Date: Wednesday, 1st April
The gold standard was a monetary system in which the value of countries currency was directly linked to the amount of gold held in reserve. Although not currently used by any government, it was once a widely used system.
A currency backed by a scarce asset such as gold prevents the government from printing more money without consequences.
In 1931 the Bank of England abandoned the gold standard ‘temporarily’; however, it never returned. Following Britains move to abandon the gold standard, a number of other countries followed suit.
In 1933, during the Great Depression, US residents began hoarding gold which led US President Roosevelt to order all gold worth over $100 to be returned to the federal reserve and exchanged for paper money.
The following year the price of gold, set by the US government, was increased to $35/once which, raising the feds balance sheet by 69%, marking the beginning of the end of the gold standard in the US.
In 1971 Nixon announced that the US would sever all ties between the dollar and gold and would no longer convert dollars to gold at a fixed value of $35., putting an end to any remnants of a gold standard.
WTF Happened in 1971 is a website that charts the economic impact and societal shift that has followed the abandonment of the gold standard.
In this interview, I talk to Ben Prentice and Collin, the creators of WTFhappenedin1971.com. We discuss the gold standard, the Bretton Woods Agreement, monetary policy, inflation and hyperbitcoinisation.