Forty years ago, President Richard Nixon severed the final link between the dollar and gold. For the first time since Sir Isaac Newton established the British gold standard in 1717, all of the world’s major currencies during a time of peace were free to float against one another and to fall in value against precious metals. The consequence has been a debasement all the world's currencies, an ever more cyclical economy, a 40-year hiatus in real wage increases for workers and a growing fear of yet more financial crises created by monetary instability.
We are now at the beginning of a popular effort to restore gold-backed money to the center of global economic activity.
In June, Senators Jim DeMint (R-S.C.), Mike Lee (R-Utah) and Rand Paul (R-Ky.) introduced the Sound Money Promotion Act that would remove the 28% federal tax on gains realized in the use of gold or silver coins recognized as legal tender for use within a state.
Within the next few weeks, signatures will be collected to launch an initial referendum that would require the Swiss National Bank to repatriate all of its gold holdings to within the borders of Switzerland, prohibiting it from selling any more of its gold, and requiring a minimum 20% of its assets be gold.
In his Forbes article, "Monetary Reform: The Beginning Of The Beginning", Charles Kadlec gives us the background on the movement to return the world to a gold standard.
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