Economist – BUTTONWOOD – Aug 13, 2011
Under the Bretton Woods regime, world currencies were pegged to the dollar, which in turn was tied to a set price of gold. Central banks had the right to convert their dollar holdings into bullion. But on August 15th 1971 Nixon, in the face of economic difficulties, closed the gold window, devalued the dollar against bullion and imposed a 10% surcharge on imports. The era of paper money and floating exchange rates had arrived.
At the time The Economist welcomed the move, proclaiming “Come on, the water’s fine!” on its cover, below a picture of a cigar-smoking bather, dressed in a dollar swimsuit. We argued that floating exchange rates would cause less disturbance than the fixed-rate regime.
However, currency crises didn’t go away. …In terms of the old gold measure, the dollar has devalued by 98% since the end of the Bretton Woods era.Go to story
The Independent – STEPHEN FOLEY – Aug 16, 2011
Is gold money? The Republican presidential contender Ron Paul asked the question of Ben Bernanke the last time the Federal Reserve chairman appeared before Congress, and the bearded guardian of America’s monetary policy feigned to look perplexed by the very idea. “No,” he said, after a long pause. “It’s a precious metal.”
That confrontation between Ron Paul and Ben Bernanke didn’t end with the Fed chairman’s “no”. Mr Paul followed up by asking why, if it was not money, central banks held gold at all. “Tradition,” Mr Bernanke replied. “It’s an asset. I don’t think Treasury bills are money either… The reason people hold gold is as a protection against what we call tail risk – really, really bad outcomes – and to the extent the last few years have made people more worried about the potential of a crisis, then they have gold as a protection.” Go to story
excerpt from lecture on Srimad-Bhagavatam 1.15.45, Los Angeles, December 23, 1973:
Just like we are now speaking on the slogan, “In God We Trust.” Is that the slogan, “In God We Trust”? So this is a slogan, but it is the duty of the government, that “We are using this slogan, but actually what we are doing about people’s education that they may know what is God and then trust?” But everyone is godless. And still, as a matter of fashion, we are writing, “In God We Trust.” This is another cheating. Nobody trusts in God, and they write, “In God We Trust.” And unless I write… Of course I do not wish to say very harsh word, that unless I cheat you that way, how a man will accept one piece of paper as one thousand dollars? [laughter] You see? It is a grand cheating, that “I am giving one thousand dollars to you.” But if I value, it is not even one farthing. This is called maya [illusion]. It is not, but I accept. I accept. If people become enlightened, “No, we are not going to accept this piece of paper as one thousand dollars. We must have gold,” so many things will be solved immediately. So many things. But because we agree to be cheated, the cheaters are cheating and things are going on wrong. This is called Kali-yuga.