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.”
“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.
Very good analysis. Thank you. Ethical leaders promote credit and unethical leaders promote debt. Thankfully the Founding Fathers promoted credit.
Indeed. That's why gold is considered a storage of wealth. The government can't tell you that the one ounce gold coin in your hand now only weighs one-half ounce.