What the F#%^ Happened in 1971? The Beginning of our Current Economic Collapse…
Nixon Takes Us off The Gold Standard and Dollar Debasement and Economic Collapse Begins
Nixon Addresses the Nation When He Declares the US to Be Bankrupt and Unable to Pay Its Debts in Gold As Promised. While he didn’t use those terms that is the correct term for when you can’t pay what you have promised
Etienne Note: Hat Tip to Epic Cash’s Max Freeman for bringing this website to my attention https://wtfhappenedin1971.com/. What is most interesting is that the owner of the site failed to “Lead with the Punchline” and doesn’t explain What the F%#$ Happened in 1971? The short answer is that President Nixon took the country off the final vestiges of the gold standard. The beginning of the debasement started with communist President Franklin Delano Roosevelt in 1933 but foreign governments could still purchase and redeem US Government Bonds in physical gold up until 1971. Here is a summary from Quora:
It was a Sunday, August 16, 1971, and President Richard Nixon suspended convertibility of the US dollar into gold, effectively ending the 25-year Bretton Woods era of fixed currency exchange rates against the US dollar. US gold reserves were facing enormous pressure due to balance of payment concerns, the Vietnam War debt and Great Society programs, and the ensuing monetary inflation. A growing number of countries began to redeem their dollar holdings for gold.
In addition, the German withdrawal from the Bretton Woods agreement sparked panic and a currency crisis. By the end of June 1971, $22 billion in assets had left the US. In July 1971, Switzerland redeemed $50 million for gold and one month later in August, pulled its Swiss Franc from the Bretton Woods agreement. At the same time, France redeemed $191 million for gold by sending a French battleship to New York to take delivery of the gold from the Federal Reserve and to bring back to France.
France sent a warship (some reported it as a battleship but France had none. It was a destroyer) to New York (other reports indicated it was New Jersey) harbor in early August 1971 with instructions to bring back its gold from the New York Federal Reserve Bank. Etienne Note: The same Quora article reports it was actually a French ASW Instruction Ship called: Ocean. It was reported to be a Battleship by this 2016 Paper on the Incident: A "Barbarous Relic": The French, Gold, and the Demise of Bretton Woods
In August 1971, French president Pompidou sent a battleship to New York harbor to remove France’s gold from the vault of the New York Federal Reserve Bank and to transport it to the Banque de France in Paris. Soon thereafter, gold accounted for 92 percent of French reserves. On August 11, the British requested that the Treasury remove the $3 billion of gold from the U.S. depository of Fort Knox to the New York Federal Reserve vault, where the gold of foreign governments was stored. As Paul Volcker, who was then treasury undersecretary for monetary affairs, put it: “If the British, who had founded the system with us, and who had fought so hard to defend their own currency, were going to take gold for their dollars, it was clear the game was indeed over.”70 When Nixon spoke on August 15, 1971, the U.S. held less than 10,000 tons of gold, less than half of what it once had.
“I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can’t take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can’t stop.” – F.A. Hayek 1984
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