Gold surged 8% yesterday (as is the norm, the far smaller market that is silver surged by even more and was up by 13.3%) as the shock Federal Reserve announcement led to concerns regarding the dollar and the inflationary implications of massive money printing and debasement of the currency.

The dollar has fallen sharply against all currencies and particularly against the finite commodity and currency of gold which cannot be debased. In just two days the dollar has fallen from below 1.30 (EUR/USD) to over 1.37 (EUR/USD) despite concerns regarding the European economy.

Concerns about the dollar are justified and real. This is likely no short term weakness in the dollar indeed the dollar’s status as the reserve currency of the world is increasingly coming into question in an increasingly multipolar world.

Next week’s G20 Summit will hear calls for a new global reserve currency. China and other emerging nations back Russia’s call for a discussion on how to replace the dollar as the world’s primary reserve currency, a senior Russian government source said on Thursday. Russia has proposed the creation of a new reserve currency, to be issued by international financial institutions (see News section today).

And this idea is not just coming from US competitors or potential adversaries.

A U.N. panel will next week recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies adding to pressure on the dollar (see News section today).

Former Head of Currency Research at JP Morgan Avinash Persaud, a member of the panel of experts, told a Reuters Funds Summit in Luxembourg that the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket.

Persaud, chairman of consultants Intelligence Capital said the recommendation would be one of a number delivered to the United Nations on March 25 by the U.N. Commission of Experts on International Financial Reform.

This is of great importance and has profound implications for the current international monetary system and for the dollar. With central banks and sovereign wealth funds likely to be diversifying out of dollars and into other currencies, into a possible new global currency and into gold, gold is likely to remain in a bull market for the foreseeable future.