Nixon’s gold treachery made me a cynic – The Property Chronicle
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Nixon’s gold treachery made me a cynic

The Professor

Fifty years ago, on 15 August 1971, President Richard Nixon announced that the US government would cease honouring its pledge to pay gold to redeem the dollars held by foreign central banks. Nixon declared he was taking “action necessary to defend the dollar against the speculators.” But there was no way to defend the dollar against politicians. Nixon touted his default as therapy for his tormented fellow citizens, promising it would “help us snap out of the self-doubt, the self-disparagement that saps our energy and erodes our confidence in ourselves”. Nixon wrapped his decree with lofty political rhetoric, appealing to the nation’s “greatest ideals” and promising a “new prosperity” that “befits a great people”.

The dollar thus became a fiat currency – something which possessed value solely because politicians said so. Nixon spurred the Federal Reserve to create an artificial boom to boost his reelection campaign. To suppress the damage from a flood of new money, he imposed wage and price controls, making it a crime to raise prices without government permission.

At that time, I was working in a peach orchard in rural Virginia for 10 hours a day, reaping $1.40 an hour and all the peach fuzz I could take home on my arms and neck. Nixon’s wage controls doomed any chance of getting that raise to $1.45 an hour. But no loss – I was leaving that job soon to go back to high school. I was 15 at that time and an avid coin collector. I soaked up the rage at the reckless federal policies that permeated Coin News and other numismatic publications. ‘Government as scoundrel’ was the theme of many editorials and articles I read in those periodicals in the following months and years. I had no savvy on economics, but my gut sense told me something was profoundly amiss. Nixon’s decree spurred my reading and researching. 

In the era of this nation’s birth, currency was often recognised as a character issue – specifically, the contemptible character of politicians

The Professor

About James Bovard

James Bovard is the author of 10 books, including Public Policy Hooligan, Attention Deficit Democracy, The Bush Betrayal and Lost Rights: The Destruction of American Liberty. He has written for The New York Times, Wall Street Journal, Playboy, Washington Post, New Republic, Reader’s Digest and many other publications. He is a member of the USA Today Board of Contributors, a frequent contributor to The Hill and a contributing editor for American Conservative

Articles by James Bovard

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