti, Sergio. Interview by Arjun Kharpal. CNBC, NBCUniversal, 23 Oct. 2017.
At the time the United States was on the Gold Standard and all our money was backed by gold. Root and others were afraid that a Federal Reserve Bank, a proposal that was being debated in Congress, would cause a large amount of paper money to be printed which other nations would obtain through trade and then exchange that for American gold—a process which would deplete the American gold supply. A few years before, William Jennings Bryan had argued that the Gold Standard did not allow America sufficient ability to increase the money supply to serve the growing population and economy. See {640992}.
Describing the currency situation of the country:
The assumption was that money would always be backed by gold or silver. In effect, raising or allaying the money was to change the amount of gold or silver that a particular denomination of money would be able to be exchanged for. This is one of the interesting proofs that these processes did nothing economically—for if they could, no one would want the money. This has always been a weakness or a strength—depending on one’s political point of view—of a gold standard.
When gold and silver were used to make coins, there were dozens of schemes to cheat people. Many of these would be implemented by the official mints (makers of coins) often with the connivance of the ruler who would often get a cut. Davanzati warned princes against debasing the coins on moral as well as pragmatic grounds.
This is a remarkable quotation in that it proposed exactly what the United States did in the Nixon administration. We went off the gold standard and backed American money with the wealth and “full faith and credit” of the nation and all its assets. It has been the strongest and most sought after currency in the world despite the fact that it is not backed by gold or silver as earlier American currency was.
This was a very astute prediction. At the time, the United States gold mining production was second only to South Africa and American currency was based on the gold standard which seemed to all to be permanent. Half a century later, the U. S went off the gold standard.
Sergio Pietro Ermotti is a Swiss investment banker and former stock trader. He was the chief executive officer (CEO) of UBS Group AG between November 2011 and November 2020. Ermotti is slated to succeed Walter Kielholz as the incoming chairman of Swiss Re, Switzerland's largest reinsurance company, in 2021. He previously served as the deputy chief executive for Italian bank UniCredit, from 2007 to 2010.
