On August 15, 1971 Richard Nixon announced the suspension of converting dollars into gold or other reserve assets. This event was followed by silver prices moving higher between 1971 and 1974.
On June 6, 1974 the Saudi Petrodollar Memorandum of Conversation was issued. This initiated the process of Saudi Arabia investing proceeds of oil sales into U.S. Treasury’s. It also provided the U.S with a global reserve currency. The price of silver continued to rise as Economic Recovery and Bailout Packages continued to grow exponentially.
Forty years later a select group of countries signed the BRICS Development Bank Treaty in July, 2014. This bank will simplify settlement and lending among BRICS countries and reduce the dependence on U.S. Dollars and Euros for trade. It will also start a long term trend of Dollars moving back to the U.S. as countries around the world conduct trade with their own currencies. The price of silver is expected to move higher over the long term as this process continues.
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