50 years and 21 million

A brief look into the history of the world’s greatest monetary experiment.

Intro

It has officially been 50 years since the Nixon shock — August 15, 1971, also a Sunday, when president Nixon went on national television to announce the historic change that the US dollar will no longer be pegged to gold.

Perhaps little people knew how tremendous of a decision that was in the time, and little people realized the vast consequences and second order effects such an action could have.

Regardless, it happened. And we’re here — 50 years later.

History

The rise of fiat currency did not start in 1971 — it was brewing for decades earlier, with the real catalyst being World War I. Fiat currencies, along with taxes, have a history of being linked with war.

Gold constricts what governments can do with money. If your money is pegged to gold, you cannot profit from seignorage — a useful tool in any government’s toolbox, especially when you’re going into war.

That’s right - the fiat currency system was mainly introduced to fund war.

This was evident by how most countries had immediately paused it when entering World War I. At the time, it was accepted that the…