Good try! The agreement was that US Treasury would either buy or sell gold for $35 oz. to other central banks. In other words, foreign central banks could exchange their dollars for gold. Then Nixon, under the advice of the Treasury secretary, temporarily in his words, “closed the gold window”. The foreign central banks were stuck with them. “It’s our currency, but it’s your problem.” Nice, huh?
Gold clause payments in long term lease contracts were made illegal in 1933, the contracts specifically mentioned payments made in gold for exactly the reasons mentioned.
When do you think agreements that are currently active were made? As I pointed out in my previous post, “the debt” is not a single transaction. Anyone who borrowed money prior to 1971 has long since been repaid. Anyone who the American government currently owes money to loaned that money to the American government after 1971. Which means everyone was told they were going to get repaid in dollars not gold.
Maybe I have an agreement that my uncle can borrow my car on the weekends. I might suddenly change that agreement and tell my uncle to go fuck himself.
But that does not mean I’ve defaulted on the loan I took out on the car. These are two separate agreements.
The US government might very well have violated its treaty obligations when Nixon closed the gold window. But this would have been, quite specifically, a violation of the Bretton Woods Agreement. It was not a violation of any US bond contracts. US bonds were promised to pay in dollars. They were paid in dollars, exactly as the contract stipulated. There was no stipulation of anything else. There was no default on those bond contracts in 1971. One agreement is not the same as the other agreement. If you believe that there was a specific clause in government bond contracts that the US government violated, you are free to cite those contracts.
I don’t believe you will be able to do this.
No one here believes that you will be able to do this. Your arguments do not seem, at the present, especially well considered.
Nope, you are completely and utterly wrong here. When do I think they were made? Long term leases are commonly 99 years, and they have the option of being renewed. The gold clause in the contracts was designed for exactly the reasons mentioned - so that the owners of the lease are not losing out to the effects of inflation.
See: Trostel vs. American Casualty and Life
On June 27, 1917 John Trostel entered into a lease agreement with Morris and Jacob Joseph for commercial property in Des Moines, Iowa.1 The second paragraph of the lease set the amount of annual rent at $12,000 for the first five years of the lease, $15,000 for the next 49 years, and $18,000 for the remaining 45 years. It also provided that “at the option of the lessor, all payments under this lease shall be made in gold coin of the United States of America, of or equal to the present standard of weight and fineness.” In a separate paragraph, ninety days written notice was required as a condition precedent to the right of the lessor to demand payment in gold. Prior to the Depression era, gold clauses such as this were often included in long term rental agreements as a sort of price-indexing mechanism to protect a lessor from the effects of inflation. See Fay Corp. v. BAT Holdings I, Inc., 646 F.Supp. 946, 947 (W.D.Wash.1986), aff’d sub nom. Fay Corp. v. Frederick & Nelson Seattle, Inc., 896 F.2d 1227 (9th Cir.1990).
Because of the nature of monetary inflation over a hundred years, they were getting a sweet heart deal - a 12 story commercial building and property for $18,000 a year. This is exactly why contracts were made in terms of good, to prevent bullshit like this. If you were the owner of the property you’d exercise the terms of the contract.
Unless you’re going to argue you’d rather have $18,000 over $1,250,000? What say you?
That’s because you’re conveniently ignoring the fact that FDR defaulted on a domestic basis 40 years prior to closing the gold window for central banks.
Gold bonds specifically. This is a matter of historical record, I’m not going to do your homework for you.
Maybe you’re having memory problems, but I’m responding to your post. Your first post in this thread, #29, specifies 1971. It does not specify FDR and the 1930s. Your post #32 is also about Nixon. Your post #34 says “Nixon did his thing unilaterally and in secret.”, when in fact there was a national announcement to the public. (You seem to have a highly nonstandard definition of “secret” that somehow includes public broadcasts to the world.) This third post in the thread is the first post in which you bring up FDR.
But most importantly, the specific post that I responded to was #41, which was (again) about Nixon closing the gold window and not about FDR. My criticism of you (again) specified 1971 and not the 1930s.
If you want to focus the discussion on FDR, you should not bring up Richard Nixon as if it supports your points. By bringing up an example that is irrelevant to what you want to talk about, you give the strong impression that you don’t fully understand this issue.
Maybe you’re not familiar with the current message board you’re posting in. This is the Straight Dope. Welcome back.
If you have a claim you want to make, then you are personally responsible for bringing evidence in favor of that claim. If you do not want to cite facts for these boards, then you might be happier at a different place. 4chan might be a better fit for you, or perhaps the YouTube comments section.
But if you make a claim here, you need to be able to defend that claim. Your problem right now is that citing the “public record” from the 1930s is not going to cut it, when I’m criticizing your particular comments about the 1970s. Maybe you’re right about FDR – I’ll leave that to other posters – but I’m not criticizing your comments about FDR. You offered up some nonsense about the 1970s. It was wrong, as I pointed out. Now you’re trying to retreat to the 30s. I’m not going to follow you there.
If you want to maintain a bit of credibility here, your best bet would be to retract your comments about the collapse of Bretton Woods being a default on the US debt. It wasn’t. It might make your 1930s argument more powerful, if you are able to recognize your 1970s argument falls flat on its face.
