Monday, April 11, 2011
Real Money is Gold, Silver, and Oil, Not Paper
I found these two illustrations interesting given that the countries of the world are revisiting the Brenton Woods agreement. On August 15th of 1971 the United States president at the time Richard Nixon closed the gold reserve window. This meant that foriegn holders of US currency could no longer get their paper currency swapped with physical gold. After 1971 the paper money supply and people's attitudes toward debt have gone through the roof. Hopefully the world always has faith in the US dollar because things will get ugly if the world doesn't.