Posted on 08/14/2021 3:01:42 PM PDT by srmanuel
Tomorrow Sunday August 15, 1971 is the 50th anniversary of Richard Nixon closing the Gold Exchange Window that allowed foreign holders of US Dollars to exchange their US Dollars for gold priced at $35/ounce......an agreement that had been in place since the end of WW II.... When this decision was announced it's hard to imagine the impact after 50 years...think of Bill Clinton getting NAFTA passed, repealing the Glass/Stegall Act, think of GWB invading Iraq and Afghanistan, etc....actions by President's have monumental impact over time, when at the time it seemed to be insignificant... Not advocating one position over the other than it's interesting to look back and at the actions of a President 50 years ago that ended up having monumental impact today... Here's another article... http://triplecrisis.com/a-first-default-closing-the-gold-window/#:~:text=%E2%80%9CFirst%20Ever%20Default%3F%E2%80%9D%20Think%20again.%20Forty%20years%20ago,fixed%20relative%20to%20gold%20for%20almost%20thirty%20years.
(Excerpt) Read more at nasdaq.com ...
Seems to me to have been a good thing. Took us back to before FDR’s government overreach. Prior to Nixon’s move, Americans could not own more than one ounce of gold, under penalty of imprisonment, fines and confiscation without compensation. Yet, other countries could gather up American dollars and waltz up to the treasury window and exchange it for gold, any time they pleased. Nixon took us back to the free market exchange of dollars for gold that the Framers intended.
And he replaced it with the Petro-Dollar, until Carter screwed that up with Iran.
At least in theory, being free of the gold standard allowed our politicians to expand and shrink the money supply to meet whatever needs needed to be met at the time.
Unfortunately, our politicians have no interest in shrinking the money supply to increase the value of the dollar.
It was Kennedy-Johnson who thought it could be “Guns AND Butter” in fighting the SE Asia wars. Nixon was facing the fact that Great Britain had gone off of the Gold Standard in the post WW1 period and now the Breton Woods agreement (post WW2 monetary structure) had become an anchor to the US!
What we conservatives FORGET is that Nixon was a RHINO, a near Democrat! He established the EPA with an UNLIMITED goal. He favored much of what the LEFT espoused!
NASDAQ loves this anniversary of FIAT money, it is what gives their traders dinner every nig\ht! For the CITIZEN, it is watching their savings dwindle through inflation!
Nixon’s greatest mistake was normalizing relations with Communist China. That is not debatable. At least the gold standard has pluses and minuses to the argument.
Just realize had Nixon not opened up relations with China, the Soviet Union would still likely exist today.
Well no, it was a disaster. Don’t be fooled. Nixon didn’t have any choice in the matter. Absolutely none. It was either close the “gold window”, or watch Ft. Knox get emptied. Americans (technically) could legally own up to $100 face value in gold coins, or coins with a “recognized collector value”. But gold as money, as a legal unit of account, was illegal.
It was FDR that “outlawed” monetary gold in a meaningful sense. The founding fathers had direct personal experience with funny money and all the ills and debilitating problems it caused. So much so, they forbade “anything but gold and silver” as money in the constitution.
Lesser known - though just as damaging - in addition to confiscating the largest free circulating gold supply in history, FDR also defaulted or reneged on US Treasury gold bonds, and repudiated contract law with respect to long term real estate Leases, often 99 year contracts. Gold clause contracts allowed property owners or anyone else to protect themselves against depreciating units.
The real problem is the “Unit of Account”, as the dollar had a specific definition, so many grains of fine silver. The US was technically on a Silver standard, not gold, until the “Crime of ‘73” (1873, not 1973). Notice we never hear “The yard lost several inches against the meter in heavy measuring yesterday”. Inches, pounds, miles, kilograms, everything has precise definitions. Except money. Weird, huh?
The point being there is no longer and actual defined unit of account. It’s just a “dollar”, digital 1s and 0s that has no value other than it can be used to pay taxes, or debts. Very convenient for some, and disaster for everybody else. As a or “the” world Reserve Currency, the dollar has long enjoyed a special place and artificial demand, allowing the government to export inflation. I think it was Arthur Burns, a past Treasury secretary around the time of Nixon or Ford, who quipped “It may be our dollar, but it’s your problem.”
And OSHA
What we conservatives FORGET is that Nixon was a RHINO, a near Democrat! He established the EPA with an UNLIMITED goal. He favored much of what the LEFT espoused
____________________________________________________________
...and OSHA and AA and the Eventual Elimination Of Caucasians and the recognition and opening of trade with the ChiComs and Title IX and the 18 year old vote....
While there are some upsides to Nixonian policies, they have also caused a great many of the problems we are faced with today.
Yep we ally with the Soviets to defeat the Nazis. Then we ally with the Chinese to defeat to Soviets. Who are we going to ally with to defeat China?
“Nixon didn’t have any choice in the matter. Absolutely none. “
Indeed. If we had kept the gold standard, by the end of the 1970s all of our gold would be sitting in Saudi banks having been used to pay for oil.
We then would have been forced off having run out of gold.
Fiat has enabled the non-stop trade imbalances and destruction of the middle class to the benefit of wall street.
ICBW, but I believe it helped extend the life of both communist nations. Had we not recognized China, I believe that a long, debilitating war would have ensued between them. Moscow and Beijing did not like each other very much.
Very good analysis. Thank you. Ethical leaders promote credit and unethical leaders promote debt. Thankfully the Founding Fathers promoted credit.
I had a very personal experience with that decision. My homeport until December 1970 was Yokosuka Japan. Under Bretton-Woods the yen was 360 to the dollar. I also had liberty in Hong Kong and Singapore and experienced similar exchange rates. I would put down a hundred-dollar bill at the exchange in Yokosuka and get back a stack of 5,000 and 1,000 yen colored notes I could barely hold in one hand. I had no problem spending that funny money.
Maybe we need to go to the “brick of 22 LRs” standard of currency. Or “Box of 9 mm” standard.
Before this we hardly ever heard the word “inflation” uttered around our house.
Tricky Dick gave us a lot of “gifts” like EPA, OSHA and so forth in addition to being “I am not a crook”.
Great guy. I think he was psychotic.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.