August 15, 2013 by History in a Hurry
Anniversary: How Nixon the Keynesian Destroyed the Monetary Regime of Keynes
Gary North – August 15, 2013
It was 42 years ago today, on a Sunday, that President Richard Nixon went on television and announced to the American people that he was closing the gold window the next day and imposing full-scale price and wage controls on the American economy. He signed an executive order. Congress had nothing to say about it, and therefore said nothing.
“The third indispensable element in building the new prosperity is closely related to creating new jobs and halting inflation. We must protect the position of the American dollar as a pillar of monetary stability around the world.
In the past 7 years, there has been an average of one international monetary crisis every year…
I have directed Secretary Connally to suspend temporarily the convertibility of the dollar into gold or other reserve assets, except in amounts and conditions determined to be in the interest of monetary stability and in the best interests of the United States.
Now, what is this action — which is very technical — what does it mean for you?
Let me lay to rest the bugaboo of what is called devaluation.
If you want to buy a foreign car or take a trip abroad, market conditions may cause your dollar to buy slightly less. But if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today.
The effect of this action, in other words, will be to stabilize the dollar.”
So, it would stabilize the dollar. This, from the man who told the media in November 1962, after his defeat for Governor of California, “You won’t have Dick Nixon to kick around any more.” If you want to see the decline of the dollar since 1971, click here.