About 50 years ago today, “Nixon Shock” was introduced to Americans when the 37th President of the United States lifted the convertibility of the US dollar to gold. Since then, the US economy has never been the same as many believe Richard Nixon ushered in a new era of uncontrollable fiat currencies.
50 years ago today, Nixon shook the world
Today is the anniversary on August 15, 1971, when US President Richard Milhous Nixon announced to the American public that the government, together with the Treasury Department, would immediately suspend the convertibility of the US dollar to gold. Nixon essentially revealed the abolition of the gold standard from the dollar and he would never return. In addition, the American public is not entirely aware of why Nixon and his cronies decided to abolish the gold standard.
The reason Nixon scrapped the gold standard is because the US couldn’t hide the massive war spending that fueled the Vietnam War. Part of the Bretton Woods deal was designed so that the US owned three-quarters of the world’s gold. War spending under Nixon was so massive that other countries like France noticed that the US was printing massive amounts in USD. On the afternoon of August 13, 1971, Nixon and members of the Treasury Department met in secret at Camp David.
According to testimony and reports, the secret meeting at Camp David was very controversial and sparked a great deal of debate. At the end of the meeting, the Nixon government finally decided to dissolve the Bretton Woods Agreement. On Sunday, August 15, 1971, Nixon said on television that he had directed the 61st Treasury Secretary, John B. Connally, to suspend gold convertibility to US dollars.
“In the past few weeks, speculators have been waging an all-out war on the American dollar,” Nixon said on television. “The strength of a nation’s currency is based on the strength of that nation’s economy – and the American economy is by far the strongest in the world. Accordingly, I have instructed the Treasury Secretary to take the necessary measures to defend the dollar against the speculators, ”said the 37th US President. Nixon added:
I have instructed Minister Connally to temporarily suspend the convertibility of the dollar to gold or other currency reserves, except for amounts and conditions in the interests of monetary stability and in the best interests of the United States. Well what is this action – which is very technical – what does it mean to you? Let me dispel the specter of so-called devaluation.
Since August 1971 the value of the dollar has eroded, the military-industrial complex has grown massively and bureaucrats cannot stop spending
Of course, Nixon was not telling the truth, and the monetary devaluation of the US dollar began to erode faster after 1971 than ever before in American history. Nixon not only opened the floodgates to a world of Fiat like never before, but he also provoked that the unaudited Federal Reserve and the US military-industrial complex grew massively after 1971.
Under President Reagan, Bush, Clinton, GW Bush, Obama, Trump and Biden, the national debt has swelled to $ 28.6 trillion. There are now generations of American children who don’t know what it is like to live in a country without excessive government spending and endless wars. Meanwhile, US wages have stagnated like never before in history since 1971, and citizens have been able to afford less and less over the years.
After Nixon said his actions “would not make friends among international money dealers,” he did not tell Americans that the military would have to enforce the petro-dollar to keep the Ponzi alive.
Since Nixon’s time, both left and right presidents have kept the money printing system going and convinced Americans that bailouts are necessary due to crises like Covid-19, 9-11 and the 2008 financial collapse. In 2020 alone, almost 30% of all existing USD went into the hands of private institutions.
In 2021 the economy is looking terribly bleak and investors are turning to gold again and getting involved in crypto assets like Bitcoin (BTC) and many others. The US stock market is not real, the real estate market is boiling again, the Federal Reserve owns a third of all mortgage-backed securities and US inflation is skyrocketing.
What do you think of when Richard Nixon scrapped gold standard convertibility from the US dollar? Let us know what you think on this matter in the comments below.
Photo credits: Shutterstock, Pixabay, Wiki Commons, Economic Policy Institute, BEA, wtfhappenedin1971.com,
Disclaimer of liability: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement for any product, service, or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author are directly or indirectly responsible for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.