” You can thank tricky Dick for inflation when he took us off the gold standard. I hardly remember inflation mentioned before that. “
Inflation had already been a problem for at least a decade before Nixon closed the gold window in 1971. It just wasn’t as visible as it became after Nixon.
Inflation is why silver was removed from American coins after 1964 and silver certificates were removed from circulation. The value of the silver exceeded the face value of the money.
The root of the inflation was something called the Triffin Dilemma, a problem caused by the dollar’s role as world reserve currency. It would have been necessary to contract the American money supply to defend the value of the dollar, but neither Kennedy nor Johnson nor Nixon were willing to endure the hard recession that would follow.
One result of all this is that there was a dual price for gold during the 1960s, the official conversion price and the free market price. The French didn’t believe that this situation would last so they started demanding gold for their dollar holdings. This increased the pressure on the dollar and Nixon decided to ‘resolve’ the situation by breaking the last link of the dollar to gold. Ironically enough I think you will find Milton Friedman suggesting that Nixon do exactly that.
Yes, I recall that Friedman was on board with this and I have heard of the Triffin Dilemma. Still, in the graphs, inflation is not so manifest until after the decoupling.
Not to argue the situation with silver etc. All relevant. While Nixon may not have been the one to start the process I still contend he kicked the can over the cliff.
Your reference to contracting money supply just supports the whole premise that wrong things are done for the right political reasons for the advantage of someone. Nobody gets hard decisions do they?