45 Years Without Gold (Standard)

Of course even when Nixon completely detached the dollar from gold we had a very very modified gold standard. But at least there was some tie to reality.

Now we live in an almost completely fiat system, though it can be argued – well – that oil is the de facto backer of US currency these days, the so called petrodollar. (Though some do not buy this argument.) Regardless we live in a highly financialized world with lots and lots of cheap money floating around.

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Today in 1971: President Nixon Closes the Gold Window, One of the most important moments in US economic history (VIDEO)

One of the most important moments in American economic history. Nixon killed the last vestige of sound money in America. Within a decade the USA was heavily financialized.

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Central Planners Freaking Out about Discussion of Gold’s Role

By Clint Siegner, Money Metals Exchange

Sound money issues make for good politics these days. The leading Republican candidates have all suggested reforms to our monetary system. The topic is popping up in debates as well as interviews. Predictably, Fed worshippers and proponents of central planning everywhere are snickering and trotting out the usual responses.

Michael Hiltzik, with the Los Angeles Times,

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Ben Carson Upsets Washington Post for Questioning Fiat Money

The dotted line indicates where the dollar was detached from gold.
Source: Washingtonsblog.com

One the most important things about gold as a monetary foundation is that it forces financiers and economists to deal with reality. Gold is the North Star by which economies and currencies are judged. It’s been this way for millennia, and it likely will remain the case for many years to come. But we have detached our money from gold, and reality. In 1971 Richard Nixon severed the last ties the dollar had to gold.

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Did a 26-year-old just take down Thomas Piketty?

The red dotted line is where we finally said goodbye completely to the gold standard.
Source: Washingtonsblog.com

Piketty has largely been “taken down” already. That the economist does not acknowledge that the current fiat money system and the financialization of the world economy generally is what is driving inequality, not “capitalism,” is a huge problem. To say the least.

But others have come after Picketty from other angles.

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Big Banks fear Swiss citizens will vote to reback their money with gold

The big banks and governments don’t want the Swiss people to reback their money 20% with gold. What does that tell you?

Gold is real money. Paper is not. Gold doesn’t rise and fall in price (generally). Paper becomes more or less valuable relative to gold. This concept is lost on the general public. It is not lost on the bankers and the folks in government.

The establishment fears gold money. It reins in their power.

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Jim Rickards: The Demise Of The U.S. Dollar (And Mutualy Assured Financial Destruction) Video

It won’t happen tomorrow but slowly but surely the world is moving from dollars. The petrodollar system which has been key to the world economy over the last 40 years is eroding. More and more country to country deals are being done in currencies other than the dollar. The economic world as we have known it, after Bretton Woods in the Cold War Era, the post Cold War era, and the post 9-11 era is fundamentally shifting. The dollar is not what it once was.

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