related article HE WHO HAS THE GOLD MAKES THE RULES ...
If you are interested in global economics and the global new world order and its beginnings, then I'd suggest that you save this to your favorites ... Joan Veon provides a wealth of information.
This is an interesting article:
The Decline and Fall of the U.S. Dollar
Shakespeare wrote, "All the world's a stage and (we) all men and women are merely players." You could say that the script the world has been using for the last six months is the most dynamic ever--
The Decline and Fall of the U.S. Dollar. The three acts are: Act I: Past History, Act II: Present Events, and Act III: The Future. Interestingly enough, the players--Mexico, the U.S. dollar, the federal budget and trade deficits, the Federal Reserve, Congress, the United Nations Social Summit, Dr. James Tobin's World Tax, the stock market, and you and I--also create the backdrop.
Preview
This writer has consistently written about the importance of the dollar and feels we are at the most crucial juncture in all of American economic history. Let us look at the past in order to understand the present and perceive the future.
ACT I Past History
Scene 1: The Dollar
Up until 1933, America's currency was backed by gold, and our Treasury issued gold and silver certificates which basically told Americans that, at anytime, they could redeem the paper currency for gold or silver. However, the Great Depression changed all that. Due to the Stock Market Crash of 1929 and the ensuing depression, over 12 million people were unemployed by the summer of 1932. In late 1932 Franklin Roosevelt was elected on his "New Deal for the American People" platform, and his first act as president was to declare a national bank holiday March 4 - 12, 1933. This act was an effort to stem the tide of banks declaring bank holidays of their own due to the number of people withdrawing their savings in gold. On April 20, Roosevelt signed the Emergency Banking Act of 1933, which made it illegal for "Joe Average American" to own gold and required private citizens to turn in their gold but provided for countries who held our currency to convert to gold at any time. All individuals had to turn their gold in and settle for paper currency, with the exception of coin collectors.
In 1944, the "Bretton Woods" Monetary Conference was held by the United Nations in New Hampshire. The purpose of this three-week meeting with 700 delegates from 44 countries was to determine the value of money in the post World War II era. At this conference, the United States dollar, which had the highest amount of gold reserves backing it, was named the international reserve currency of the world. What this meant was that all of world commerce would use dollars to trade and all other currencies would be linked to it at fixed exchange rates. In addition, these countries could convert the dollars they held at any time to gold, if they chose to do so. It is because our currency is used for world commerce that America has not directly felt the kind of inflation which should accompany the kind of federal trade and budget deficits that we currently have.
Realizing the inflationary trend caused by the high cost of the Vietnam War and the fact that America had started printing money, French president Charles deGaulle came to ask that the dollars he held be converted to gold. In 1944, ten years after Roosevelt took America off the gold standard, we had $30B in gold reserves. Due to the number of countries redeeming their paper currency for gold, our reserves fell to $22.8B by the end of 1957, to $17B by the end of 1967, to $10.367B by the week of June 12, 1968 when President deGaulle paid President Johnson a visit. He was the last one who got paid in gold before Richard Nixon who, on August 13, 1971, severed any ties the U.S. dollar had to gold. The countries who still had not converted their dollars to gold ended up with a treasury full of worthless paper, now called "Eurodollars." These dollars are still floating around the world and are currently contributing to the lower value of the dollar since they are in the millions.
Up until 1971, there was stability and some semblance of order in the currency market as most of the world currencies were linked to gold. What did the removal of gold from money really mean? In simple terms, there were no more absolutes with regard to the value of money. Any country's treasury could print and print and print to cover its mistakes or mismanagement of the economy. Without the gold standard, it was open season for running the printing presses to cover "budget deficits."
By 1973, all of the countries of the world, with the exception of Switzerland, went off of the gold standard. After all, if the biggest and strongest country severed its currency from gold, what purpose would there be for other countries to be on the gold standard?
After America closed the gold window in 1971, the 70s were plagued with double-digit inflation.
CONTINUE READING ...The Decline and Fall of the U.S. Dollar
READ ALL OF JOAN VEON'S WORK @http://www.womensgroup.org/
HE WHO HAS THE GOLD MAKES THE RULES ...
