How To Revive The U.S. Dollar
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On August 15, 1971, President Richard Nixon shocked world leaders and central bankers by ending, without warning, the U.S. Dollar's convertibility to gold. Historians looking back will refer to this date as "the day the dollar died!"
 
Without this golden anchor, the dollar has been adrift and sinking for 40 years -- as have the world's other paper currencies that for stability had been pegged to the dollar's value.
President Nixon murdered the U.S. Dollar.
He killed America's gold-standard currency and replaced it with a look-alike impostor fiat paper currency that has no guaranteed convertibility to anything by anybody. In an instant the once "Good as Gold" U.S. Dollar was turned into what one Federal Reserve executive called "an I.O.U. Nothing."
In 1788 Thomas Jefferson warned "Paper is poverty... It is only the ghost of money, and not money itself."
"Today's politically-manipulated paper U.S. Dollar is plummeting towards Zero – reflected in gold's price surging above $1,800 an ounce in August 2011. When the dollar crashes, so does America's future as a superpower," write Craig R. Smith & Lowell Ponte in "Re-Making Money", a new White Paper.
The pre-1971 dollar was also a ghost of its former self, an impostor which replaced dollars that ordinary people, not only central banks, could convert into a government-guaranteed quantity of silver, the "poor man's gold" advocated as money by progressives such as William Jennings Bryan.
Mr. Nixon shut the last dollar convertibility window for gold, just as President Lyndon B. Johnson did for silver. Both purportedly acted to prevent foreign nations from draining America's precious metals with excess paper dollars they printed to fund the Vietnam War.
Today Fort Knox's gold supply is under the control of the Federal Reserve Board, a private cartel of banks. The Fed is resisting and delaying a long-sought court order that it submit to at least a partial audit.
The Obama Administration and Democratic majority leaders in Congress have blocked legislation by Rep. Ron Paul (R.-Texas) that would require an independent audit to determine how much gold remains in Fort Knox.
Gold prices rose from $1,600/oz. to over $1,800/oz. in August, signaling the global shift toward restoring a gold standard for individuals, institutions, central banks and nations!
A gold standard would constrain government spending, now on a trajectory to double again over the next decade, pushing up gold prices toward $3,000 an ounce.
 
Most politicians always want to spend more, especially when they have a war to fight or new domestic plans to bankroll. If they could simply print any amount of money, government would expand without limit.
However, when each printed dollar is convertible at a fixed rate to gold, this (at least in theory) means that a lawmaker or president can print only as much paper currency as the government has gold to redeem. Gold becomes golden handcuffs on politicians -- what economic historian Barry Eichengreen disapprovingly called "golden fetters" on politicians' ability to manipulate monetary policy by conjuring paper stimulus money out of thin air.
Such constraint on politicians -- whether self-servingly wicked or paving a road to hell with good intentions -- is what America's Founders intended. As Thomas Jefferson said of power-hungry politicians, the people should "bind them down with the chains of the Constitution."
The Founders set a precious metal standard for money to protect all who save money and want it to retain its value, who want their dollars to be an honest and reliable medium of exchange, and taxpayers who, like America's Founders, want a limited and frugal government.
This, of course, is why so many of today's politicians hate the gold standard.
Until we restore our currency's anchor via a new gold standard, or some other approach that deters politicians from printing fiat money, our economy and dollar will continue their slippery downhill slide in value and reliability.
Paper money is a faith-based currency, we repeatedly have written. Faith in U.S. paper dollars both here and in other nations declines every time our politicians and the Federal Reserve conjure another batch of money out of thin air.
 
New White Paper Explains How to Reverse Nixon's Error.
 
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