Do you realize this is why we went off gold standard? When you make currency convertible to a commodity. The supply cant keep up w demand. It leads to liquidity crisis
No that was to provide camouflage cover. The real reason we went off the gold standard was to accommodate big government. The US population in 1971 was about 200M and about 300M in 2008 or a 50% increase in 40 years. Take a look at the chart below. Over that same time period 1971-2008 the US monetary base increased about
700% in 40 years. Even worse from 2008-2012 or just 4 years it increased 300%! Liquidity crisis my rear. We're absolutely swimming in dollars. You should really listen to the following Peter Schiff episode. He really nails it talking about average people living on about $50 per week in the 50's yet having a full family, feeding & clothing the kids, without the wife working, and typically without a high school diploma, but it's because in today's dollars a comparable person would need to earn $140K per year.
Nixon went off gold standard & left Bretton Woods because there wasn't enough gold reserves to back foreign debt. If foreign debt holders converted their bonds for US gold the USD would have crashed. In fact Switzerland & France started to do this and it began to put pressure on the USD
Peter Schiff is a gold peddler and doesn't know squat about economics. The problem we have now is not because there isn't enough USD. The problem is money stuck in the financial world because private sector is deleveraging their balance sheets.
you are exactly right, take a look at the article I posted right after his post. Great history lesson on creating the petrodollar