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A Case for Gold as Monetary Backing

A distressed Nixon switched monetary backing from gold as intermediary, value yardstick and financial reserve to what exactly? Nobody knows, a nation’s general productivity perhaps, i.e. fiat. Thereby setting the rails for human kind’s biggest test ever. Which, with hindsight, it failed dismally.

And, gold backing provided a level playing field for assessing value and setting limits and was relatively unencumbered from special interests. Fiat, on the other hand, required loads of integrity and professionalism as well as quite a few additional checks and balances,  to allow it to work fair and equitable in the interest of all.

Initially this actually seemed to function quite well. Particularly as long as the free market proponents, believing in “a market left well alone, within certain restraints, will look after everybody’s well-being relatively equitably automatically”, ruled the roost.


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