Gold and Fiat Currency: Forty Years Later
Today, Monday, August 15, 2011, marks the 40th anniversary of the US default on the dollar’s convertibility into gold. It was the world’s de facto reserve currency and thus began an experiment with a reserve fiat currency that was doomed to failure before it began, because there has never been a successful fiat currency in all of history.. August 15, 1971 was just like any other day for most people, and President Nixon’s unprecedented decision to cut the US dollar’s gold international convertibility was largely ignored by the public. The majority of citizens didn’t understand the implications for their financial future. Contrast that to today, where a historic downgrade of US debt and a very public $2-trillion increase of the debt ceiling dominated headlines and the television news.