Fifty-five years ago, Richard Nixon closed the gold window. Heaping blame on Nixon isn’t really fair, as the problems with Bretton Woods had begun much earlier. Nonetheless, Nixon brought the axe down on the gold standard, pushed by the Vietnam War and loss of confidence in the dollar by other Bretton Woods participants.

You can see in the chart below that the dollar’s purchasing power has dwindled to a sliver of its former self since the closing of the gold window. That’s the slow theft of the savings of the American people.

At the Ron Paul Institute, Dr. Ron Paul laments the closing of the window, and the dying of the gold standard. He writes:

Closing the gold window left the US with a pure fiat currency. The results have been disastrous.

The dollar has lost over 97 percent of its purchasing power since the Federal Reserve was created in 1913, with most of the dollar’s decline occurring since 1971. Fiat money is the real cause of the affordability crisis.

Fiat money encouraged the growth of federal spending. By severing the last link between the dollar and gold, President Nixon enabled the Fed to monetize an ever increasing amount of federal debt. The federal debt was around 400 billion dollars when President Nixon closed the gold window. Just ten years later, the federal debt reached a trillion dollars. Today, the federal debt exceeds 39 trillion dollars and increases by a trillion dollars every three to five months.

The expanding national debt puts pressure on the Fed to keep interest rates low. This is because a small increase in the national debt substantially raises the government’s debt payments.

Are there problems with a gold standard? Sure. Usually those problems lie with politicians who want to spend more money than they have. But gold, unlike paper dollars, is, as Ayn Rand explained in Atlas Shrugged, “an objective value, an equivalent of wealth produced.” It is unchanging, and while some new supplies of gold are mined and poured every year, its capacity for supply inflation is nothing compared to that of fiat money.

Paul calls it the “Unhappy Anniversary.” Watch: