In 1971, then President Nixon, suspended convertibility of the US Dollar to gold, thus putting an end to any backing of the US Dollar. In 1970 the USA had a trade surplus with the world of approximately two and quarter billion dollars and Gold was priced at $35/oz. By eliminating any backing, the value of the dollar was totally in the control of the privately owned Federal Reserve banking system. No longer bound by a commodity the government was now free to fund any and all operations by just having the Federal Reserve print money. Yet one must see the moral issue in creating something from thin air that is perceived to have value and then using this instrument to acquire things that have actual value. This is the basis of fraud and is why counterfeiting currency is illegal (Except for the private Federal Reserve) On top of having the Federal Reserve create the money the government would pay them interest on the money they created. With the newly created money government could fund all the projects and wars it had desired to do but previously could not afford. National debt has risen from $390 billion in 1970 to over $9 trillion now (not including unfunded obligations). In 1972 Henry Kissinger and Nixon opened trade with China, who was more than willing to accept US dollars with which it could buy oil which was priced exclusively in US Dollars. 1972 Wal-Mart is listed on the NYSE.
Throughout the 80s government would test the ability to print money, increase debt and export dollars around the world. With the amazing logistics of Sam-Walton and Wal-Mart the Americans were mostly able to avoid the high cost of inflation by exporting these created dollars to China. An indication of how much the dollar has actually depreciated is the current $736 price of Gold. Yet America has not reflected this type of inflation due to the exporting of the excess printed dollars.
Trade deficits reflect the amount of goods and services we have imported versus the amount of goods and services we have exported. Trade deficits have consistently risen from 1971 on with 2006 being $758 billion. So Americans get goods at very cheap prices in exchange for printed dollars that were created out of thin air. This sounds great right?
The result of the dishonest money has Blowback. If we can print money and get goods that we want. Why trade goods for what we want? And since we no longer need to work to create goods, and we can just export dollars then why not have China, who is a willing partner, do all the work? To an amazing degree, this is what has happened over time. Thus converting America from a self reliant nation with a strong manufacturing base to a predominantly service based nation. The blowback from the dishonest money that seemed so great is the loss of manufacturing capability and jobs in America. As well as massive dependency on foreign nations.
Exporting of USA jobs is NOT the result of free trade but is directly the result of dishonest money. As a citzen of the United States I will do everything in my power to reinstate honest money and do away with the Federal Reserve System. Thereby immediately reestablishing trade balance and giving the American people the ability to compete in a global economy without jeopardizing American Sovereignty via WTO, NAFTA, CAFTA and the NAU “managed trade” deals.