by Jordan Schachtel at The Dossier
On Friday, August 13, 1971, President Richard Nixon ventured to Camp David for a clandestine policy meeting with the chairman of the Federal Reserve, his Treasury Secretary, and several additional top White House officials. Nixon and his cohorts agreed that the Bretton Woods system (which guaranteed a fixed exchange rate for dollar to gold convertibility) was harming the value of the dollar, and they planned to blow the whole thing to smithereens.
Then, on Sunday evening, August 15th, 1971, President Richard Nixon delivered the consequential address to the nation.
He declared [emphasis added in bold]:
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.
Nixon and his advisers were central planners through and through, and they did not predict or care for the unequal wealth distribution that would occur as a result of turning the dollar into a full blown fiat currency. Unsurprisingly, they failed to fix the American economy through their top down firebomb against the gold standard.