I was a young man at the time and had previously bought gold, albeit on a very small scale, but I recall looking into the face of this delusional man and thinking, "This is not good."

However, the world at large apparently agreed with Mister Nixon, and within a few years, the other countries also went off the gold standard, which meant that, from that point on, no currency was backed by anything other than a promise.

Party Time

It didn't take long before countries began playing with their currencies. At one time, the German mark, the French franc, the Italian lire, and the British shilling had all been roughly equivalent in value, and four or five of any one of them was worth about a dollar.

That had already begun to change prior to 1971, but following the decoupling from gold, the governments of the world really began to see the advantages of manipulating their own currencies against the currencies of other nations.

From that point on, a currency note from any country, which was already no more than an "I owe you," was increasingly degraded to an "I owe you an undetermined and fluctuating amount."

This fixation with monetary manipulation began much like the 1960s youths' experimentation with drugs, and by the millennium, had morphed into something more akin to heroin addiction. Unfortunately, those who had become the addicts were the national leaders in finance and politics.

Well, here we are, in the second decade of the millennium. The party has deteriorated and is soon to come to a bad end.

As we get closer, those of us who have, for many years, predicted an eventual realisation that Mister Keynes and Mister Nixon were dead wrong and that the world will once again look to gold are, at this late date, gaining a bit of traction.

We're seeing an increase in the number of people who recognise that all fiat currencies eventually come to an end and gold will continue to shine.

But there are two remaining questions that have even the best of prognosticators puzzling.

1. What Will the Role of Gold Be in the Future?

When currencies collapse, will there be an immediate and complete switch to gold? Unlikely.

Will further fiat currencies be put forward as solutions to paper money? Almost definitely.

Will future currencies be backed by gold? Probably, especially as so many governments and banking institutions are quietly scrambling to buy gold whilst trying not to let on the extent of their stockpiling.