Americans were first exposed to the highly controversial 'Nixon Shock' 50 years ago. It was in August of 1971 when the United States' 37th President halted gold redemption rights for the United States Dollar (USD), therefore breaking all ties fiat currency had with sound money (gold). That announcement changed the course of history and spawned a new era of uncontrolled fiat money production.

 

5 decades ago, the United States had a 5.8% inflation rate in addition to a 6.1% unemployment rate. As of last year, the unemployment rate had increased to 10.2%.

Back then, Nixon engaged Federal Reserve Chairman Arthur Burns, John Connally (the Treasury Secretary at the time), and then Paul Volcker (the Nixon administration's Undersecretary for International Monetary Affairs) to address these issues. Volcker would also eventually go on to become Federal Chairman.

On August 13^th, 1971, these officials got together with twelve other high-ranking Treasury and White House advisors to meet with then Nixon in secret at Camp David. There was much discussion over what the former leader of the American people should do, but in the end, Nixon opted to implement a few key changes on August 15th, relying mainly on the counsel of the self-assured Connally. These measures would then go on to impact the U.S economy to such a large extent that we are still feeling the effects of his decisions to this day.

 

Nixon instructed Treasury Secretary Connally to prohibit, with limited exceptions, the dollar's convertibility into gold or any other reserve assets, closing the gold window and preventing foreign governments from exchanging dollars for gold.

In order to combat inflation, Nixon signed Executive Order 11615 (in accordance with the Economic Stabilization Act of 1970), which imposed a 90-day freeze on salaries and prices. This was the very first time since World War II that the United States government imposed wage and price restrictions. Furthermore, an import tax of 10% was administered to guarantee that American products did not suffer as a result of the predicted volatility in currency rates.

Nixon remarked that rebuilding new prosperity is frequently linked to creating new employment and preventing inflation. As a result, he thought that the American dollar's role as a foundation of monetary stability across the world needed to be safeguarded and maintained in perpetuity.

To that purpose, he instructed Secretary Connally to temporarily suspend the dollar's convertibility into gold or other various reserve assets, apart from situations where the quantities and conditions were considered to be in the best interests of monetary stability and the United States itself.

 

Nixon abolished the gold standard because the United States could no longer conceal the huge military expenditures that were fuelling the Vietnam War.

As part of the Bretton Woods agreement, the United States agreed to keep three-quarters of the world's gold reserves. Nixon's war spending was so huge in fact that other nations began to take note of the U.S printing massive sums of their national currency.

As the years went on, Nixon's words were often considered to have been hollow, as the monetary depreciation of the dollar began to accelerate after 1971, faster than at any given time in American history. He had inadvertently opened the floodgates to a realm of fiat that the world had never quite witnessed before. Nixon’s decisions also prompted the United States military-industrial complex as well as the unaudited Federal Reserve to develop exponentially after 1971.

The national debt has since risen to $28.6 trillion during the terms of Presidents Ronald Reagan, Bill Clinton, George W. Bush, Barack Obama, Donald Trump, and now Joe Biden. Generations of American adolescents have never experienced what it is to live in a society without enormous government expenditure and never-ending wars. Moreover, since 1971, wages in the United States have stagnated like never before, and American citizens find themselves being increasingly unable to afford basic necessities as time passes.

Even now, the future looks bleak, as in 2021 the market and economy continue to be in bad shape, and traders are returning to gold and investing in cryptocurrency assets such as Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), and numerous others. The fact that Dogecoin’s (DOGE) popularity had skyrocketed and the occurrence of the now infamous GameStop incident should speak volumes about how much of a disconnect has been made between the American youth and the U.S government, which makes sense as inflation continues to soar whereas countless adolescents are expected to work for unjustifiable pay.