49 years ago on this date, August 15th, Richard Nixon ended the Bretton Woods Agreement and “temporarily” suspended the convertibility of the U.S. Dollar into gold. The reality is though, that move was far from temporary as Nixon said – after all, nothing temporary will last nearly 50 years!
Since then, the U.S. Dollar has lost a drastic amount of purchasing power. And who has been hurt the most since then? The poor.
Contrary to mainstream belief, the fiat monetary policy has not benefited the poor, prevented things like housing and gasoline from becoming far less affordable, nor has it prevented massive inequality or poverty from occurring.
The dollar has lost nearly 99% of its purchasing power since 1913, the year the Federal Reserve Act was signed into law. Ending the Bretton Woods has accelerated and guaranteed the decline.
This is a big reason why the gold standard should never have been abandoned, and why civilization must return to it in order to restore legitimate prosperity and to keep government debt in check.
Here is the biggest reason why returning to the gold standard makes sense. When Nixon ended the Bretton Woods Agreement, the price of gold was $35 per ounce. So, let’s say your wage was $1.60 per hour back then, the minimum wage of 1971. That means you had to work nearly 22 hours to be able to buy an ounce of gold(excluding taxes, deductions and those sorts if variables). in 2020, nearly 50 years later, the price of gold is a little above $1,800 per ounce. With the federal minimum wage at $7.25 per hour, the poorest employees in our country have to work over 248 hours for that same ounce of gold, representing a decline in purchasing power by over 11-fold! How’s that for nearly 50 years of withdrawing from the crazy, arcane, obsolete gold standard(or at least a quasi-gold standard rather than a pure gold standard, which is what really prevailed under the Bretton Woods Agreement)?
Also go here for a good commentary on this under-reported historical event.