The US Withdrawal from Afghanistan and Its Impact on the US Dollar | The Gold Standard #2110

https://www.midasgoldgroup.com/

Dave Deno begins this emotionally charged discussion about how the withdrawal from Afghanistan and other controversial political maneuvers can further weaken the confidence in the US Government and its currency.

The US withdrawal from Afghanistan was chaotic and poorly planned. The human toll was dire, and the aftershocks continued to ripple around the world. It’s no wonder that even our staunchest allies will think twice about the US again, says Marine Corps veteran and a principal with the Midas Gold Group, James Clark.

Will the dollar be immune from the loss of faith amongst the international community? Or will the global community begin to lose enough confidence in the US that it adversely affects our financial stability? The withdrawal from Afghanistan is a wound to US integrity, and it can’t help but cast further doubt the US dollar will remain the world’s reserve currency.

After World War II the Bretton Woods agreement established the US dollar as the world’s reserve currency. Because of our military victories, global confidence in the US was at an all-time high. A delegation of 44 countries converged on Bretton Woods, New Hampshire. The result of the conference was a new international monetary system that settled global balances in dollars, and US dollars were convertible to gold at a fixed exchange rate of $35 an ounce. The United States promised to keep the price of gold set at $35 an ounce and to to adjust the supply of dollars to maintain confidence in future gold convertibility.

Bretton Woods remained until US deficits led to foreign-held dollars exceeding the gold held by the US government. This imbalance between gold and currency implied that the US couldn’t live up to its obligation to redeem dollars for gold at the official price. Following the rules set forth by the Bretton Woods system hampered US economic growth. It certainly flew into the face of US inflationary monetary policy. The tipping point came when the government bean counters realized only about a third of the gold bullion necessary to cover the number of dollars in foreign hands. Consequently, in 1971, President Nixon ended the agreement and the dollar’s convertibility to gold. Closing the gold window of exchange enabled President Nixon to enact his new economic policy known in history as The Nixon Shock.

A few decades later, and an untold number of promises broken, the track record has been grim compared to the post-World War II gold standard era (1947 to 1970). It turns out that having the ability to manipulate the quantity and value of the dollar hasn’t worked out well. The median income for families today is about half of what it would have been otherwise.

The dollar has consistently lost its value. Compared to the pre-Nixon Shock event, our current dollar is worth about a dime. The world has suffered more than a dozen financial crises, including the horrendous 2008-09 meltdown, which many experts warn is just a speed bump to what lies ahead. In the meantime, the average American family cannot save enough for their children’s education or retirement. We continue to mortgage our children’s future for immediate gains today. It is immoral, and there will be a reckoning.

If Nixon and his successors had kept the agreement that one dollar was worth 1/35th of an ounce of gold, a barrel of oil today would sell for a few dollars. The US government would have the global reputation of keeping its promise.

The Gold American Eagle is the most popular bullion coin in the world.

Created by the United States Mint, the American Gold Eagle program was a groundbreaking achievement that immediately captured the imagination and attention of the world.

The Gold American Eagle represents a watershed event in precious metals because it made the US enter the national and global coin market. The South African Krugerrand and the Canadian Gold Maple Leaf were the dominant coins, even in the United States. In the early 1980s, internal resistance to apartheid in South Africa led to increasing violence. President Reagan took a stand against the South African government and banned the Krugerrand. Soon after, the US created the Gold Bullion Coin Act. The US Mint got to work producing 22-karat gold bullion coins in different sizes and denominations. The debut of the American Gold Eagles one ounce happened in October 1986 and was a tremendous success. Gold Eagles dominate the US gold market. They carry the highest premiums over spot value and are also the easiest to liquidate.

_____________________________________________________________________________

Listen to The Gold Standard: https://www.midasgoldgroup.com/gold-standard-radio-show/
Gold IRA: https://www.midasgoldgroup.com/gold-ira/
Invest in Gold: https://www.midasgoldgroup.com/buy-gold/
Guide to Owning Bullion & Coins: https://www.midasgoldgroup.com/bullion-guide/
Read the latest precious metals news: https://www.midasgoldgroup.com/news/