Peter Schiff

And, you know, for a long time, you know, until 1913 when we got the Federal Reserve, we were pretty much just using gold and silver as money.

And even when the Federal Reserve was created, all the Federal Reserve notes were redeemable in lawful money and gold.

And gold was money up until 1971.

And even though Americans couldn't redeem their Federal Reserve notes, which we call dollars, they couldn't redeem them for gold.

Foreign governments could.

And foreign governments held a lot of gold as dollars as a reserve.

But they did that because they knew that those dollars were not only backed by gold, but convertible on demand into gold.

And so we were on a gold standard even through the dollar up until 1971.

But once we defaulted and the U.S.

government reneged on its commitments to pay gold for its notes, that's when the real inflation started.

That's when we really started printing a lot of money.

And that's why you had the big price increases of the 1970s.

And it wasn't...

arabs that were just you know uh jacking up their oil prices because oil went from three dollars a barrel to forty dollars a barrel but it wasn't that oil was getting more expensive it's just that we used to pay for our oil with gold and we started paying for it with paper but all that money we printed it you know in the 60s you know for the war on poverty the great society the vietnam war we ran these big deficits which

were small by today's standards, but they were big back then.

And they were financed with inflation.

And we saw the consequences in the 1970s.

And we may have had a real dollar crisis because the dollar lost about two-thirds of its value during that decade against other currencies like the Swiss franc, the euro, the Japanese yen.

But when Reagan came in and we had Volcker in 1980 and interest rates went up to 20%,

And we really had some substantial reforms in our tax system.