Aug. 15, 2011, 4:52 a.m. EDT
Gold-standard debate back, 40 years after Nixon
Commentary: But this time, the role of the banker has changed
LOS ANGELES (MarketWatch) — Exactly 40 years ago Monday, the U.S. dollar formally became a fiat currency, as then-President Richard Nixon “closed the gold window” and ended the greenback’s precious-metal guarantee.
And though a market price for the dollar was soon accepted as the new normal, the debate over a return to the gold standard has now resurfaced in a way we haven’t seen in the four decades since.
Many practical hurdles to a gold dollar exist — most significantly the tremendous difficulty in defending a metal-backed currency, even if the new gold standard opened with a major devaluation for the U.S. unit.
But putting that aside, the debate itself is interesting and echoes the previous major gold controversy in the late 19th and early 20th centuries.
Back then, no one was calling for a market-priced fiat currency. Instead, the debate revolved around whether the dollar should be backed by gold alone, or by a mix of gold and silver, since the U.S. had the latter in abundance.
Feelings were intense on both sides, as witnessed by 1896 Democratic presidential candidate William Jennings Bryan’s famous speech decrying what he saw as Republican attempts to “crucify mankind upon a cross of gold.”
Full article: http://www.marketwatch.com/story/gold-standard-debate-back-40-years-after-nixon-2011-08-15
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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