Tag Archives: gold standard

All Fiat Currencies Have Died. We Have a Fiat Currency

This is a little scary, especially when you see how it is already going for some countries in Europe.

The US Dollar and the European Union’s Euro are fiat currencies, meaning that they have no intrinsic value and are not backed by anything that has intrinsic value. They have value only because the respective governments declare that they do. Fiat is a Latin word meaning “let it be done” or “it shall be.”

All fiat currencies throughout history have failed.

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The Bad Economy and the Death of the Dollar

I was looking for something to listen to and came across Robert Kiyosaki‘s audio book – Increase Your Financial IQ. It was published in March 2008 and has some very good, current information. I highly recommend it. There was some important information in the first chapter that I want to share here.

In 1971 President Nixon took the US off the gold standard, which changed how our money works. Prior to 1971, the dollar was based on gold, which has intrinsic value. To save money was equal to saving gold, so it made sense to save money for retirement or college because it would hold value.

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Diminishing Value of the Dollar

The value of the dollar has been decreasing over the past several years.  You know that.  You know why too.  The government keeps pumping out more money in the form of bailouts and other programs.

Until about 30 years ago, the value of the US Dollar was tied to the value of gold.  We were on a gold standard.  In 1971 President Nixon abolished the gold standard which made it possible for the government to have more money printed without it being backed up by anything.  You’ve got to hear Glenn Beck’s description of this and see his chart.  It is amazing and somewhat disturbing.

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Diversify Your Savings with Gold

I have been learning about gold recently. Gold has been used as money since before recorded history. In more modern times it became easier to carry paper money and less valuable coins to pay for goods and services, but the money was still backed by gold and silver. I actually have an old $1 bill that bears the words “Silver Certificate”. In 1971 President Nixon took the US off the gold standard changing American currency to fiat currency.

From Wikipedia: “Fiat money achieves value because a government accepts it in payment of taxes and says it can be used within the country as a “tender” (offering) to pay all debts.”

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