About 50 years ago, Richard Nixon, the 37th President of the United States, announced that the conversion of the US dollar into gold was banned. This event became known in his day as the “Nixon Shock”. According to many experts, Nixon ushered in a period in which the supply of Fiat currencies could not be controlled. Since the Nixon shock, the US economy has not been the same.
to the Report Bitcoin Dotcom, 50 years ago on this day, Richard Nixon ordered relevant institutions such as the Treasury Department to immediately ban the conversion of dollars into gold. He actually removed the gold standard from the dollar; A standard that never returned to the American economy.
The costs of the Vietnam War were so high that Nixon could no longer hide them; This led him to consider abolishing the gold standard. The United States held three-quarters of the world’s gold reserves, making it easier to implement the Bretton Woods agreement. The costs of the Nixon War were so high that other countries, such as France, noticed the high volume of printed US dollars. On August 13, 1971, Nixon met secretly with members of the Treasury Department at Camp David.
According to reports and documents, the Camp David meeting was very long and there was a lot of discussion. At the end of the meeting, the Nixon Cabinet decided to nominate Burton Woods. Two days later, Nixon appeared on television and ordered John B. Connally, the 61st Secretary of the Treasury, to eliminate the ability to convert dollars and gold. “Nixon said in his speech:
In recent weeks, speculators have waged a full-scale war against the US dollar. The strength of a country’s national currency depends on its economic strength, and the US economy is by far the most powerful in the world. Accordingly, I instruct the Secretary of the Treasury to take the necessary action to defend the dollar against speculation.
In another part of his speech, he said:
I ordered the Secretary of the Treasury to temporarily suspend the conversion of dollars and gold or any other reserve assets; Unless the terms and conditions set are in the interest of monetary stability and in the interest of the United States. What is this action, which is very specialized, and what does it mean? Let me destroy the inflation giant.
Of course, Nixon was right, and dollar inflation was declining faster than ever after 1971. Nixon not only removed obstacles to the unprecedented flood of Fiats, but also paved the way for the widespread growth of the US Federal Reserve and the military industry.
In the Reagan administration, Bush Sr., Clinton, George W. Bush, Obama, Trump and Biden, US national debt reached $ 28.6 trillion. New generations of Americans no longer understand what it is like to live in a country without extravagance and endless wars. Since 1971, Americans’ incomes have plummeted to an all-time low, and they can no longer afford to buy what they bought last year.
He told the people that his decision would make the United States not have a “friendship” among the world’s money traders. However, he did not say that the US military should use oil dollars to keep the Panzi plan alive.
Since Nixon, other American presidents, independent of their political factions, have continued to print money. Under various pretexts, such as the Corona virus, 9/11, and the economic collapse of 2008, they have convinced Americans that to escape these crises, it is necessary to print money in the form of protectionist plans. In 2020 alone, nearly 30 percent of the total dollar supply was injected into private institutions.
In 2021, the poor state of the economy has prompted investors to turn to gold again. Meanwhile, digital currencies have become a good option for them. On the other hand, the securities market has not really performed well, the real estate market is bubbling, and one-third of the collateral-backed securities are held by the Federal Reserve; US inflation is soaring.