But gold is valuable because it is rare. (And conveniently, does not rust away, so is reliably warehouse-able). No matter how much a country would want to, it cannot “print” more gold. The total supply, and capacity of increasing that supply, are well documented. (Similarly, oil where found makes some entities rich because of its rarity, and the demand for it…)
Dollars - well, if hypothetically the economy were to crash the government could create trillions of new dollars, pump them into the system, and they would be indistinguishable from existing dollars. The government could also print whatever it needed to pay all outstanding bonds, should it not care about the consequences. If the government put $1-million in everyone’s pocket, odds are prices would skyrocket for most items - inflation.
I take it then your contention is therefore that FDR or Treasury didn’t renege on gold bond payments?
Or repudiate gold clause contracts? (Never mind the criminalizing an element on the periodic table for the moment) Because that’s what happened. Again it’s a matter of historical record. Look it up if you don’t believe me.
Without playing the bait and switch game and getting off in the weeds, the point here is that Presidents have a very wide latitude in affecting financial policy (obviously); I don’t think anyone is going to argue otherwise.
I argue otherwise. It isn’t even clear that the issues you raise have anything at all to do with borrowing on the credit if the United States, an Art I sec 8 power of Congress, which then has 14th Amendment implications.
Contractual relationships - like the US fulfilling an agreement to pay someone for some service, good, or exchange - are not the same as borrowing by the USG.
I point out that I asked for cites for your assertions and you didn’t see the need to do so.
LOL!!! Looks like it works pretty good to me, it’s obvious you don’t want to answer a simple question. And then hide behind pseudo-intellectual twaddle.
Did the US government renege on gold bond payments or not? Of course you know the answer. Someone might argue that this was necessary, that isn’t the point. The OP wants to know whether the president can unilaterally do these kinds of things. It’s pretty clear the answer is “Yes.”; two presidents suspended gold convertability of the currency both domestically and internationally, forbade gold clause contracts and outlawed the posession of gold in monetary quantities etc etc. Again, it can be argued that these were necessary steps (for whom?) but the gist of it is the executive believes it has the right to do these things. Then as now, as we’ve seen in recent decades, if congress or the courts take no action then there is little to stop presidents. The chief role of congress today seems to be ceremonial or “for display purposes only”.
I’m pretty sure everyone reading this recognizes that you haven’t cited a single source that says that anything you listed has anything to do with the national debt, 14th Amendment, or even fiscal (as opposed to monetary) policy.
I’m still interested in seeing such cites if you can provide them.
You might one day, in the distant future, decide to reconsider trusting your own judgment on these matters.
Excuse me?
You are accusing other people of ignoring simple requests? Here is a list of simple questions and requests that you have ignored in this thread:
To which your response was, and I quote, “Oh puhleeze.”
You still didn’t provide a cite.
As Ravenman points out:
You didn’t respond to this request either.
As for me, I specifically asked you for contracts from the 1970s.
And in response to that, you retreated to discussion of FDR and the 1930s. Except that my criticism wasn’t about FDR and the 1930s. I even wrote: “Maybe you’re right about FDR…” I was criticizing your comments from the 1970s.
It’s clear that you don’t want to answer a simple question.
If the US government defaulted on its bonds under Nixon, you should be able to provide a cite for that.
So I’ll make a deal with you. You show me yours, I’ll show you mine.
If you can provide a cite for any of the following assertions you’ve made in this thread:
You don’t need all of them. Any single one of those would be fine. Provide a cite for any single one of those assertions:
[ul]President Nixon engaged in a default of the national debt when he closed the gold window in 1971. (Your statement is about Nixon, not FDR. Your task here is to cite a US debt obligation from the 1970s which specifies payment in gold, not the 1930s.)[/ul]
[ul]Nixon closing the gold window is “breaching contract law”. (Again, you need to cite actual bond contracts from the 1970s, not the 1930s, to prove that a bond contract was broken by Nixon’s actions.)[/ul]
[ul]In keeping with Ravenman’s requests, any 14th amendment implications of Nixon’s actions. (Can you cite a court case regarding the 14th amendment?)[/ul]
[ul]“Inflation is default”. Can you cite any bond contract or case law that says ordinary levels of inflation imply a contractual default on sovereign debt? (This one is going to be especially difficult for you, because the US Treasury offers two types of securities: regular bonds that don’t protect against inflation, and Treasury Inflation Protected Securities (TIPS) which do specify protection against inflation. So your argument here needs some meat on it: how can inflation signify a default against regular bonds, when the US Treasury specifically offers another breed of securities that contractually stipulate protection against inflation? If people want contractual protection against inflation, they are free to buy that today, which makes your argument here extremely difficult to make.)[/ul]
This is a partial list of “simple questions” that you have been ignoring for the whole thread. You don’t have to answer all of them. You don’t even have to answer two of them. If you can provide factual support for even a single one of these assertions, I’ll give you my opinion on FDR – even though I was never criticizing any of your comments about FDR. I even said you might be right about FDR. Nevertheless, if you can provide an answer for any one of these simple questions, I’ll give you my simple answer on FDR.
An alternative: you may explicitly retract your statement on any one of these assertions, and I’ll give you my opinion on FDR. A simple “my bad that wuz a mistake on my part LOL ORLY WTF BBQ” from you, and I’ll give you my own opinions about the 1930s. It doesn’t even have to be all of them. Just one. A simple cite that backs up your claims about the 1970s, or a simple retraction of one of your claims, and that’s it.
But if you can’t respond to simple requests from others, I’m not sure why you would expect other people to treat you any differently. This is very basic. This is kindergarten golden-rule-type stuff.