Skip to comments.Abandoning the gold standard was a fatal error we're now all paying for
Posted on 08/13/2011 5:20:28 PM PDT by PotatoHeadMick
Roll out the bunting. Tomorrow is the 40th anniversary of the modern global economy.
That's right: come Monday morning we will have managed to survive four decades of fiat money though, given the chaos in markets in recent weeks, it is anyone's guess how much longer it will last.
On 15 August 1971, with the US public finances straitened by the cost of the war in Vietnam, Richard Nixon finally cut the link between the US dollar and gold. Until then, the US Treasury was duty bound to exchange an ounce of gold with central banks willing to pay them $35.
Suddenly, for the first time in history, the level of the world's currencies depended not on the value of gold or some other tangible commodity but on the amount of trust investors had in that currency. Central banks were allowed to set monetary policy based on their instincts rather than on the need to keep their currency in line with gold.
(Excerpt) Read more at telegraph.co.uk ...
Yes, we need to get back to SOME kind of fixed standard, preferably gold. Ron Paul and Steve Forbes have this down correctly.
I believe that leaving the Gold Standard was one of America’s great mistakes. Dropping the Draft was another.
the dollar today is widely seen as being worth about $0.03 compared to 1800
if you do the math... we’re still on the gold standard.
the US currently has about $500 billion in gold bullion
the US also has a debt of $14.5 trillion... which is 29 times the value of our gold
$1.00 divided by 29 == $0.035
d to abandon the gold standard because LBJ had simply printed money to pay for HIS Vietnam War and HIS great society. Charles de Gaulle had realized what happened and Charles was converting every dollar he could get into gold. When Nixon realized wed end up with no gold, Nixon took us off the gold standard. Yes indeedie, that is where real dollar printing began, as there wasnt even the pretense that dollars had to be backed by gold.
Now, we could, in essence, go back on a real value standard. We could issue petro-dollars. Each dollar would be convertible into oil. In actuality, oil has real value as you can convert it to energy, plastics or food. Gold, on the other hand, just looks pretty. Of course, this would necessitate drilling our own oil.
Sure as long as the new new gold dollars cannot be used to pay off debt accrued under the fiat money.
*** Until then, the US Treasury was duty bound to exchange an ounce of gold with central banks willing to pay them $35.*****
And anyone who can remember those days it was illegal for Americans to own GOLD thanks to FDR. At the same time FRANCE was buying all the US GOLD it could at $32 an ounce.
When Nixon cut the Gold standard the price of GOLD shot up to about $280 an ounce.
do socialists and rinos ruin people’s lives.
I’ve never understood how a society could put value in a piece of paper backed by NOTHING and accept it for exchange of goods and services. Why not use blades of grass? Tree bark?
I suppose the only thing that makes it ‘valuable’ is the fact that ‘they’ can print it, and ‘we’ can’t....
Today a gold backed US $1 dollar bill would have bought a hundred Euros or more.
Back in the 60’s $1 US bought 360 Japanese Yen.
Today $1 US buys only 76 Yen.
Being a gold bug even back then, I was fully aware of the swindle being pulled off, tried to tell people (Letters to Ed, etc.) - and was pegged as a right-wing kook.
When Roosevelt took us off the gold standard, he left redemption in place for the foreigners - hence the “dollar is as good as gold” saying.
By the ‘70s, the rest of the world, especially France, were alarmed at amount of ever-increasing dollars and started redeeming them. I think the gold backing was something like one ounce of gold for every four dollars in circulation and a bit less for other forms.
In a typical maneuver, the politicians talked the foreign claimants into taking silver instead, replacing their dollars with silver certificates and then converting paper to silver. (I remember citizens doing that, even down to one dollar, getting a packet of silver granules.) They also started melting US silver coins and blaming hoarders for their scarcity - The mint couldn’t make clad coins fast enough and there was a temporary shortage.
While Nixon and the rest were assuring us that “gold was archaic”, I began my first phase of preparing for when TSHTF as I thought this country would only last a few years - shades of the Roman Empire. (I’ve been off in timing but not the direction.)
I believe it’s just a matter of time (i.e. SOON) before things get SO chaotic that we will have to return to a gold-backed but not redeemable currency. IMO, without some brake on the politicians, nothing short of backing like this will keep their spending in check.
Wow, those are two wildly contradictory statements. The first supports freedom, the second denies it.
You're right, I think. But, unfortunately, without the citizens' right of redemption, there aren't any real checks on the politicians.
“Why not use blades of grass? Tree bark?”
I remember asking my father why didn’t we use chickens, but I forget what he told me.
Seriously, I was shocked, really shocked to find out we had only gone off the gold standard under Nixon. I thought it had been long before.
When Steve Forbes ran for pres. and had this as part of his campaign, all the media did was giggle about it.
It was that behaviour that caused me to realize that the MSM is not in any way interested in “informing” the public.
Although I was still shocked, really shocked, to see what shills they were for Obama.
not in any frame of mind just now to vet this logic, however...what you're really saying is the system works; the market allows no free lunch; and Leo Melamed, father of forex trading at the CME, was correct when he said the dollar is on "the information standard."
And it appears to work just fine.
Agreed. I'd really like to see go back to what was basically a redeemable warehouse receipt:
Dropping the Gold Standard does not support Freedom any more than Dropping the Draft deny’s it/
Being born in America is not a happy free life given to our young people. Someone fought for that Freedom and someone will have to fight to keep it. It’s time young people realized that Freedom is not Free, or that the attitude of let someone else do it is a proper one.
Being born Free is a debt owed to our Government and every last citizen when they come out of High School should serve in one way or another so they would appreciate that fact.
6 months and some training in weapons and discipline is the least that should be acceptable. Instead of Government loans they think they are entitled to and somone else required to carry their burden.
Now I know many will not accept my opinion, and I don’t give a damn. Military service of some sort should be a required duty of ever citizen of this country during their youth.
Gold standard - hogwash.
You can find this in google books:
Popular Science Sep 1897
Search and find it. You’ll find the first page:
POPULAR SCIENCE MONTHLY
SPANISH EXPERIMENTS IN COINAGE.
By Henry Charles Lea.
Read on, you’ll find the horrific inflation problems of the Spanish Empire over decades.
They did not produce manufactured items, they exported raw materials: wool, flax, hemp, silk, iron, steel, timber and wine. All exported as raw materials. And they minted coins by the boatload, and they devalued their coins as they needed more and more of them. And the more they needed, the more they devalued and that made them need even more.
one bubble after another. first the stock bubble. Then the RE bubble and now the gold bubble. Gold isn’t worth $1,700 an once any more than a fixer upper that was once on the market for $1,000,000 and is now an REO on the market for $250K was worth the million. Common sense goes out the window when people get into a frenzy....and then they get burned.
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