19 Oct 2014 6:31 am
I was there and not a child sucking on a penny candy. Nixon pulled the US off the Bretton Woods system, but not in a vacuum. He also froze wages and prices for 3 months and instituted a 10% import surcharge as measures to counter the dollar he was devaluing. Now I understand you were not there with an adult's head on your shoulders but I assure you, a devalued dollar abroad and a hefty surcharge on imports was barely consequential to a US economy stabilized by its own consumers, consuming American made goods. Successful, yes, until the import surcharge was dispensed with and a floating exchange rate was instituted. The US government was no longer the master of its own monetary policies.tharock220 » 19 Oct 2014 3:15 am » wrote: If you want a true gold standard the issuer of the currency must be able to back all circulating money at the value they give it. Money is like everything else. It's subject to supply and demand.
This was FDR's brainchild. Your love of his policies is well known.
Now, it's all water under the bridge, fiat currency system but no incentives to produce in the US and no barriers against foreign imports. Nixon can be blamed for pulling the US off of gold, but the tsunami was already in progress and he took what measures he could to protect the US economy and its citizens in ways that are also now, water under the bridge.
Moving to a fiat currency may have been inevitable (opinions abound) but there was/is nothing de facto about the situation we're in now.