USA government secured dollar price of gold at the end of the First World War until August 15, 1971. This Sunday, Richard Nixon announced a new policy. USA government would no longer exchange dollars for gold at $ 35/ounce when presented with dollars from foreign governments and central banks.

Until then, had the gold price in the world a floor: $ 35/ounce. Gold was rigged commodity. It is not a free market commodity. None sold gold under $ 35/ounce because the U.S. Treasury will buy gold at that price. The U.S. Treasury has guaranteed a market for gold. It was not a free market.

It is always the meaning and effect of a gold standard guaranteed by the government. During the time the investing public believes the government is not going to break his contract, the gold price will not rise above or below the price fixed in the currency of the country, except for transportation costs, which are very low compared with the price of gold.

In these circumstances, the performance of gold is the same currency in the performance.

Why the gold price does not fall during a deflation in the U.S. since 1930 because of the importance of money in 1933 was paper money into gold. The paper currency out of banks to appreciate. This is intended to deflation: money to be appreciated. Therefore, the bank was run 1930-1933. Depositors said that the currency outside of banks has been more sure that the certificate of deposit banks, which are not insured by the year 1934. They withdrew their money. More than 6,000 banks went under – but not New York City multinational bank. Federal Reserve ensured.

There was a time earlier than the nineteenth century, when government money was just money because the government has collected money for a fixed price for gold. Now supported by the value of government money.

After the First World War and especially after World War II, gold is more money. It is simply a government-rigged commodity, as it could be sold at a fixed price for the U.S. Treasury for money. It is illegal for Americans to own gold bullion, 1933 to December 31, 1974.

It is not the government fixed price of gold today. Therefore, any argument based on the gold during the Great Depression, when the gold coin was still money, is not only ill-informed, is deliberately misleading. The journalists who continue to repeat this argument do not know what I said, but want to keep my readers to consider the complaint. They do not answer me. Since I can not give an answer without departing from the logic of free market economics: supply and demand.

Gold was not a free market in goods from 1844 when the minutes of the Bank of England were legal tender and redeemable in gold until August 15, 1971, when Nixon ended the gold redeemable Legal to foreign governments and central banks. Gold has had a price support by the U.S. government after the First World War: $ 20 one ounce until 1933, $ 35 after.

Roosevelt announced in 1933 it was illegal for Americans to own gold bullion. He forced the law-abiding Americans to deliver their gold to the government of $ 20 an ounce. Then, when gold is introduced, its price has risen by 75% to U.S. $ 35. The government pocketed the difference.

This was the devaluation of the dollar. Dollar gold content of 40%.

The Great Depression was a period of monetary deflation. Ours is not. The Great Depression was an era of systems of price deflation, 1930-1933. Ours is not. The Great Depression was a time to a minimum price guaranteed by the government for gold. Ours is not.

gold price does not take place until the U.S. government blocked the sale of $ 35 per ounce of gold by foreign governments and central banks. Nixon announced that the policy of August 15, 1971.

Low gold prices in 2001 to $ 257. Gold has been a rotten investment, 1980-2001: $ 850 million at the 257th Silver was worse: $ 50 to $ 4 However, consumer prices rose by about 100%.

Fact: The gold is not much time, even when the monetary inflation and inflation stable. Precious metals bubble popped in 1979, in January 1980 in response to tighter monetary policy the Fed has never return to the gold peak in January 1980: $ 2,100 $ 1,980.

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