[EVENT] An Emergency Measure

22 May 1966

As with many of the ills plaguing the Western world in the past few weeks and months, it all goes back to the British. Having massively overstretched themselves through much of the 1960s in an attempt to keep their territories and global influence intact, the British are now in the midst of a major economic crisis. Governments have collapsed, the British Armed Forces are enduring major cuts, and the Pound Sterling has been devalued. But most concerning of all these developments is the collapse of the London Gold Pool, which has very real and serious implications for the United States and its gold-backed currency.

There were other factors from other actors at play of course, but the United States has found itself no longer able to redeem foreign-held dollars into gold, and unable to balance the outflow of gold reserves due to the excessive inflation of the American money supply. Gold supplies themselves have also plateaued in the past few years to make matters worse. Faced with the possibility that the United States would be dragged down with Britain, Congress acted decisively and voted nearly unanimously to repeal the requirement for the Federal Reserve to maintain a gold stockpile equal to 25% of all USD in global circulation. President Nixon has now the bill into law.

Whether this is just the first step of many, and what effects this will have on the global economy, remain to be seen.