The 1971 Termination of Gold/Dollar Convertibility Richard Nixon's August 1971 decision to suspend the convertibility of dollars into gold was one of the most important chapters in modern economic history. Nixon's move, which was precipitated by rising U.S. balance of payments deficits, ended the system of fixed exchange rates that had been established at the Bretton Woods conference of 1944 and ushered in a regime of floating rates. The 1974 Congressional Budget and Impoundment Act created a set of institutional changes designed to help Congress regain power over the budget process. The Act was inspired by Richard Nixon's refusal to disburse nearly $12 billion of congressionally-appropriated funds in 1973-74 through the executive power of impoundment, as well as more generalized fears about the budget deficit. Nixon claimed that the deficit was causing high inflation and that as a result he needed to curb government spending. To this effect, in the 1972 presidential election he called on Congress to grant the President authority to cut federal spending so as to keep the budget under control. Congress opposed Nixon's proposal and instead sought to reform Congress' budgetary role. In 1972 Congress created a Joint Study Committee on Budget Control which called for procedural reforms to enable Congress to examine the federal budget from an "overall point of view, together with a congressional system of deciding priorities." Following Nixon's impoundment Congress acted on these recommendations and in 1974 passed the Act over the President's veto. Under the Bretton Woods agreement of 1944 the U.S. dollar was the only national currency directly backed by gold. Other currencies were valued against the dollar, which could be exchanged through the U.S. government's "gold window" for a fixed amount of gold. Over the course of the 1960s, however, this system came under strain. Spending on the Vietnam War and Great Society as well as the revival of Western Europe and Japan led to a decline in the U.S. balance of payments. This, in turn, placed significant pressure on the dollar: U.S. gold holdings could not keep pace with the expanded money supply required by domestic and international economic growth. Fearful that other governments would rush to convert their dollars into gold and thereby precipitate a run on the dollar, on August 15, 1971 Richard Nixon unilaterally suspended dollar-gold convertibility. This action, which Nixon presented as part of a plan to combat inflation, effectively ended the Bretton Woods monetary regime and brought about a system of floating exchange rates within a few years. The implications of the "Nixon shock" for domestic and international affairs were numerous. Since the dollar no longer had to be backed by gold, the end of the Bretton Woods fixed exchange rate system increased the freedom of the U.S. Federal Reserve to engage in counter-cyclical monetary policy. The advent of floating exchange rates in 1973, after efforts to revive the fixed exchange rate regime failed, also facilitated global capital flows. Now, at the time when I am writing this review, October 21, 2015, the US National Debt has escalated to about 19 TRILLION DOLLARS! The gold prices before the convertibility, gold was about $35 an ounce. Now, it hovers around $1,110, with constant fluctuations. That is because the dollar became nothing more than a Fiat currency. In other words, a piece of paper that by law is assigned a value, be it $1, $5, $20, $100, etc. Nonetheless, it is just a piece of paper, and soon-not that I want to appear to be a pessimist-may be worth nothing. However, I find the 2015 Gold American Eagle (GAE) 1/4oz (Quarter Ounce) $10 BU a good way to start saving my hard-earned money with this tangible asset. I like quarters over whole ounce-coins, even though they cost slightly more than the full ounce coins, I can sell them individually, when I need the cash. To my surprise, every time I get more money than what I paid for it!Read full review
Verified purchase: Yes
I am so happy with this beautiful and valuable coin! I only try to buy the best coins within my financial framework as I am only just getting started!
Verified purchase: Yes
Nice little coins, I give them as gifts. Very happy with purchase.
Verified purchase: Yes
love it
Verified purchase: Yes
gold is gold whats not to like about gold?
Verified purchase: Yes