Historically currencies have been 100 % backed by Gold. The Gold Standard Act formed in 1900, established gold as the sole basis for redeeming paper currency. It was not until 1944 under the Bretton Woods agreement Under the Bretton Woods System, the U.S dollar was pegged to gold and other currencies were pegged to the U.S. dollar’s value. Then in 1971 the world realised America was printing money and did not have the gold reserves they were suppose to have backing the U.S dollar and they defaulted. This is when they did a deal with the Saudis and the petro dollar became the standard and not gold. Countries could not buy oil unless it was in USD payments. The world was hamstrung and still required USD.
I believe we will head back to a gold standard in one way shape or form.
SAR Price at posting:
$3.28 Sentiment: Buy Disclosure: Held
