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From Gold to Fiat to $100K Bitcoin | What Happened In 1971? | Beyond Bitcoin · Simply Bitcoin

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  There's a moment in history that almost nobody outside of the
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  Bitcoin community talks about, and yet it explains why we're
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  drowning in debt, why your paycheck buys you less and less
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  every year, and why Bitcoin even exists in the 1st place.
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  President Nixon in 71 August 15th, 1971 took the dollar off
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  the gold standard so we could print more money so we could
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  steal your wealth. And the reason that he decoupled
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  gold from currency was to pay for the Vietnam War.
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  For most of modern history, every U.S. dollar was backed by
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  real gold. The paper in your pocket wasn't
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  money itself. It was a claim check, a receipt
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  for something tangible in a vault.
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  The gold. That promise kept governments
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  honest. They couldn't just print more
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  money whenever they wanted less. They drive up prices and
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  inflation. But on August 15th, 1971,
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  President Richard Nixon ended that promise with one
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  announcement on live television. The dollar was cut loose from
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  gold forever. Overnight, the US dollar became
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  nothing but paper, backed by political will and the printing
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  press. This is what was referred to as
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  the Nixon Shock. That moment, the Nixon Shock set
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  up a chain reaction of events, inflation, inequality and
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  endless debt. And 50 years later, it's the
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  reason a new form of money was born.
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  Bitcoin money with rules, not rulers.
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  I'm oceans. This is beyond Bitcoin.
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  I have a new microphone. Let's go.
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  Gold and silver emerged as the most durable.
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  Most convenient? Most.
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  Satisfactory money for greater convenience men started.
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  Stamping out gold. And silver coins with values
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  imprinted on them. We can't talk about the Nixon
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  shock without understanding what the gold standard was first.
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  What was the gold standard? Isn't that like the highest SAT
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  score or something? The gold standard meant that the
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  US dollar could be redeemed for gold at a fixed price, $35.00 an
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  ounce, $35.00 an ounce for gold. Wow.
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  So the dollar in this relationship wasn't just value
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  that could be printed infinitely as it is today?
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  It actually meant something. It was tied to the value of the
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  time, which was gold. It was a representation.
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  And this tethered these dollar receipts to something finite.
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  Why? Well, I don't know if you've
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  done any gold smelting recently, but it's quite a process to
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  extract raw ore from the earth and refine it into a clean,
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  beautiful brick of gold. This process requires a lot of
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  work. Why does it matter that our
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  money requires work to make? Well, if it doesn't require work
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  to make the money, then you can just make the money out of
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  nothing, and then you could just make a bunch of it forever.
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  Maybe that's why the manufacturing of money should
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  require work for gold. You could always find more of it
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  and refine more of it, but it takes an enormous amount of
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  effort to do so for dollars, just a couple clicks of the
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  keyboard. So this attribute of a money
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  that requires work kept governments in check means that
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  they couldn't print it. They had to tie it to something.
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  The receipt was backed by something.
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  It meant something, but by the late 1960's, the US was already
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  bleeding gold. Are we based on gold or not?
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  No, we haven't been on gold for many years.
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  We have. It was a 1973 or 71 was it?
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  Nixon suspended the gold standard and we've never been
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  back on it since then. So our currency was actually
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  backed by an actual yes, the gold.
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  The idea was that you could for every dollar you printed, you
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  had to put away a certain amount of gold.
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  So what I was talking about before, after World War 2,
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  Europe is destroyed, America is still left stable.
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  This is when America, they created what was known as the
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  Bretton Wood Agreement. So essentially America was like
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  the dominant power in the world. We had the huge portion of the
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  world's gold at this point. And so the deal that we came up
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  with was essentially that other other countries would peg their
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  currency to the dollar and we would peg the dollar to gold.
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  So you were kind of on a dollar stand, you were kind of on a
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  gold standard if you went a dollar standard, got it.
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  And we set the price at $35.00 an ounce.
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  So for every $35 we printed, we had to put away an ounce of
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  gold. OK.
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  So then a four Knox, Yeah, I think that's where it was
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  supposed to be caught. Also has not been audited, but I
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  think that's where it was. Empty, I'm sure.
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  Yeah, who that it's, I think long gone.
