the secret return to a 'gold standard', page-2

Socrates,

Many people have critised Nixon for taking the US off the gold standard in 1971 assuming that he had a choice.

He didn't.

In 1970-71, a number of European governments (the French in particular) were buying up dollars and converting them to gold, effectively drawing on the US gold reserves. (Have you ever wondered why American - particularly Republicans - hate the French?)

What policy option did Nixon have? If he had stayed on the gold standard, all the gold reserves would have been converted, leaving the US government without gold and forced to default the conversion promise.

Restoring the US to the gold standard involves fixing the price of gold in US dollars. The only guaranteed way of doing that (though I am open to suggestions) is restoring convertability. That would require the US government to either buy a great deal of gold, or devalue the US dollar.
1. They don't have the money to buy the gold; and
2. Massive dollar devaluation would trigger chaos in world markets.

There is not way a US government would risk either.

(What I really want to know is where is William Patalon III is getting the cheap hooch?)