The Americans have nothing backing their currency, and never have. It is backed by good faith, and the biggest global economy and currency by a long, long way; which is why they can print out $1.5t of notes and it be a drop in the water with regard to inflation. Ours used to be backed by gold, bonds and good faith, now it is backed by bonds and good faith/
It was wise to sell the gold; because we don't need to worry about people ever questioning the value of the GBP. It is not like we are a random African or Eastern state who has no implicit backing to whatever they print. Anyway, we'll be using the Euro long before we are ever able to deteriorate to the stage where people would question our value.
What was unwise was to announce he was selling it, and then trickle it out. We sold so much it devalued the gold as we trickled it out. Not to mention, he sold it for $200, and it is now trading at $850. However, there was no way to predict the credit crunch and the money pouring into safe gold, so he can't be blamed for not forseeing that. However, he can be blamed for selling it all so quickly.
