August 15, 1971 – The Beginning Of The End For US Hegemony
Thu 10:58 am +00:00, 21 Aug 2025Source: https://blog.algora.com/2025/08/18/august-15-1971-the-beginning-of-the-end-for-us-hegemony
Fifty-four years ago (August 15, 1971), Nixon took the USD off its gold standard, thereby officially putting the final nail in the Constitutionally mandated concept of US money.
But hey, at least the Constitution can still serve as a nice museum piece for kids to walk past.
First, the decoupling from gold has lasted more than half a century, so it hardly feels “temporary.”
As for the USD holding its purchasing power, well, when measured against a milligram of gold, that paper dollar has lost > 99% of its value since 1971.
Meanwhile, and contrary to the expert hearing testimony of a 1971 Fed Chairman and Treasury Secretary, gold has not got down in price, but has risen, by well… 8000%.
EIGHT THOUSAND PERCENT.
Huh?
Looking Ahead? It Looks Bad…
All of the foregoing facts confirm just how debt-distorted the US economy and narrative are, as of 2025.
They also confirm just how debt-trapped US policies have become. More importantly, they confirm just how doomed the US economy is going forward.
This is because the US growth narrative has zero good options left to it. Once debt/GDP ratios cross the 100% Rubicon (we are now at 120%+), growth mathematically slows by 1/3.
And the only way to bring this debt ratio down is via massive spending cuts well beyond the DOGE or USAID cuts. The real debts come from entitlements and military spending, which no politician can or will touch.
The US Already in Default?
Again, this leaves the US with only bad options to address unsustainable debt. It can either default or inflate away its debt.
Guess which option DC will (and has) take(n)?
But here’s the rub.
By inflating away its debt via currency debasement, inflation levels are soaring past UST yields, resulting in negative real rates – i.e. a NEGATIVE returning UST, which by definition, IS a defaulting bond.
The ironies abound…
But the US avoids publicly displaying this irony and default by simply lying about (i.e., misreporting) the US inflation rate, measured by a CPI scale that has been “modified” over 20 times since the Volcker era to mask actual inflation data.
Again: Just more desperation hiding in plain sight.
