It was exactly forty years ago today that the 37th President removed the United States of America from the gold standard, unilaterally cancelling guaranteed convertibility of the US Dollar into gold. Though remembered today for the most part as the only President to have ever resigned from office - due to the Watergate scandal, history will likely revise Nixon's main claim to infamy to be leading the entire world to a regime of fiat currency! Under the Bretton Woods agreement nearing the end of WWII, major currencies worldwide agreed to be linked to the US Dollar, which in turn undertook to be always redeemable into gold. Following the unilateral repudiation of that agreement, however, no other world currency restored direct convertibility into gold - leaving the Dollar as the final backstop.
This never-before-seen-in-history global system of fiat currencies is the grand experiment of our era - like any other hare-brained scheme it is unlikely to end well. Removing the discipline of the precious -metal backing has allowed every successive government to print with gay abandon as much as it desires, leading to a severely inflated currency - now worth a mere fraction of its historical value. Forty years ago a Greenback was valued at 1/35th of an ounce of the yellow metal. At today's closing price it can now only buy 1/1,765th of an ounce. This means that today's Dollar has shrunk to less than 1/50th of its value in Gold a mere forty years ago - that is, the 2011 Buck is worth less than 2 cents of its 1971 pre-fiat uncle! At that rate it is far likelier to die of a heart attack than to reach old age.
It is worth remembering that every empire that ever was has crumbled once its currency began to be debased (see last article below). All that lies behind today's world currencies are mountains of debt - there is no yellow (or any precious) metal to be seen! It is also important to realize that this gigantic bubble must eventually burst, bringing with it both massive deflation and accompanying depression. It is time we remove heads from the sand and start preparing for this fast-approaching eventuality.
See relevant articles and video:
Gold Standard or Nixon Standard
August 15, 1971: President Nixon's Golden Error
Fiat Currency: Using the Past to See into the Future
Lew Rockwell: Death of the Dollar