Here is a very interesting research paper from the Bank of Japan which discusses how the US got off the bi-metallic system and evolved into a purely fiat-money system. The real culprit according to the author is not FDR or Nixon, but the US Supreme Court which failed to properly distinguish between fiscal and monetary policy when deciding the constitutionality of Greenbacks (notes issued by the government to finance the Civil war) and Legal Tender Laws in the 1860's. The Court affirmed the legality based on an incorrect interpretation of the Constitution which allows Congress to borrow money. The Court argued that issuing fiat currency was within the government's power to borrow. These important decisions were vital to destroying America's metallic based monetary system and the purchasing power of the dollar. The author concludes that "that monetary arrangements in the U.S. have departed sharply from those specified by the Constitution, and that the change has been based in crucial ways on invalid reasoning."
Here is an excerpt from the article:
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Here is an excerpt from the article:
