Gold Standard as the Basis of the Monetary System.
By Rene Gruner, C₿P, Chief Editor and Futurist at BankSith.com, Switzerland
In 1971, President Nixon abandoned the gold standard as the basis of the monetary system.
Eventhough US citizens had been banned from redeeming their gold certificates for gold coins or even from owning gold since the early 1930s, other governments in the world still had the privilege of redeeming their Benjamin Franklins for gold. But due to the inflationary monetary policy of the Federal Reserve in the 1960s, foreign governments began redeeming more and more of their dollars for gold.
Convertible gold coin certificates. Source: Wikipedia
Attempts to encourage other governments not to repay their dollar holdings have unfortunately not suceeded, and there was a clear risk that the US gold supply could eventually run out. So President Nixon decided to close the gold window and cut the link between the USD and gold.
What happened to the money supply and inflation over the following decades?
No surprise that the FED woke up in just another monetary inflation wonderland.
Your dollar will be worth just as much tomorrow as it is today.
“Your dollar will be worth just as much tomorrow as it is today.” Nixon believing in Santa Claus in 1971. Bye bye Gold Standard!
Did you spot the blink in President Richard Nixon`s eyes at minute 1:12 right after this statement?
Has anyone realized the monsterous asset inflation in real estate in almost any western world country in the last decade?
Remember, Governments will always ask you for your full faith in their ability to pay back debt one day. The day that never comes? In Turkey, they are desperately begging for that trust. Just as in Venezuela or Libanon. Or Argentina. Or Zimbabwe.
Have you ever wondered why the government never says there is enough inflation?
Governments are addicted to inflation, just as a crack addict is addicted to dope to get through the day without seeing the long-term side effects.
“Gentlemen, you can calm down. The printing presses run day and night again in three shifts.”
Rudolf Havenstein, German President of the Reichsbank (German central bank) during the Weimar Republic hyperinflation of 1921–1923
Two things will never change. The printing press runs continuously as sure as day follows night. And there will never be more than 21 million bitcoins in circulation.
- Gold Standard as the Basis of the Monetary System - October 24, 2020
- A Digital Ruble. A Government’s Forbidden Fruit Growing in the Garden of Eden - October 18, 2020
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