Forty Years Ago Today Nixon Took Us Off the Gold Standard

Today we celebrate, or, actually, mourn the 40th anniversary of President Richard Nixon’s taking America, and the world, off the gold standard, making many promises that were promptly broken. (For instance, President Nixon promised that the dollar would retain its full value. It only is worth about 19 cents today of what it was worth in 1971.)

There’s a little known twist. And as the late Radio Journalist Paul Harvey, master of the unexpected twist, would have said, “now you know the rest of the story.”

President Richard Nixon famously resigned the office of the presidency in the face of certain impeachment and removal from office. The charges were based in the infamous burglary of the offices of the chairman of the Democratic National Committee in the Watergate complex and, more specifically, of the ensuing alleged cover up.

America was transfixed for months by televised hearings presided over by the colorful Sen. Sam Ervin. We were treated to spectacles such as the discovery of The Tapes, the “Monday Night Massacre” resignation of the Attorney General and high Justice Department officials. We learned about the mysterious insider, pornographically code-named “Deep Throat” murmuring intriguing clues like “Follow the Money….”

It was a media circus.

But barely remembered, even by those of us who lived through that era, it also was a time of really serious, and in many ways unprecedented, inflation. And inflation causes a kind of societal uneasiness … uneasiness that easily can create a toxic political climate.

John Maynard Keynes, the famous economist, once wrote, in "The Economic Consequences of the Peace":

“There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

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