Oil Price Stability

I dedicated a good portion of my afternoon toward finding a reliable, historical chart showing the price of oil in gold versus the price of oil in dollars. After a good hour of searching, I found the above chart.

The chart pretty much speaks for itself. After Nixon de-coupled the dollar from gold and ended the Bretton Woods agreement in August, 1971, the era of price instability (in oil as well as other commodities) was foisted upon us by our government. After severing the gold-dollar alliance, Nixon infamously quipped "We're all Keynesians now," a reference to perhaps the most economically destructive personality in the history of the science.

Still, the absence of true economic debate amongst elected officials is reason for concern. The solutions offered by our government varies in degree and not substance, with some brand of socialism acting as the key ingredient. