The issues with our dollar is really yet another symptom of a bigger problem stemming from the way our political system is set up. Unlike the governmental system of say, China, our political system promotes INHERENT SHORTSIGHTEDNESS.

The US government continually proves to its citizens that it has inability to make sound "long-term decisions" that ensure the country is on a sustainable path. A major driver for this lies in the fact that the ONLY people in a position of actual "decision making" are the good men and women of our Congress, all of whom, have to also get re-elected every 2 years.

A blatant example is our entitlement program that now sucks up half of the federal budget, has been on an obviously fundamentally unsustainable path since 1970s and is now driving us headlong into bankruptcy... Congress has been powerless to fix it for decades and there is absolutely no evidence to suggest that they can fix it now - its like watching a slow motion train wreck.

Over the summer, facing a outright default of US Federal debt, everyone around the world got another opportunity to see this group of decision makers in action. Yet again, their level of dysfunction, pontification, and outright incompetence, was so alarming that it caused the US markets to go crazy. Again, this was not a new problem, it had been coming down the pipe for years, yet, even at that insanely late hour, their inability to come up with something sustainable, led to the downgrade of US debt.

Baby steps to a solution would be term limits on congressmen.

The worst president ever: Lincoln. Lincoln's war against the states was the end of the republic, and opened the door for @ssholes like Wilson, FDR, Carter and Obama. The US empire has been stealing from its people ever since, and waging war on the world.

They're even stealing guitars:

Click to view link

"... wouldn't excessive printing (although it would be legislatively controlled to the 3%) outside the authority become quickly evident through price inflation..."

The problem with excessive printing of money is the delay between the excessive printing & its effect in price inflation. I believe Milton Friedman said it takes between 6-18 months for inflation to set in & various factors can affect how fast it sets in. So the public might not see the correlation. The politicians (or bankers) would then try to blame inflation on other things. Maybe if a law was written that would not allow Congress to increase the money supply faster than the growth rate in the economy, it might work. Even then, I would be skeptical, as they might find a way around the limitation. The dual gold/silver standard & free coining of money by the Treasury Department was a good idea because gold & silver would always be added to the money supply as new mines & better technology permit, usually correlating automatically to the growth in the economy... & it would prevent Congress from abusing its power to print money out of thin air faster than the growth of the economy.

But it doesn't have to be gold or silver. I've heard the argument that it could be anything the majority of the people wanted to use & trusted as money, with the government simply insuring standard weights & measurements. I believe Milton Friedman would also agree with that idea.

Thanks for the reply. I suppose the point from my understanding of Bill Stills position that the important issue is the control of the QUANTITY of money rather than what backs it. So from that perspective and the idea of a gold/silver is neither here nor there as long as the mechanism of QUANTITY is out of the hands of a private bank cartel.

However, unlike now with the Fed Res wouldn't excessive printing (although it would be legislatively controlled to the 3%) outside the authority become quickly evident through price inflation in which case the responsibility would fall squarly on the shoulds of Congress. Sort of a self-imposed check system as they would like to keep their job and they would have no one else to blame.

You seem to be exactly on menshew! I can only comment from whatever I have learned on my own (& yes, I did see the video 'The Money Masters'). But the problem I have with the 4 step plan is (I believe) the misconception that Congress will have the self discipline to not print up more unbacked currency than would be normally allowed in order to keep up with a growing economy (something in the usual range of 3% more per year). I think in the end, you would wind up with Congress inflating the new unbacked currency (to avoid raising taxes) instead of the Federal Reserve!

Also, you are correct in questioning the idea of a return to a simple gold standard as it could very well be possible for the incredibly rich Central Bankers to possibly "corner" the gold market & manipulate its price, even if we did away with the Federal Reserve!

