LBJ back in '65 decided to send massive amounts of troops into Vietnam; to stop the spread of communism and halt the "Dominno
Theory"... the thinking being tnat one nation after another would fall to Communist rule. But how to pay for this? The decision was made to print funny-money. Globs and globs of it, 'cause the cause was JUST. So they printed, and printed. And nothing much happened.
But on August 9, 1971 Tricky Dick Nixon closed the "Gold Window." Prior to Aug. 9, dollar holders were able to swap their dollars for GOLD whenever they felt that the value of their dollars was declining in purchasing power.
They'd belly up to the Gold Window and say "Here's my dollars, I'd like the Gold." And they were accommodated.
But by Aug. 1971, with so much printing press money shoved into the economic stream, the general level of prices began to rise: so much so that the line in front of the Gold Window got Very Long. The government, aghast and not wanting to see all their gold diminish, slammed the window closed.
What were dollar holders to do? Here and abroad? Their was but one solution: buy gold and pre '65 silver: pre '65 silver was real silver; after '65 our government used alloys, copper and nickel to seep much silver for THEM. Neat. Gold was, if memory serves, roughly $120/ounce, silver $2 or $3/ounce.
Both gold and silver began to rise...slowly at first.
[I'll be back in a moment]
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