From Financial Sense
By Julian Phillips
"Most investors were not around when the ailing dollar moved from a suspect currency to number 1. When the Gold Window was closed by President Nixon, the dollar weakened and the gold price took off to heights never been seen before.
At the time it seems insane to cut the link of the dollar to gold. From 1968 to 1971 Europe had been receiving dollars from the U.S. forces stationed in Europe and called them Eurodollars. European nation were not happy to receive this currency and were busy converting as much as they could to gold. Led by the cantankerous and difficult President de Gaulle Switzerland, Germany, Italy and France were the main sellers of dollars for gold.
You can imagine the U.S. government facing President de Gaulle and telling them calmly that they had better accept the U.S. dollar in payment for all things imported and must purchase the U.S. dollar to pay for all things American, as well as oil. It was checkmate! Failure to obey would have led to a major oil crisis for the disobedient nation."
read more
No comments:
Post a Comment