So I support the idea of "sound money" backed by something of intrinsic value that cannot be easily manipulated by Congress & Central Bankers outside of the USA (once the Federal Reserve is gone). Our Founding Fathers started off with a DUAL gold/silver standard in a ratio of 1:15-16. It would be hard for Central Bankers to corner BOTH the gold & silver markets. But perhaps we could just let "The People" decide what they want to use for currency & have Congress just enforce a uniform standard of weights, measures & purity. Then the quantity of currency would be beyond the control of Congress, they could only enforce a uniform quality of currency.... which is basically what Congress had been doing in the past with the Treasury Department making sure the gold & silver in US coins were of standard quality & coining them FOR FREE (!) as miners gave them their supply of newly mined gold & silver.

"That is what Richard Nixon intended"

Really? Nixon?

Nixon ended the war Johnson escalated. Nixon opened trade with China. Let's all piss on Nixon.

I would have to say the worst would have been Wilson for Fed Reserve Act.

Second worst, huh?

Who would be the worst? My vote would be FDR.

Glad to see someone else "defend" Nixon. We've had much worse.

thanks for your post, Avatar.

I thought I had posted this earlier, but I may have put it in the wrong forum or something. Please excuse.

8/17/2011 8:29 AM

I gave the article a 5 because of the importance of the topic; however, I came away with some real questions about some of the content.

I know from reading here that Lew Rockwell is a highly respected source and don't like to put myself in a position to in any way disagree with him. That being said, I am old enough to have a memory of what was happening in the Nixon years. I remember my father had complained that 'Charles DeGalle was trying to take all the US's gold.' At that time, it was already illegal for US citizens to even own gold coin, much less convert paper money (I don't know whether they were FRNs or Silver Certificates then) into gold. But international debts could be settled in gold on demand. I think it was considered pretty 'tacky' (LOL) for France to do so.

My recollection-anyone please correct me if I'm wrong here-is that Lyndon Johnson really revved up the war in Viet Nam and initiated the 'Great Society'-both things increasing our debt and causing massive inflation. Like the first guy walking through the woods steps on the snake-the second guy gets bit.

Seems everybody likes to hate Nixon and most seem to love Roosevelt. Roosevelt started with big government spending and took away the gold/silver-but you can't create a clever phrase like 'Tricky Dick' with 'Franklin'. Lyndon Johnson continued with the great giveaway and big spending by government. Nixon was actually a pawn in an endgame situation-the Power Elite had planned all along for the Federal Reserve to have the power to print money with wild abandon. His choices were to close the gold window or deplete the gold reserves (were they already depleted, henced the closing of the window?) held by honoring the right of France and other nations to redeem USDs for gold.

The heroic action would have been for Nixon to deal with big spending then and there, but I think any attempts would have been futile. Things had already gone too far-but in accordance with the plans of the PE.

Something occurred to me as I listened to the video: The politicians have subverted the term 'Rein in Debt' for their purposes to 'Reign in Debt'. Somebody's probably already come up with that, but it only just occurred to me.

Thanks DB for giving us the opportunity to read/watch here and learn from other feedbackers.

Enjoyed the points offered but have to somewhat defend Nixon. It was Johnson who said to the Pentagon: Get me elected and you can have your damned war." Also Johnson who said about the Gulf of Tonkin affair: " As far as I know they could have been shooting at whales." When the USA confiscated the peoples gold and said only Foreign countries could exchange dollars for gold, the demise of the dollar was set in stone. LBJ tried to finance a huge war with deficit spending aka BUSHCO. Foreign countries were taking payment in gold. The money was probably no longer backed by gold by the time Nixon suspended the gold standard in 1971. It is still unknown how much gold is in Ft. Knox now. Nixon did continue the costly war but his actions alone were far from bringing down the dollar. That award should go to the second worst president in USA history: LBJ.

@ memehunter: "Again, I tend to agree with you but I don't see who or what would have forced the USA to live within their means."

You are correct. It would have been unclear who or what would have forced the USA to live within their means. And, yes, it is likely the gold reserves would have evaporated before the crises hit (due to lack of political will to fix the problem in time). But I guess, that is my point... the crises would have hit much earlier as economic reality set in, perhaps by the 1980s when the total Federal Debt was less than $3T... instead of the almost $15T it is now. In the end, the problem probably would have been solved (one way or the other) by the 1990s with less pain for us & the whole world. The problem was postponed & the problem grew. Our pain (& the pain for the whole world) will now be much worse & last longer. We postponed economic reality for a time & at a cost. We won't avoid it.

