Email | Twitter
1971 was a fate determining year for the U.S. dollar. It was the year that President Richard Nixon cut the last remaining link between the dollar and gold. In other words, up until that point, foreign central banks, that were holding dollars, were able to turn them into the U.S. Treasury in exchange for gold.
But there was a big problem (for the U.S.) leading up to 1971. Between the foreign wars being conducted and The Great Society being built at home, U.S. dollars were being printed as if the world were running out of trees.
Foreign central banks began to smell blood in the water, and decided that maybe they should cash in their chips while they could. And they did...to such an extent that the U.S.'s gold stock was dwindling fast.
So, in 1971, President Nixon had a clear choice to make. Either accept the dollars that were pouring in from foreign central banks in exchange for gold, and let the U.S. gold supply perhaps disappear (or) tell those foreigners to take a hike.
Nixon chose the latter. In other words, he chose to keep the gold, and stuck foreigners with the paper.
The Treasury Secretary at the time, John Connally, put it very bluntly:
"the dollar may be our currency, but it is your problem."Naturally, you can't expect the lying and thieving U.S. government to call this what it was -- default and bankruptcy. No, the spin would be that U.S. actually de-monitized gold.
Nixon would proclaim that:
"We're all Keynesians now."The U.S. was now free from the shackles of that barbarous relic. It was high time for gold to get dumped into the dustbin of history. No longer were people supposed to think of it as money. And being that gold's industrial uses are minimal, its price was supposed to languish until the end of time.
Also of note in 1971, Merrill Lynch went public. It was only the second brokerage firm to do so. That same year, it released its "Merrill Lynch is bullish on America" ad during The World Series.
Oh...and The Nasdaq was also launched in 1971.
So as you can see, Paper Money America was about to be unleashed!
Give government a printing press, and it'll attempt to take over the world, stick its nose into every conceivable problem that exists, and inevitably destroy the value of the paper that it prints.
And that's exactly what happened:
- Merrill Lynch collapsed and would have completely vanished had Bank of America not been forced to purchase it. The Bull ended up being nothing but bull.
- The Nasdaq experienced an unbelievable boom and bust, bringing financial ruin to millions of Americans.
- The U.S. has a military empire covering much of the Earth.
- The government at home has reached so far into our lives that it now monitors our salt and soda ounce intake. Nothing is off limits.
- And finally, gold did not get thrown into the dustbin of history. Its price has skyrocketed tremendously since the $35/oz. Nixon days:
The only thing left is the complete destruction of the value of the dollar. And you can almost tangibly feel the desperation from governments around the world.
They really, really, really don't want to be forced back to gold. The only thing that stands in the way is the inevitable price inflation.
Once Americans (and much of the rest of the world) are faced with empty bellies, shortages, and rationing, the ability to distract them with Lindsey Lohan scandals will fail to suffice.
Helicopter Ben is working furiously to bring worldwide inflation about:
And the day may be coming (it's impossible to predict when) where a post will appear on EPJ titled: The Return of Gold Money.