2 ms·

Can you provide some references to them doing this the first time? You seem to like posting comments about the "Nixon shock" without providing anything to back

by greggoB 9mo ago

Can you provide some references to them doing this the first time? You seem to like posting comments about the "Nixon shock" without providing anything to back it up.

direwolf20 9mo ago
Sorry — I thought this was well known. Until 1971 a united states dollar was an IOU for a certain amount of gold. The US cheated by printing more IOUs than the amount of gold it had. When foreign countries started withdrawing gold at a rate the US thought it would run out, in 1971, it cancelled all IOUs and kept the remaining gold for itself. https://www.federalreservehistory.org/essays/gold-convertibility-ends https://www.federalreservehistory.org/essays/gold-convertibi...
- greggoB 9mo ago
  So you're referring to the end of the Bretton Woods System, which is its formal name. > The US cheated by printing more IOUs than the amount of gold it had. From the article you posted, it looks like the US was dealing with an issue whereby their reduction in global output meant that a reducing demand for dollars could cause a run on gold. I don't know if I would characterise this as "cheating" per se. The article states that there were many efforts, jointly between the US and other countries, to maintain the system, but these ultimately failed. So I don't really get how this backs your claim that the US cheated? Sure it was controversial, and I'm sure there were many peoole who were unhappy about it, but it looks like they had little choice, given the system was failing and they were dealing with an extraordinary inflation crisis to boot.
  - direwolf20 9mo ago
    If you've only printed enough dollars for the amount of gold you have, a run is no problem because you can exchange as much gold as people want. Gold and dollars can be allowed to be freely exchanged, no matter what. If you've cheated by printing more dollars than you have gold, then you have a problem.

by greggoB 9mo ago

Can you provide some references to them doing this the first time? You seem to like posting comments about the "Nixon shock" without providing anything to back it up.

direwolf20 9mo ago

Sorry — I thought this was well known. Until 1971 a united states dollar was an IOU for a certain amount of gold. The US cheated by printing more IOUs than the amount of gold it had. When foreign countries started withdrawing gold at a rate the US thought it would run out, in 1971, it cancelled all IOUs and kept the remaining gold for itself. https://www.federalreservehistory.org/essays/gold-convertibility-ends https://www.federalreservehistory.org/essays/gold-convertibi...

greggoB 9mo ago
So you're referring to the end of the Bretton Woods System, which is its formal name. > The US cheated by printing more IOUs than the amount of gold it had. From the article you posted, it looks like the US was dealing with an issue whereby their reduction in global output meant that a reducing demand for dollars could cause a run on gold. I don't know if I would characterise this as "cheating" per se. The article states that there were many efforts, jointly between the US and other countries, to maintain the system, but these ultimately failed. So I don't really get how this backs your claim that the US cheated? Sure it was controversial, and I'm sure there were many peoole who were unhappy about it, but it looks like they had little choice, given the system was failing and they were dealing with an extraordinary inflation crisis to boot.
- direwolf20 9mo ago
  If you've only printed enough dollars for the amount of gold you have, a run is no problem because you can exchange as much gold as people want. Gold and dollars can be allowed to be freely exchanged, no matter what. If you've cheated by printing more dollars than you have gold, then you have a problem.