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The Soon Coming Judgment Of God Upon America and How To Escape It 305
US dollar. But foreign governments could reason as well as US citizens of the past and they
determined that gold was much more valuable than paper. Therefore, foreign governments began
redeeming US gold and depleting gold reserves at the same time foreign obligations were
growing. “Before 1950 the U.S. gold stock was comfortably larger than the amounts owed to all
international lending institutions, private foreigners and governments combined” but by 1960
foreign liabilities exceeded gold stocks at the official price of $35 an ounce. This was not due to
a shortage of gold but the fed's dramatic increase in the money supply. By 1973 foreign liabilities
were 9 times gold reserves; “external liabilities totaled more or less $100 billion and the gold
stock was worth a mere $11 billion”.
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As a result of the foreign liabilities, which exceeded US
gold reserves by over 900%, on August 15, 1971 President Nixon suspended the right of foreign
governments to convert their dollars into gold. On the part of the US this was a technical
admission of bankruptcy.
1225
The price of gold was kept artificially low until 1971 when Nixon suspended the right of
foreign governments to redeem their American dollars for gold. But gold, as a scare resource,
would have naturally escalated in price with the dramatic increase in the money supply had it's
value been permitted to naturally fluxuate with market conditions. When gold began to be once
again traded on the open market it soured in value. By 1974 it reached $180 an ounce and by
1980 it had reached $800 an ounce. This was not only speculation but fear over the future of the
dollar. If the dollar where to collapse in value, gold would hold its value. Gold prices later
stabilized and have moved with market conditions somewhere between the approximate range of
$250 and $400 an ounce since 1981.
Even at the artificially low price, US gold stocks were more than sufficient to cover US
foreign obligations through the 1950’s. By the end of the 1960’s overseas liabilities were 4 to 5
times greater than gold stocks. This was due to the Fed's dramatic increase in the money supply.
In 1961 the US along with seven other western European nations formed a Gold Pool as a means
of keeping the price of gold artificially low. The pool quickly lost over 28,000 ounces of gold
valued at $991 million.
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Any beginning economics student could tell you that this was a plan
doomed to failure. Therefore, one might rightly assume that this was a carefully executed plan to
deplete the US of its gold reserves.
Between November 1967 and March 1968 the US gold stocks were depleted by a
staggering amount, over 91.5 million ounces, $3.2 billion at $35 an ounce (the true market value
was closer to $16.5 billion or $180 an ounce). On one day in March of 1968 the US sold over
400 tons (12.8 million ounces) of gold to private buyers. At the real market value of
approximately $180 per ounce, this amounted to a $1.8 billion gift to those private buyers. My
guess is that these private buyers had connections with the Federal Reserve. The gold pool ended
after the US lost 20% of in remaining gold stocks in one five month period.
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The result of this is the US is essentially bankrupt and it could have all been avoided if
gold prices would have been left to the market. Under normal market conditions the price of gold
would have reached its true value and the US would not have had a foreign credit problem and
our gold stocks would not have been depleted.
The drastic change in US international monetary policy was the principal result of the oil
crisis of the early 1970’s. The Middle East oil producers didn’t want to sell their valuable oil in
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