The spike in 1970s oil prices was a direct reaction to the U.S. abandoning the gold standard. Oil-producing countries were no longer being paid in gold-backed dollars, so they raised prices from $3 to $40 per barrel to compensate for the currency's rapid loss of purchasing power.
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The U.S. economy's ability to consume more than it produces is not due to superior productivity but to the dollar's role as the world's reserve currency. This allows the U.S. to export paper currency and import real goods, a privilege that is now at risk as the world diversifies away from the dollar.
Executive Order 6102 forced citizens to surrender gold so the government could unilaterally reprice it from $20.67 to $35/ounce a year later. This instantly devalued every dollar in existence by 41%, a move necessitated by years of money printing to counterfeit their own currency.
The surge of women entering the workforce in the 1980s was an economic imperative, not just a cultural shift. The severe inflation of the 1970s, following the break from the gold standard, destroyed the purchasing power of a single salary, making a second income necessary for most families.
The ability to print money creates inflation that widens the wealth gap. This hyper-inequality triggers a deep-seated, evolutionary psychological response against unfairness, which then manifests as widespread social unrest and societal breakdown.
In 1933, President Roosevelt's administration confiscated citizens' gold at $20/ounce, then immediately devalued the dollar by repricing gold to $35/ounce. This accounting maneuver created a massive profit for the government, which was then used to fund New Deal stimulus programs.
Central banks evolved from gold warehouses that discovered they could issue more paper receipts (IOUs) than the gold they held, creating a fraudulent but profitable "fractional reserve." This practice was eventually co-opted by governments to fund their activities, not for economic stability.
Unlike in 1971 when the U.S. unilaterally left the gold standard, today's rally is driven by foreign central banks losing confidence in the U.S. dollar. They are actively divesting from dollars into gold, indicating a systemic shift in the global monetary order, not just a U.S. policy change.
The word "inflation" is a deliberately implanted euphemism that makes monetary debasement sound like positive growth. The reality is that money is depreciating and its purchasing power is being stolen. Reframing it as "monetary depreciation" reveals the true, negative nature of the process and shifts public perception from a necessary evil to outright theft.
The original definition of inflation is an expansion of the money supply. By shifting the definition to mean rising prices (a consequence), governments can deflect blame for inflation onto businesses, unions, or foreign events, rather than their own money-printing policies.
Alan Greenspan viewed a rising gold price as a market signal that monetary policy was too loose and interest rates were too low. Today's soaring gold price, viewed through this lens, suggests the Federal Reserve is making a significant policy error by considering rate cuts.