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  As you can imagine, Vietnam War spending plus Great Society
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  programs equals deficits. Foreign countries started
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  demanding their gold back for dollars.
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  France even sent multiple naval vessels to New York to collect.
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  And this, of course, led to a big problem because they had
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  more money on the books than they had the reserves to fulfill
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  those, you know, promises. Yeah, so, so the issue is if
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  gold is money and it goes into a bank, the bankers issue 10X
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  more, more paper than there is gold.
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  You have inflation eventually, right when the French tried to
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  redeem their their paper dollars for gold, the US basically
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  closed the goal window. We defaulted on on that
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  obligation and we started a cycle of inflation from 1971 on
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  that's been running 50 years now.
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  When FTX failed, it was no different.
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  The issue is people put Bitcoin on FTX and then Sam turned
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  around and issued 3X as much paper, you know, obligations.
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  And when people try to withdraw the Bitcoin, he doesn't have it.
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  He fails the. United States did not have
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  enough to cover their redemptions for gold.
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  So, stuck between a rock and a hard place, Nixon quietly
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  announced on a Sunday night, August 15th, 1971, that gold
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  would no longer be redeemable for dollars.
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  Temporarily, of course. Temporarily.
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  The strength of a nation's currency is based on the
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  strength of that nation's economy, and the American
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  economy is by far the strongest in the world.
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  Accordingly, I have directed the Secretary of the Treasury to
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  take the action necessary to defend the dollar against the
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  speculators. I have directed Secretary Conley
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  to suspend temporarily the convertibility of the dollar in
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  the gold or other reserve assets except in amounts and conditions
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  determined to be in the interest of monetary stability and in the
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  best interest of the United States.
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  He didn't outlaw the gold as FDR had done in 1933 with the
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  Executive Order 61 O2. He did something entirely
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  different, maybe even worse. Overnight, Nixon changed the
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  concept of the dollar entirely, and he did it under the guise
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  that it's a temporary measure, that this thing will always go
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  back to the way it was. But it never did.
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  And it absolutely changed the way we think of what money is
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  Medium of exchange, unit of account, fungibility.
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  Money has all those properties, and gold seemed to satisfy that
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  for the market for the longest time.
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  But what Nixon did was absolutely change this idea
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  because he said that the thing you're transacting with every
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  day, which is actually the US dollar, no one's transacting in
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  gold every day. They're transacting this U.S.
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  dollar. The dollar represents it is the
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  value of the gold. It represents the gold you're
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  transacting in this receipts because at some point you can
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  take that receipt and redeem it for the true value.
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  But what Nixon did was he severed that connection.
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  He severed the relationship between gold and the dollar.
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  So now the dollar is this currency that is just floating
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  around since 1971. It just the value is comes from
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  who knows where the value comes from, the Fed, I guess.
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  So it's at this point that Nixon is basically destroying the
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  agreement of Bretton Woods. And what's Bretton Woods?
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  It's the unified agreement that all currencies around the world
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  will be backed by the US dollar. Why were they all in agreement
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  to be backed by the US dollar? Because the US dollar was backed
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  by gold and the US was known to have all the gold.
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  It all sort of stemmed down like a trickle down pyramid scheme if
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  you will. Currencies around the world
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  floated freely as they do today, but pretty much all currencies
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  are going through inflation right now.
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  The US dollar became Fiat that night, and for the first time,
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  governments could inflate without restraint.
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  After 1971, the dollar lost its anchor, like a balloon being let
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  go at a birthday party. Nixon just And like water, the
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  money seeped into everything. Your rent, your groceries, your
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  car payments. I watched in awe, realizing that
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  money, as we understood it, was ending.
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  What a crisis. I expected the stock market to
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  plunge the next day, so I got on the exchange floor early to
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  prepare. When the opening bell rang,
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  Pandemonium broke out, but not the kind I expected.
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  The market was up, way up, and went on to rise nearly 25%.
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  That surprised me because I never experienced a currency
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  devaluation before. When I dug into history, I
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  discovered that the exact same thing happened in 1933 and had
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  the exact same effect then. Paper dollars were also linked
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  to gold, which the US was running out of because it was
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  spending more paper money checks then it had gold to exchange for
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  them. In both cases, breaking the link
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  to gold allowed the US to continue spending more than it
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  earned simply by printing more paper dollars.
