The Gold Standard was suspended in WW1 (1914-1918) so that countries could print money for war, causing inflation. After a shaky return in the 1920s, the Great Depression hit in 1929. Britain ditched gold in 1931, and the U.S. followed in 1933, with FDR banning private gold hoarding and setting a fixed price of $35 per ounce. This was the "Gold Exchange Standard"—currencies pegged to the dollar, which was pegged to gold. Post-World War II, the 1944 Bretton Woods Agreement cemented this globally. The U.S., holding most of the world’s gold (thanks to wartime inflows), became the system’s anchor. It worked until the 1960s, when Vietnam War spending and dollar outflows strained U.S. reserves. Foreign nations, like France, demanded gold for their dollars, shrinking Fort Knox’s stash.
Gold has historically reigned as the preeminent store of value and king of all currencies. From ancient Rome to modern central banks, authority figures have always held gold to secure their power.
For virtually all of history, all global currencies were backed by precious metals such as gold and silver, which commanded more trust than any government. This was called the Gold Standard, and it governed economies for millennia with great success. But that changed recently.
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The Death of Sound Currency
On August 15, 1971, Nixon "closed the gold window," ending dollar convertibility. The Gold Standard was dead, and currencies floated freely, tied to nothing but trust. Since then, gold’s financial role has shifted. In 1974, the U.S. legalized private gold ownership again, and prices soared—hitting $850 an ounce by 1980 amid inflation fears. It became an investor’s hedge, not a currency anchor. Central banks still hold it—about 35,000 tons globally today—as a backstop, but they don’t dictate its price. The market does. Breakthroughs in green tech and quantum computing spike demand for gold in circuitry, while traditional uses in jewelry boom in thriving economies like India and Southeast Asia. Supply, meanwhile, tightens—major mines deplete, and new deposits prove harder to tap. Mining production is consistently outpaced by demand from jewelry, tech, and investors. Exchange-traded funds (ETFs) like GLD, launched in 2004, let more people than ever bet on gold without owning physical bars.
The Future of Gold is Bright
Its financial history shows it is an asset that has weathered debasement, wars, and fiat money’s rise, and always bounces back as a symbol of value when trust in paper declines. The price of gold could soar to unprecedented heights in a new world where ongoing geopolitical tensions, trade wars, and resource disputes—erode faith in fiat currencies. Gold becomes not just a hedge but a star asset, its luster brighter than ever in a world craving stability and innovation.
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