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Tax marriage penalty
- Thread starter MemeFan
- Start date
Not allegedly, that's how the system worked. The fact that a dollar was a token for real gold was the foundation of the whole system, it was why countries bought into it in the first place.
American peons were NOT allowed - despite the Constitution, and terms of what then (Common law) were called "notes" - to exchange fiat dollars for gold. Foreign sovereign/bank holders were allowed to redeem them for real gold until Nixon's treachery on August 15, 1971 (we're coming up on 50 years.)
Note that AmeriKans could trade in silver until LBJ's 1965 treachery; Gresham's Law did the rest.
Note that AmeriKans could trade in silver until LBJ's 1965 treachery; Gresham's Law did the rest.
PS> Here's a quick check to fill in the details:
Look up the legal definition of the word 'note' in Black's, or Bouvier's. See the specifics: It has a payer (or 'maker') , a payee (or 'bearer'), an amount (in real units, not necessarily "dollars", which are technically 'dimensionless' since 1965), a 'date payable' (which might be 'forever' - or until Nixon reneged), etc.
Addendum: A decent Civics textbook - back when it was taught, would do the trick as well. Note that the definition changed after the "UCC" replaced the common law, or 'choice of law'. It is also a 'negotiable instrument.' And: 'Money' ain't what it used to be, either.
A "silver certificate" or a "gold certificate" (redeemable in 'specie,' or lawful coin) is a real 'note'. A fiat buck, aka FRN, is note a real NOTE at all.
Look up the legal definition of the word 'note' in Black's, or Bouvier's. See the specifics: It has a payer (or 'maker') , a payee (or 'bearer'), an amount (in real units, not necessarily "dollars", which are technically 'dimensionless' since 1965), a 'date payable' (which might be 'forever' - or until Nixon reneged), etc.
Addendum: A decent Civics textbook - back when it was taught, would do the trick as well. Note that the definition changed after the "UCC" replaced the common law, or 'choice of law'. It is also a 'negotiable instrument.' And: 'Money' ain't what it used to be, either.
A "silver certificate" or a "gold certificate" (redeemable in 'specie,' or lawful coin) is a real 'note'. A fiat buck, aka FRN, is note a real NOTE at all.
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What was that behind the scenes understanding though?
I'm not sure what you mean. @Mark C has explained the situation succinctly here:
It's not a behind-the-scenes thing, that's just the way it worked. There were too many countries involved for the rules to not just be spelled out clearly. This was how the US dollar came to dominate the world - because it truly was worth holding, as it was as sound as gold. Until it wasn't.
When this whole system was negotiated everyone got into a room and wrote a document and then signed it.
While they were doing so they also negotiated the real deal and talked about how they would actually handle the whole situation behind the scenes. No one else has ever tried to settle accounts in physical gold before. I assume that was because of the wink wink nudge nudge part of the deal.
There was nothing back-room needed. At least this was probably least disruptive.
Keynes's Bancor would be more disruptive.
Before all countries were on gold standard, now just one. One not destroyed by war and who hasn't money printed itself into oblivion.
Futures trading on the PAPER gold and silver markets (LBMA, Crimex - apt name) is how it's done. Shangai exchange, and more exposure of the criminality, is a chink in the paper armor. ETFs just 'kicked the can down the road' a few more years.
Honest contracts enforce delivery, on demand. What happens instead is that some banksters and their Public-Private partners are above the law. They simply roll over the contracts, and know that they can sell 'naked' with no fear of actually being sent to jail for manipulation.
Honest contracts enforce delivery, on demand. What happens instead is that some banksters and their Public-Private partners are above the law. They simply roll over the contracts, and know that they can sell 'naked' with no fear of actually being sent to jail for manipulation.
What do you mean by that? People have been settling accounts in physical gold for all of time.
Do you mean that just within the Bretton Woods system, nobody had converted dollars to gold? It appears that multiple countries requested it, and at least Switzerland and France received actual physical gold (probably more but this sort of thing is often kept confidential). So you are mistaken if that was what you meant.
I think you've got an oversimplified cartoonish version of the history in your mind. It's also not weird that France would send a battleship to pick up the gold, if you've got a valuable cargo you want a well-armed transport to defend it from thieves, and it also makes sense to use your own ship (a government-owned one) rather than trusting your valuable cargo to private merchant ships. It is usually the role of the military to transport gold reserves.
Are you implying that the agreement always assumes that countries would be redeeming gold within the Breton Woods agreement? I find that unlikely. If so there would have been no need for the agreement. The whole point of the thing was to remove the need to transfer gold around the globe.
And France wasn’t sending a warship to lick up its gold. It was sending a warship to demand its gold. Even if your idea that they needed to protect it during transit (a cartoonish suggestion itself considering how much gold was shipped on unprotected transports even at the height of the war) you would think they would have called ahead and hammered out the details first.
It’s very hard to not read a threat, a ridiculous threat but a threat, in the use of a warship to deliver the request.
The point of Bretton Woods was the not-yet-fiat dollar (if you were a government) was "as good as gold," at $35 an ounce. You don't have to move the gold if you trust the paper.
And those who did found out the hard way, after Tricky Dick's perfidy, that they could not.
And those who did found out the hard way, after Tricky Dick's perfidy, that they could not.
Agreed. However, I also find it unlikely that nobody would ever have withdrawn gold from it before France did (and I'm right, since Switzerland at least is recorded as withdrawing gold). Remember that by Nixon's time, when withdrawals were halted, the official US gold reserves were half what they had been at their peak. Half. Which means vast amounts of gold were being withdrawn somewhere.
Put it another way. The reason we have bank accounts and instruments like cheques, bank cards, online payments etc, is all to make it easier to transfer money around the globe without having to send physical cash. However, the only reason we trust the bank is because, at any point, we know we could go there and withdraw our money as physical cash. And people do that all the time, in small quantities. If anyone goes to the bank, asks for their cash, and is turned down, that is a major scandal that results in a bank run and a crash. The vast majority of major financial transactions are done directly through the bank, yet it is all those little cash withdrawals that give people confidence in the system.
If nobody had managed to withdraw gold from the Bretton Woods system, it wouldn't have been worth the paper it was written on, and would have suffered a crisis of confidence and collapsed far sooner. As happened once physical withdrawals were halted.
I’m not going to do the research to find out the truth about gold withdrawals, but considering the system did what it was designed to do for 20 plus years, I’m going to assume not too many people were withdrawing gold.