But I suspect a bigger, global financial crises is what the Power Elite wanted all along, anyways!

Here is the delima I've been trying to work through for sometime now and perhaps some on here can assist me. I've got some PMs to sustain through a collapse along with other preps. I've read lots of posts/articles that support a return to a gold standard. My delima is I've also read much about history and the currency manipulation done by TPTB while on a gold standard. I've read a lot from Bill Still and he points to many periods of history (Tally Stick, Colonial Script, Greenbacks) were unbacked currency did very well as the QUANTITY was controlled. I have no doubt that the official US gold stocks are none existent and get the feeling (especially with the Wold Bank Pres coming online support a gold standard) that that may be exactly the end game the PTB are pressing for. With the cental banks in possession of most of the world supply of gold doesn't that put them in a position to manipulate the quantity of currency in the future. Unless we remove the ability of the PTB to manipulate the quantity of money (boom bust cycle) and end fractional reserve banking any monetary system would seem subject to the same crap we have now. Can anyone provide more insight/counterpoints? Thanks. You can also e-mail me direct william dot menshew at us dot af dot mil.

Since 1913 the internation banking cartel has been firmly in control of our economic condition. They allow easy money and the economy booms, they contract the money supply and their is economic hardship (i.e the Great Depression). This is not different than the many times since 1913 - although there has been trillions of dollars pump into the economy, it's sitting in bank vaults so it's as good as retracting the money supply since it's not circulating. This has been the cycle - easy money, over leverage and debt saturation, contraction and then money flow from the majority to the 1% at the top. People need to wake up to the real cause of 90% of this country and the worlds problems - Central Banking and Fractional Reserve Banking.

What to have everyones personal income tax lower, pay off the national debt, make America the #1 economy in the world again. Here is the plan:
1) Pay off the national debt with debt free U.S. notes - printed by the Treasury
2) Abolish fractional reserve banking
3) Repeal the Fed Res Act (1913) and National Bank Act (1964)
4) Withdrawl the U.S. from the IMF, BIS and World Bank

Recommend watching 'The Money Masters' on Youtube.

Thanks for your comment. I agree with you that my scenario assumes that the USA would have continued the war and spending beyond their means.

"But once again, I repeat that what would have happened is the USA under Nixon & subsequent Presidents would have been forced to live within our means or see the gold backing of the US Dollar evaporate. History would have been different. We could not have had "guns & butter", we could not have had the War in Vietnam & The Great Society/War on Poverty at the same time."

Again, I tend to agree with you but I don't see who or what would have forced the USA to live within their means. It is much simpler for a president seeking reelection to close the gold window than to cut on social programs or war spending. The way I see it, the gold backing would have evaporated either way, whether it is by foreign countries eventually depleting the US gold reserves (by continually redeeming their dollars for gold) or through a unilateral decision by the US to close the gold window. This is why I think that the whole story needs to be seen from a much broader perspective going back to 1913 (as you did in the second half of your comment), instead of simply blaming it on Nixon.

the dollar started feeling poorly in 1913 and had a seizure in 1934. It stumbled along and started to feel really groggy in 1968 until a sudden heart attack one Sunday led to its death on 15th August 1971. Currently an imposter is living in the dollars former house and keeps picking up the welfare payments though it appears the general public is starting to complain to the authorities.

@ memehunter: "If Nixon had decided not to close the US Gold window, the next president would have been forced to do so anyway because the US gold reserves would have been reduced to practically nothing."

What you said is probably true ASSUMING WE CONTINUED THE WAR & SPENDING BEYOND OUR MEANS. The gold standard forces a limit on the government to try & live within its means. In times of war, its often dropped, the currency is inflated to pay for war costs and some time after the war is over, usually reinstated... but with a lower amount of gold per currency unit. In effect, wealth was stolen from all savers & people on fixed income to pay for the war.

