On Sunday evening, August 15, 1971, President Nixon told the American people the U.S. would “suspend temporarily the convertibility of the dollar into gold or other reserve assets” as a means of defending the dollar against “the speculators.” This was one part of his New Economic Policy, a phrase borrowed from communist Vladimir Lenin, which included a 90-day freeze on prices and wages, and a 10 percent tax on imports. Barron’s editor Robert Bleiberg, in a 1974 speech at Hillsdale College, thought the price-wage freeze was perhaps a ploy to distract attention from the “unthinkable” act of severing the dollar’s last connection to gold.
The voters knew nothing about gold and most economists, with their Keynesian pedigree, approved of Nixon’s action. It wasn’t a high-risk move on Nixon’s part.
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