President Richard Nixon took the American dollar completely off any gold standard in 1971. Unlike our current fiat currency, money backed by gold cannot be created arbitrarily by government action. This restraint is key to preventing artificial inflation and the devaluation of a currency. It removes “currency uncertainty,” keeping the credit of the issuing monetary authority sound, and encouraging lending. The gold standard also serves to prevent governments from starting unnecessary wars, as they can no longer simply print the funds necessary for the war machine.
If you have a pulse, you are aware that US dollars are losing purchasing power and the hidden tax of inflation is slowly draining the savings of most Americans. If you are a goldbug, you have been dreaming of a return to the gold standard and responsible monetary policy. Of course, those in power would have to go down kicking and screaming (preferably in handcuffs) before this would happen. But lest you have any doubt regarding which standard would best hold value and conserve your hard-earned wealth, consider the following example:
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