Before Nixon’s Executive Order on August 15, 1971, it was possible to exchange $35 in American currency for one Troy ounce of gold. His decision basically killed the US gold-standard currency and replaced it with a fiat currency that has no guaranteed convertibility.
Ever since then currencies, including the dollar, have had to float in the global marketplace. The value of a country’s currency is determined by the ratio of the country’s debt to its Gross Domestic Product (GDP). The less debt and the more stable the country’s economy, the more valuable the currency.
A gold standard limits government spending. The value of the dollar dives when politicians know they can print dollars to fund every pet project. They win votes by devaluing the money in your wallet.
On the gold standard, every dollar printed had to be backed by gold.Nixon’s decision opened wide the doors to the inflation rampant in the US today. Nixon’s decision is a major cause for the upcoming collapse of the dollar and the introduction of a new, devalued currency. It is just a matter of time.
The gold standard was a friend of all Americans who saved money and wanted to maintain the value of the dollars they accumulated. Most Americans who favor a gold standard, like our Founding Fathers, like a limited and frugal government. The politicians are not going to solve the problem. American citizens are going to have to solve the problem by owning gold and silver.
WHY GOLD AND SILVER HELP SOLVE THE PROBLEM
Most people for thousands of years have loved gold and silver primarily for its ability to protect the value of our savings in a compact, easily possessed form. Modern gold-haters are modern politicians and central bankers. A gold standard prevents them from creating money out of thin air.