The History of Gold
At some point of his life, Mark Twain said that history does not repeat, it rhymes. For a person who studies financial markets, the history of gold gives us a prism through which one can get a more thorough understanding of the contemporary economy. It also shows the groundwork for the investor who is wishing to make an educated guess how the past might easily rhyme with the future.
The most important events in the present history of gold are the Gold Standard Act of 1900, by which the United States united most of Europe in a gold-based economic system; the Federal Reserve Act of 1913, by which the United States entered upon the long road to severing the dollar’s link to gold; Franklin Delano Roosvelt’s devaluation of the dollar in the 1930’s and the subsequent confiscation of gold; the Bretton Woods Agreement which was signed after World War II, which proportioned the dollar to gold and the rest of the world’s currencies to the dollar; and last but not least, the abandonment of the Bretton Woods Agreement and the dollar’s further devaluation during Richard Nixon’s term of presidency in the early 1970’s.
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