To some extent, you are also correct by saying, "It is surprising that Austrian economists and alternative media cling to this simplistic view of history which is at best misleading and at worst some kind of propaganda that is not much better than what the mainstream media gives us (i.e., something like "if Nixon had not closed the gold window, America would still be prosperous and have a sound currency," etc...)" But once again, I repeat that what would have happened is the USA under Nixon & subsequent Presidents would have been forced to live within our means or see the gold backing of the US Dollar evaporate. History would have been different. We could not have had "guns & butter", we could not have had the War in Vietnam & The Great Society/War on Poverty at the same time.

The "time bomb" was set for the destruction of the US Dollar in1913 with the establishment of the corrupt private banking cartel, the Federal Reserve. But it was on a leash... a gold standard leash... which to some extent limited the amount of damage it could do. FDR greatly increased the power of the Federal Reserve by outlawing private ownership of gold by US citizens (except in small amounts) thereby making the average citizen powerless to protect the purchasing value of their money by exchanging US Dollars for gold... but foreigners could do so. Nixon then completely cut the leash by cutting all ties to gold, thus NOBODY could protect their US Dollar purchasing power any more. Nobody, that is, who simply held on to US Dollars and neglected to turn them in for gold, when US citizens were again allowed to hold unlimited amounts of gold. But few people had the foresight to do that!

I do not know how long the USA will continue to allow unlimited ownership of gold by US citizens as the paper US Dollar collapses to zero and the price of gold continues to sky-rocket. Virtually all other sovereign money is also now just paper money, backed by only paper & increasingly worthless US Dollars, and to keep the relative values of these currencies about the same, all currencies are in a race to zero value! The price of gold will sky-rocket in comparison to ALL OTHER WORLD CURRENCIES.

I have no idea what the different nations will decide to do as this monetary crises hits the entire world as the world's reserve currency still remains just the worthless paper US Dollar. Drastic things will soon occur, especially for those who still lack the foresight to own gold. 1) Will the ownership of gold again become illegal? 2) Will the US Dollar cease to be the world's reserve currency? My guesses are: 1) no & 2) partly yes.

Closing the gold windows was smart move by Nixon to defend America from the Swiss and French who were redeeming dollars for gold.

Lets give Nixon credit for the War On Drugs also. The drug war is still very much with us. It spawned the prison industrial complex. It proved that Americans would not defend their bill of rights. It was training wheels for the GWOT (Global War On Terror). Nixon is the father of our modern Police State.

Well now that we know what the problem is, lets solve it, it aint that hard to do. . .
End the Fed! And end all interest payments to that private banking cartel.
RP in 2012!

I think that this whole "Nixon did it" story is misleading: in the big picture, it is not about Nixon or any other president, it is the normal timeline of a fiat currency. Nixon had no choice - the United States simply could not afford to let their gold reserves keep flowing into Europe (as they did massively during the late 1960s).

If Nixon had decided not to close the US Gold window, the next president would have been forced to do so anyway because the US gold reserves would have been reduced to practically nothing. It's not like European countries would have suddenly stopped redeeming their dollars in gold if Nixon had not unilaterally closed the gold window.

Of course, this does not mean that Nixon and other US presidents of the period were honest (as pointed out in the video) or that their policies (such as those leading to endless wars or "Great Society" programs) should necessarily be defended.

It is surprising that Austrian economists and alternative media cling to this simplistic view of history which is at best misleading and at worst some kind of propaganda that is not much better than what the mainstream media gives us (i.e., something like "if Nixon had not closed the gold window, America would still be prosperous and have a sound currency," etc...)

I realize that Mr. Rockwell (and perhaps DB as well) will probably not like my comment, but I think that it's time that we stop using simplistic explanations such as this one. DB readers deserve better.

On the other hand, I tend to agree with Mr. Rockwell's conclusions in the second part in the video.