BillHolter.com

Bill interviews with Chris Marcus at Arcadia Economics (Also posted under Interviews)

Bill’s Commentary:

“What if?”

A World Priced In Gold

Pretend, for a moment, that it’s 1971 and you’re President Richard Nixon (admittedly disturbing fantasies, but bear with me). You face the perennial government income/outflow dilemmas, and other countries, noting your struggle, are trying to cash their dollars in for your limited pile of gold bars.

But this time around you don’t cave and “close the gold window,” ushering in the Age of Fiat Currencies. Instead, you cut spending and raise revenues however you have to. You balance your budget and convince your trading partners that the dollar remains “good as gold.”

Thanks to you, the US and by extension the world remains on the post-WW II Bretton Woods quasi gold standard. And what follows is very different.