by William L. Anderson
On August 15, 1971, the last remains of what had been a magnificent monetary system died a terrible death, and the American academic, political, business, and media elites led the cheers. The Dow Jones Average jumped by more than 32 points the next day. A de facto national default was spun as a great liberation from a tyrannical financial arrangement that had plagued humanity for generations. A half century later the disinformation continues, as intellectual bankruptcy parallels the financial bankruptcy of that event.
I write, of course, of the decision by President Richard Nixon to officially close the “gold window,” through which the US government was obligated to sell its gold stores to foreign governments at $35 an ounce, which even then was a bargain. As Nixon’s regime encouraged the Federal Reserve System to inflate the dollar to pay for its bloated military and welfare spending, as had the Johnson and Kennedy regimes before him, it became apparent that the US dollar was quickly losing value. The United States was in rapid decline—and the dollar was falling with the nation’s prestige.