An excellent article on the gold standard and what has happened to the world since we went completely off it in 1971. A quote:
Everything changed because the United States, having removed gold from the world monetary system, could “pay” everything in dollars, and without the gold standard as a limiting institution, it could print dollars ad libitum – without limit. Thus, in the 1970s the United States started to buy huge amounts of high quality products from Japan, while the Japanese boasted: “Japan sells; Japan does not buy.” A SITUATION THAT WAS IMPOSSIBLE UNDER THE GOLD STANDARD BECOME PERFECTLY POSSIBLE UNDER THE FIAT DOLLAR STANDARD. The Japanese became gigantic producers, their country an island transformed into a factory. Japan accumulated vast reserves of dollars sent from the US in exchange for Japanese products. This in turn triggered the de-industrialization of the US.
Take for example the US manufacturers of T.V. Some of the famous US factories that built TV receivers by the millions were “Philco”, “Admiral”, “Zenith”, and “Motorola”. The Japanese had better and cheaper products, and since the abandonment of the gold standard allowed Japan to sell without buying in turn, and allowed the US to buy without selling in turn, the result was that all the huge factories producing these TV’s in the US were closed down. That’s how “going off gold” closed down US industry.
Do read the whole thing – its what I’ve been one about for a long time, but this article explains it far more ably than I could.
Getting back to the gold standard is the only way for us to revive a genuine economy which has work and materials as the basis for wealth. We’ve used funny-money for decades and piled up massive amounts of debt to mask the loss of our wealth-creating industries. The problem we have now is the natural and inevitable outcome of the system we set up starting really in the 1930’s, but which only came to full flower in the 1970’s – and which has been progressively wrecking our economy ever since.
We can do this – all we have to do is trade in our nearly worthless fiat money at a 100-1 ratio, peg the US dollar as 1/35th of an ounce of gold (or the silver equivalent) and we’ll be back to a stable currency which will permit the genuine creation of wealth. On a gold standard, we went from an agricultural backwater of the world to the pre-eminent global industrial power…since we went off gold, we’ve not only lost our industrial pre-eminence, but we don’t even farm as much as we used to.
You want America back? There are lots of things we need to do – but gold plating our finances is vital to all else we’ll wish to do.
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