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All over the country, there was one clash after another...
Small farmers fought banks and railroads... union workers battled their bosses and federal judges. On college campuses, students fought anyone with authority. Election rallies routinely ended in violence. Things were so bad, Lyndon Johnson decided not to run for re-election. Martin Luther King, Jr. and Robert Kennedy were assassinated. In 1968 alone, there were violent uprisings in more than 120 U.S. cities. A few miles from where my company is headquartered today, thousands of National Guard troops and 500 state police officers were brought in to quell the violence and looting. The government had borrowed extraordinary sums, and we were having a hard time repaying creditors. That’s because at the time, every dollar was required to be backed by $0.25 worth of gold. So the government couldn’t print unlimited amounts of money out of thin air. Also, foreign creditors who owned U.S. government bonds were allowed to collect repayments in gold bullion instead of dollars... so our gold reserves were quickly disappearing. Get this: Between 1958 to 1968, 52% of America’s gold reserves left the country in the form of repayments for our debts. The government was scared. It knew there was only one way out... another Debt Jubilee. At the same time, a major financial crisis was brewing...
First, we eliminated the 25% gold backing of every dollar.
Then, in 1971, President Nixon completely defaulted on our promise to pay gold for dollars to our foreign creditors. Once again, the government simply wiped the slate clean .
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