In 1974, then-President Gerald Ford allowed Americans to freely trade gold. Gold prices exploded. Between 1974 and 1980, gold prices rose nearly 400%. Inflation skyrocketed to 20% in the US. The world was battered by oil shocks and labour unrest.
Richard Nixon was the only US President to resign. Investors will remember him for another reason. Next month marks the 50th anniversary of the end of the gold standard.
On Aug 15, 1971, Nixon closed the gold window. He ended the practice of pegging the US dollar to gold. Before that, the US dollar was fixed at a peg of US$35 per ounce to gold. Other currencies were traded at a fixed price to the US dollar. The US dollar became a free-floating currency, and was measured only by comparing it to other currencies.
