This week marks the 42nd anniversary of Nixon ending the Bretton Woods agreement by the halting convertibility of the US dollar into gold. Interesting to note that the average lifespan of the 3,800 fiat currencies that have been tried is 40 years, so we are 2 years overdue for it all to end in tears.
Some background to the 'closing of the Gold Window':
The President of France Charles De Gaulle fearing a future default by the USA on its gold backed dollars instructed the Banque de France to increase the rate at which new US dollars holdings were converted into gold bullion. De Gaulle sent the French navy across the Atlantic to hand over US dollars and bring back gold bullion in exchange. In 1965 alone, the French navy ferried back over $150 million of gold bullion thereby increasing the proportion of French national reserves held in gold from 71.4% to 91.9%.
Due to inflationary pressures on the US$ as a result of printing to many dollars and foreign borrowings to fund the Indo-China (Vietnam) war on August 15, 1971, President Nixon imposed a 90-day wage and price freeze, a 10 percent import surcharge, and, most importantly, “closed the gold window”. Forever ending convertibility between US dollars and gold.
Nixon announcing to the American people that the US Dollar is no longer 'good as gold':
Some background to the 'closing of the Gold Window':
The President of France Charles De Gaulle fearing a future default by the USA on its gold backed dollars instructed the Banque de France to increase the rate at which new US dollars holdings were converted into gold bullion. De Gaulle sent the French navy across the Atlantic to hand over US dollars and bring back gold bullion in exchange. In 1965 alone, the French navy ferried back over $150 million of gold bullion thereby increasing the proportion of French national reserves held in gold from 71.4% to 91.9%.
Due to inflationary pressures on the US$ as a result of printing to many dollars and foreign borrowings to fund the Indo-China (Vietnam) war on August 15, 1971, President Nixon imposed a 90-day wage and price freeze, a 10 percent import surcharge, and, most importantly, “closed the gold window”. Forever ending convertibility between US dollars and gold.
Nixon announcing to the American people that the US Dollar is no longer 'good as gold':
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