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  Since there was an increase in the number of dollars without an
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  increase in the country's wealth, the value of each dollar
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  fell. As these new dollars entered the
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  market without a corresponding increase in productivity, they
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  went to buy lots of stocks, gold and commodities and hence 'cause
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  their prices to rise. The result?
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  Inflation, rising inequality, wages that don't keep up with
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  costs, and a national debt spiraling into the trillions
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  today. Thanks, Tom.
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  Now, let me just pause here and talk about the severing of
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  connection between the dollar and gold and how it's similar,
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  how you don't want your connection to be severed in
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  times of crisissat123.com. The Nixon shock isn't just some
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  milestone in history. It's the event that led to the
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  whacking out of all kinds of metrics from worker pay versus
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  productivity to the price of a can of tomato soup, a rise in
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  crime, falling birth rates, and sadly, many of the things that
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  we're experiencing today. Many of these metrics are
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  illustrated in a great website right below here.
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  I'll just put it down here. WTF happened in 1970, one.com?
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  One of those ripples is the creation of a fixed supply
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  digital currency. Yes, I'm talking about Bitcoin.
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  This channel is called simply Bitcoin.
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  Why wouldn't I be talking about Bitcoin now?
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  It took a little time, but Bitcoin is a direct answer to
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  Nixon's 1971 policy. Satoshi Nakamoto launched it in
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  2009 in the middle of another crisis of money printing, the
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  global financial crisis, which I'm sure a few of you have heard
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  of out there. What's the global?
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  Financial crisis. Unless you're all zooming
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  around, if you could imagine, the US money system is a dam
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  holding up all that value. 1971 was like the crack.
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  As the crack goes, it just keeps spilling out everywhere, just
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  exploding. And then the town below gets all
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  flooded and everyone's crying and that they have no place to
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  live. And if you've ever wondered why
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  Bitcoin feels so necessary at a time like this, it's because the
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  foundations of our money broke that night back in 1971, and
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  we've been living in the aftershock ever since.
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  It may feel like a long time, but it's actually on the scale
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  of human existence. It's actually very small amount
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  of time like that. Bitcoin is this it's this
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  incredible thing because it's invisible.
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  People really don't understand what it means for something to
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  go up 100 million X in 16 years. It means like, you know, I think
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  I've said this before on other, but it's like, you know, future
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  historians will have to tell children that Bitcoin did not
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  arise overnight. Like it wasn't just like a step
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  function that just went up. It was actually like lots of
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  setbacks and something else. But on, on like a historical
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  time scale, it's just like as soon as Bitcoin appeared, the
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  dollar collapsed. That's like what future
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  historians will say. That's that's why we that's why
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  we built this extension to help people internalize this as
• 13:08
  they're going to the Internet. It's like you should be pricing
• 13:10
  things in Bitcoin and observing how they're changing over.
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  Time and observing how they're changing exactly.
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  That's why your your, your, your, your, your hat says SAT
• 13:19
  right. The SAT sat right.
• 13:20
  So yeah, like it's it's something where as soon as
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  Bitcoin appeared on the scene, the hardest money around started
• 13:27
  attracting the smartest money around, right.
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  Smart money has been going into Bitcoin for 16 years in larger
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  and larger and larger quantities, and it's still, you
• 13:36
  know, it's still going to go. So if you combine the Internet
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  disrupting blue America with China disrupting red America
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  with the loss of reserve currency and Bitcoin going to
• 13:44
  the moon, you have a situation where, man, the blue Americans
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  will be really mad. They'll be really mad because
• 13:52
  they'll say, and I actually don't love this framing, but
• 13:55
  I'll just say it. They'll say it AI took all the
• 13:58
  jobs and Bitcoin took all the money and the tech guys should
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  this junkie junkie system. Thank you guys so much for
• 14:37
  watching this video. If you like what you see and you
• 14:39
  want to see more as my hair grows longer and longer because
• 14:43
  I'm going to try and grow it out, then you can hit that like
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  We're coming out with it every single day of the week.
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  Also, don't forget to hit that notification bell.
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  Emotions is beyond Bitcoin. Until next time guys.