The 40th anniversary of Nixon's day of folly

15-Aug-2011 It will not be mentioned on News at Ten, nor will it appear in today's copy of the Daily Bullshit, but today there should be a one minute silence followed by a gun salute.

It is exactly 40 years ago today that Richard Nixon closed the gold window. From that moment the US government not only held the reserve currency of the world but it could print that currency whenever it liked and in whatever quantities it liked. From that moment paper money was backed by nothing more than a government promise to pay. Not surprisingly, from August 1971 the price of gold started its journey upwards and the paper dollar started its journey into decline. As I write that diversion in value looks like it will continue for a very long time to come.

At some point these historical facts will be taught in every school across the world and how the children will laugh. Unfortunately no one is laughing at this act of stupidity right now. The lesson is you cannot have something for nothing.

Fast forward 40 years and we find that the entire globe is drowning in debt - debt that at some point has to be paid off by somebody. I won't bore you with any more history. The only thing that matters is how do you protect yourself from this sort of gross negligence, rash stupidity and errant greed by those in charge? The answer is a simple one - buy gold.

---