But federal expenditures for the Vietnam War and persistent balance of payments deficits led Richard Nixon to renege to end the direct convertibility of the dollar to gold. Watch his speech below:
When Ron Paul, then a 35-year old OB/GYN who had recently left the Air National Guard and relocated to Texas, heard Nixon’s speech, he realized that what the Austrian school economists had warned against was becoming true. He would later say, “After that day, all money would be political money rather than money of real value. I was astounded.”
The same day, Ron Paul decided to go into politics. After facing defeat in his first attempt in 1974, he won a special election in April 1976 and became a Congressman representing Texas’s 22nd district. A few months later, Paul lost the general election to Democrat Robert Gammage, by fewer than 300 votes (0.2%), but defeated Gammage in a 1978 rematch, and was reelected in 1980 and 1982.
In 1988, Ron Paul ran for President on the Libertarian ticket, but lost. He returned to Congress as a Republican in 1996 and was reelected seven times, also running for President in 2008 and 2012. He is currently in his 12th and final Congressional term as he decided not to seek reelection in 2012 to focus on the presidential race.
40 years after that fateful day in August 1971, the U.S. government is bankrupt, gold is trading at $1,740 an ounce, and Ron Paul is a frontrunner for the Republican nomination for the Presidency.