Inflation in Context

Nixon’s failure to maintain monetary discipline in 1971 triggered an inflationary wave, just as today’s persistently high price increases can be traced to the laxity of President Biden and his fellow Democrats.

AP/HWG
President Nixon on August 15, 1971 at the White House after announcing the closing of the gold window. AP/HWG

When on Tuesday morning the latest inflation numbers are announced, the thing to keep in mind will be the context of 1971, when President Nixon cut the last connection between the dollar and gold. While the January report of the Consumer Price Index could show an improvement over the prior year — economists forecast price inflation will come in at 6.2 percent, versus 6.5 percent in December — that’s still a pace not seen in 40 years.

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