March 1968 – as if the year wasn’t destined for more upheaval, word from Europe came that a Gold Rush of sorts was on; a Gold Rush aimed at turning Europe wealthy at the expense of the U.S. Dollar.
There had developed, all over the world, a lack of confidence in paper currencies in general and in the U.S. dollar in particular; and individual businesses, organizations of all types including some central banks, were taking refuge in Gold. To many, it was the gravest economic crisis facing the U.S. in a very long time. There were proposals which had proven not acceptable at a recent Central Bankers meeting in Basle Switzerland. However one possible solution was being floated around by the U.S. was to let the dollar seek its own level in a free-market for gold and to secure agreements between major industrial countries that the U.S. would used gold only for monetary purposes and only amongst themselves, and for the U.S. to use its gold stock for purposes of stabilizing exchange rates. If that solution was not accepted, the situation was feared to have a negative domino effect on the potential prosperity of nations all over the world and a financial crisis of grave consequences was in the offing.
Back as far as 1934, in the middle of the Depression, there was no such thing as a stable currency in the world. Trade was impossible because no one knew how much to charge for goods or how much to pay. The U.S. under FDR had decided to go off the Gold Standard and to substitute it for something else – the U.S. promised to buy and sell gold indefinitely for $35.00 an ounce. It was that promise which, by 1968 the U.S. was asked to keep. The world had looked at Americas $30 billion deficit, at the adverse balance of payments problem, and at the enormous amount of dollars floating around the world, dollars the U.S. must buy on demand, and the world in 1968 suffered a crisis of confidence in the U.S. The confidence of the past was based on American diplomacy, on our domestic politics and on a peaceful stalemate in a nuclear age. The stalemate was shattered by the Vietnam War. And it was the fear that a protracted War in Vietnam would have disastrous consequences unless some major steps were taken to end it soon.
In 1968 it was all about Vietnam – and the backlash to war was being felt in every aspect of our life and culture throughout the world.
Here is an NBC News documentary: The Gold Rush: What It Means To You, as it was aired on March 15, 1968.