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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: bart13 who wrote (71618)	10/12/2006 1:57:45 AM
From: JF Quinnelly	Read Replies (2) \| Respond to of 110194

Revaluing gold permitted the Treasury to issue 75% more dollars against its gold stock. Foreign banks could still redeem gold until the late '60s when the effects of the Triffen Dilemma put the dollar into a vice. Being the world's reserve currency resulted in the accumulation of more dollars overseas than there was gold to redeem them. Money supply increases to finance federal deficit spending helped create the problem. Had the federal government raised taxes or reduced spending, instead of increasing the money supply, it would not have been necessary to break the link to gold in 1973. The dollar wouldn't have been eroded by inflation as it has been.