"With S&P's downgrade of the US's credit rating on Friday, the long-term outlook for the dollar is pretty shaky – but prospects for gold continue to sparkle.
On August 15 1971, President Richard Nixon ended the convertibility of dollars into gold as he attempted to battle soaring inflation and a deteriorating balance of payments.
The move brought to an end the Bretton Woods system, which was established after the Second World War. This made the US dollar convertible into gold at the rate of $35 an ounce. Other currencies were then pegged to the dollar as a means of stabilising the system.
However, US citizens were already banned from hoarding gold. Executive Order 6102 was signed by Franklyn D Roosevelt in 1933 which effectively criminalised the possession of gold bullion by individuals and organisation. People had to surrender their gold to the Federal Reserve – or face up to ten years in prison"...............READ MORE
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