Niall Ferguson: Nixon, the Gold Standard and a Bitcoin Bonanza

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It was Sunday night, August 15, 1971, and many Americans were watching television – the most popular show that night was the Western series “Bonanza”. (Older readers will recall he recounting the adventures of the Cartwright family – Ben, his three sons, and their Chinese cook – on their Ponderosa ranch in Nevada.) At 9 p.m. EST, the Cartwrights and their rivals on the other two networks were interrupted by the somewhat less popular figure of President Richard Nixon.

The word “bonanza”, according to the Oxford English Dictionary, was introduced into American English in the 1880s to describe a highly productive or profitable mine, such as the silver mines of Comstock Lode in the land of Cartwright. Ironically, Nixon was disrupting Sunday night to tell Americans that the days of precious metals were over. The link between the US dollar and gold – a link that dated back to the country’s adoption of the gold standard nearly a century ago – had to be severed. The era of fiat money, that is, a currency backed by nothing more than the credibility of the US Treasury, had arrived.

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