4 votes

August 15, 1971: A day that will live in fiat infamy.

41 Years After The Death Of The Gold Standard, A Look At "How We Ended Up In This Economic Purgatory"
08/15/2012 20:53 -0400 - Kenneth Landon, JPMorgan... Yes, JPMorgan
[The charts are worth a look to see just how far down we have gone.]
http://www.zerohedge.com/news/41-years-after-death-gold-stan...

Landon Lowdown: "Brother, Can You Spare $1.37"?

As we await the latest developments out of the Eurozone and Washington, I take a moment to look back on this very important day in history. If you want to understand current events, then you first have to understand history. How did we get here? More specifically for financial markets, how did we end up in this mess -- this economic purgatory? The answer boils down to a simple proposition on the philosophical level, which I will leave to the reader to identify because my doing so would likely ruffle a few too many feathers. So I will keep the discussion on the concrete-bound level. However, I am willing to say that the political philosophy that drove us to the current state of affairs was responsible for the respective concrete measures implemented over the years. The crisis in confidence that we observe today resulted from cumulative effects of those measures.

This being August 15, 2012, students of the history of monetary economics no doubt are aware that this is the 41th Anniversary of the breakdown of Bretton Woods. It was on this day 41 years ago that President Nixon defaulted on the promise to exchange gold for paper dollars presented for exchange by foreign central banks. Aug 15th marks the anniversary of the collapse of Bretton Woods and the gold-exchange standard that was established after WW II. (Notice that dollar debasement has been bipartisan over the years: Republicans Nixon and Bush and Democrats Carter and Obama have all presided over major declines in the value of U.S. money.)
More at:
http://www.zerohedge.com/news/41-years-after-death-gold-stan...

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Nice synopsis. It's very

Nice synopsis. It's very clear from where our problems arise once one understands this. Way too few of us do.

I must be willing to give up what I am in order to become what I will be. Albert Einstein

SteveMT's picture

Fiat money in the root of all evil.

Real money in the root of all good.
Thanks for the bump.