COMMENT: Nixon is following us today | opinion

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On August 15, 1971, President Richard Nixon decreed that the US dollar could no longer be redeemed for the gold owed, not even to foreign governments. This wrong decision was a desperate attempt to avoid the consequences of previous wrong decisions.

Nixon decided to end gold convertibility. He claimed it was temporary, but his decree was a dishonorable failure to meet the U.S. government’s obligations.

Here is a brief history of the previous bad decisions that led to Nixon’s really bad decision.

Nixon’s action came after a long series of bad political decisions dating back to 1792 when the Coinage Act fixed the price of silver and gave silver owners unearned purchasing power.

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Next, the law changed in 1834, transferring fortunes from silver owners to gold owners. The former were more likely to be farmers and artisans who owned silver. The latter were more likely to be the rich who deposited gold in banks

In 1861 the government declared that paper money could not be redeemed for metal. In 1862 the government issued the later notorious “Greenbacks”, and in 1863 banks with a federal charter were able to issue irredeemable banknotes. Declared as legal tender, the creditors either had to accept it or waive payment.

After the civil war, the government resumed payment in cash, but caused even more mischief. The Coinage Act of 1873 effectively demonetized silver. Farmers and artisans suffered further losses and now had to pay debts in gold.

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