Goodbye, gold redemption of the dollar
Forty years ago today, the entire world was launched into a brand new financial experiment. Viewing matters from 2011, how do we like the results?

Article Highlights

  • 40 years ago, a peacetime world decided to no longer link money to precious metals #goldstandard

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  • The pure fiat money system trusts the natural stability of honest and intelligent gov't officials...over reliable gold?

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  • Closing the gold window was supposed to stabilize the #dollar...well how is that working out for us now?

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Forty years ago today, the entire world was launched into a brand new financial experiment: a peacetime global monetary system with no link at all to redemption of money in precious metals. In other words, for the first time without being in a big war, governments offered people purely fiat money on a worldwide basis. This could be viewed as the logical end point of the modern trend of increasing the power of central banks.

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About the Author

 

Alex J.
Pollock
  • Alex J. Pollock is a resident fellow at the American Enterprise Institute (AEI), where he studies and writes about housing finance; government-sponsored enterprises, including Fannie Mae, Freddie Mac, and the Federal Home Loan Banks; retirement finance; and banking and central banks. He also works on corporate governance and accounting standards issues.


    Pollock has had a 35-year career in banking and was president and CEO of the Federal Home Loan Bank of Chicago for more than 12 years immediately before joining AEI. A prolific writer, he has written numerous articles on financial systems and is the author of the book “Boom and Bust: Financial Cycles and Human Prosperity” (AEI Press, 2011). He has also created a one-page mortgage form to help borrowers understand their mortgage obligations.


    The lead director of CME Group, Pollock is also a director of the Great Lakes Higher Education Corporation and the chairman of the board of the Great Books Foundation. He is a past president of the International Union for Housing Finance.


    He has an M.P.A. in international relations from Princeton University, an M.A. in philosophy from the University of Chicago, and a B.A. from Williams College.


  • Phone: 202.862.7190
    Email: apollock@aei.org
  • Assistant Info

    Name: Emily Rapp
    Phone: (202) 419-5212
    Email: emily.rapp@aei.org

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