This is one of my pet peeves.
While gold doesn’t have to be the standard for money, there must be some standard.
And since the Fed can print as much money as they need to inflate away their obligations, the dollar is not that standard.
Case in point: look at this graph of inflation over time.
You have to look at the graph and say: hmmm. What happened in 1940 and especially in 1971 that causes inflation to increase suddenly:
Answer: coming off of the gold standard. It first started in 1944 under the Bertton Woods International Monetary Agreement, and it was completely abandoned in 1971 by President Nixon (“Nixon Shock”).
You don’t have to be a rocket scientist to see the damage that has been done by abandoning a standard for currency.
Authored by James Rickards via The Daily Reckoning:
Trump has already exerted more influence over one institution than any other president in over 100 years — the Federal Reserve.
That’s because Trump has had more control over Fed personnel than any president since the Fed was founded in 1913. As I’ve written before, Trump now “owns” the Fed.
When Trump was sworn in, he inherited two vacant seats on the seven-person board of governors of the Federal Reserve System. Holders of those two seats are also members of the Federal Open Market Committee (FOMC), the group that sets U.S. interest rates and monetary policies.
President Obama also had the same vacancies, but he did not nominate anyone to fill the seats because he doubted his chances of getting the nominees past the Republican-controlled Senate and he was sure “President Hillary” would do the right thing and appoint pro-Democratic nominees.
In the end, Trump beat Clinton and the vacancies fell to Trump. Then Trump got another windfall. Within 14 months of becoming president, three additional Fed governors resigned (Dan Tarullo, Stan Fischer and Janet Yellen), and Trump suddenly had five vacancies to fill, or 70% of the entire Fed board.