Economist Views on Nixon, Fiat and the Gold Standard
Gold Standard 50th Anniversary
Jul 29, 2021
The Gold Standard Ended 50 Years Ago. Federal Debt Has Only Exploded Since
This year marks the 50th anniversary of the end of the gold standard in the U.S. In August 1971, President Richard Nixon formally unpegged the U.S. dollar from gold, meaning the greenback was no longer convertible into bullion. Overnight, the dollar became a free-floating currency, measurable only by comparing it to other world currencies.
And yet there were still restrictions on private ownership of gold coins, bars and the like. It wouldn’t be until President Gerald Ford signed a bill in December 1974 that Americans could freely buy and trade bullion, for the first time in over 40 years.
A lot happened as a result. Its price no longer fixed, gold exploded 385% from the end of 1974 to 1980, when the metal topped out at $850 an ounce as the U.S. coped with historic levels of inflation.
The Age of Runaway Debt
The drawback is that, in the years since the end of the gold standard, there’s been a significant and growing lack of discipline when it comes to government spending. Before 1971, there was a natural limit to how much money could be printed. New issuances were dependent on the amount of gold sitting in the nation’s coffers.
Today, with the dollar backed not by a hard asset but by the “full faith and credit” of the U.S. government, the federal debt is closing in on an astronomical $28 trillion, which is more than 130% of the size of the U.S. economy.
The End of the Gold-backed US-$ - Nixon Shock in August 1971
ChessCoach: Apr 23, 2016
This ground-breaking speech ("The Challenge of Peace") by US president Richard Nixon was the prelude to the end of the Bretton Woods System from 1944. Before the 'Nixon shock', foreign currencies were comfortably put into a defined relation to the US-$. US
How Nixon Killed the U.S. Dollar
Aug 11, 2014
On August 15 1971, President Nixon removed the final link between the dollar and gold -- and forever changed the face of the U.S. economy.