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How Nixon Killed Keynes’ Phony Gold Standard

Written by Gary North on August 20, 2016

My generation says: “Each of us can remember where he was when he heard about Kennedy’s assassination.

I can remember where I was when I heard about Nixon’s killing of the phony gold standard that John Maynard Keynes and the Soviet spy Harry Dexter White designed in 1944.

It was a Sunday afternoon: August 15, 1971. I was preparing to leave Riverside, California to move to Irvington-on-Hudson, New York, to get my first full-time job. I would soon be a senior staff member of the Foundation for Economic Education. I would never again attend a graduate seminar. Free at last! Free at last!

The phone rang. My friend Bob Warford told me the news. Nixon had just announced that the U.S. Treasury would no longer sell gold to central banks at $35 an ounce or any price. He had floated the dollar: no more fixed exchange rates. It was the end of the Bretton Woods agreement. He had also declared full-scale price and wage controls. He had done this without consulting with Congress.

Here are the first two paragraphs. They are the words of a desperate man who refused to face reality on two fronts: foreign policy and monetary policy.

I have addressed the Nation a number of times over the past 2 years on the problems of ending a war. Because of the progress we have made toward achieving that goal, this Sunday evening is an appropriate time for us to turn our attention to the challenges of peace.

America today has the best opportunity in this century to achieve two of its greatest ideals: to bring about a full generation of peace, and to create a new prosperity without war.

The Vietnam war did not end in his term of office. It ended in defeat in 1975.

This nation is still at war in Afghanistan. It is the forever war — the war on terrorism.

The controls were supposed to last 90 days. They lasted until April 1974.

Real wages began to stagnate in 1973.

(For the rest of my article, click the link.)

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