Why The Financial And Economic Crises Continue
On August 15, 1971, President Richard Nixon severed the dollar’s link to gold. This episode of What’s Ahead explains how this decision has cost the economy trillions of dollars in lost growth and why a gold standard is crucial for higher long-term growth.
If after that fateful day the U.S. had maintained the average rate of growth it had achieved for the previous 180 years under the gold standard, the economy would now be at least 50% larger than it is today.
Ponder that for a moment. The typical, pre-pandemic American household income would have been $100,000, not the actual $66,000 it was.
The gold-based Bretton Woods monetary system that was created in the closing days of WWII and blown up on August 15, 1971 had worked remarkably well. Unfortunately, our political leaders and most economists back then didn’t understand the basics of a gold-based system or how to manage…