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Gold was also legal tender within living memory in many jurisdictions —- until 1971, you could freely exchange USD for gold and vice versa. In some ways holding
by giaour 5y ago
Gold was also legal tender within living memory in many jurisdictions —- until 1971, you could freely exchange USD for gold and vice versa. In some ways holding gold as a hedge asset is a survival, though as with its intrinsic value, this doesn’t account for its current role in the market.
- njarboe 5y agoThis is not correct. Gold in the US was freely exchanged for about $20 an ounce in the US until the Great Depression when, on April 5th, 1933 Franklin D. Roosevelt signed Executive Order (no. 6102) prohibiting the hoarding of gold coin, gold bullion, and gold certificates, and requiring them to be delivered to the Federal Reserve Bank. After getting all/most of the gold, on January 31st, 1934, the dollar was set to a new price of $35 an ounce by Franklin D. Roosevelt's Presidential Proclamation (no. 2072). Debts and contracts that specified gold in payment were made illegal and people had to use dollars instead of gold for transactions. Exchanging dollars for gold was not possible at a bank and actually illegal to do with your fellow citizens (certain exceptions applied). This ended in 1971, when the Bretton Woods agreement of exchange rates broke down and Nixon took the US dollar off the gold standard and in 1975 we were allowed to buy gold again. [1]https://en.wikipedia.org/wiki/Gold_Reserve_Act https://en.wikipedia.org/wiki/Gold_Reserve_Act