I had read it was abolished in 1971, but I also read it was in 1933. Which one is it? Also, why was it abolished in the first place?
In: 306
The gold standard was officially abolished in 1970. They did this for many propaganda reasons, such as inflation is good for the people and what not, but I believe this was their way of declaring bankruptcy as good news. Like saying it’s a feature not a bug.
They borrowed too much against gold and couldn’t pay it back. So rather than trying to pay back the debt, they just decided to declare a fake fiat standard instead.
Since 1970, gold, real estate, and stocks (assets that store their value), all increased at 6-8% on average in the last 50 years.
Perhaps coincidentally, the M2 money supply has also grown at 7.1% since 1970 as well, from $589billion to $20.8trillion.
The reason the consumer price index only reports 3.5% over that period is because the CPI doesn’t measure inflation of the money supply, it measures increases in consumer spending. And over that same period, average salaries only increased at 3.5% – a perfect match.
Intuitively, consumers cannot increase their spending unless their salaries increase, especially if they are living paycheck to paycheck (which the majority of citizens are).
Latest Answers