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IPFS News Link • Dollar Meltdown The

How Nixon And FDR Used "Crises" To Destroy The Dollar's Links To Gold

• https://www.zerohedge.com by Jonathan Newman

Nixon announced that the US would no longer redeem dollars for gold for the last remaining entities that could: foreign governments. Gold redemption had been made illegal for everybody else, so this action finally ended any semblance of a gold standard for the US dollar.

In Crisis and Leviathan, Robert Higgs showed how in the twentieth century the US government grew in size and scope primarily during crisis periods like wars or economic depressions. The powers gained during those periods were often advertised as "temporary," but history shows that governments rarely relinquish powers. This "ratchet effect" applies to the way Nixon "temporarily" suspended gold redemption in 1971—the resulting regime of unbacked fiat dollars remains in effect today.

What Was the Bretton Woods System?

The Bretton Woods system was designed by the Allied nations, led by the United States, near the end of World War II as a postwar international monetary order. The US dollar would become the world's reserve currency, which foreign governments could redeem for gold, even though US citizens could not. This prohibition was not new for US citizens, since Franklin D. Roosevelt outlawed private ownership of gold coins and bullion in 1933.


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