Few people today know that when the Federal Reserve was forged a little over 100 years ago, the central bank had many important restrictions that kept it in check from becoming the debt and inflation creating behemoth it is today. One thing in particular that the private bank was restricted from doing was in purchasing sovereign bonds such as the U.S. Treasury.
But with the advent of a World War rushing towards American shores in 1916-17, the same politicians who voted in the Fed suddenly saw an opportunity to increase their coffers and passed new legislation which allowed the central bank to buy U.S. debt, and this began the cycle which would eventually see the dollar lose over 98% of its purchasing power a century later.
Fast forward to 1964...
The powers that be running the U.S. government following World War II (ie... the Military Industrial Complex) desperately wanted a new war after the Korean quagmire so they chose Vietnam as their next area of aggression. But to do so would require massive amounts of money the government didn't have, so they coaxed the Fed to begin buying more debt to fund the campaign.
This of course led to a devaluation of the currency which culminated in our exporting inflation to other countries since the dollar was the global reserve currency, and those nations were forced to buy and use the dollar in international trade. As a result, nations like France said ENOUGH, and began to demand gold for their dollars, which in turn led to a monetary crisis in which President Nixon was forced to remove gold from out money supply to stave off insolvency.
In the end, gold was never the cause for recessions, depressions, or stagnating economic growth, but rather it was the corrupt nature of men who demanded more than was necessary to run the government who destroyed the value of the dollar for consumers and producers alike.
Which brings us to an interesting dichotomy in the 2016 Presidential election cycle. Of the remaining three primary candidates vying for the White House, one is a bought and paid for shill of the banks and the debt based system, one has a basic understanding of the corporatism that has taken over the government, but his solution is simply to create more debt, and the last one has a vast understanding of debt probably more than any candidate in recent history, and that candidate understands money better than all of them.
And that individual is also being recognized by the World Gold Council as being good for gold and the future of gold prices.
Donald Trump is great for gold.
Or, at least, the possibility of his winning the presidential election in November is, according to Greg Collett, the World Gold Council's director of investment products.
The council sponsors the SPDR Gold Trust, the largest exchange-traded fund in the world that is backed by gold.
The possibility that the presumptive Republican nominee will win the general election could heighten the type of concern that drives investors to invest in the metal as a haven.
"He's very unclear in his policies, and uncertainty tends to make people say, 'Maybe I should have something a little bit in gold,'" Collett told Business Insider on Wednesday.
If he's elected, this time next year, what does the country look like? Who knows? Who knows if companies can do business with China or Mexico, [or] if we're like rounding up people and deporting them, who knows?
That sort of weighs on people's investments, except for gold. It helps gold.
Trump has come out in support of the gold standard, which effectively pegs the value of currency to gold. - Business Insider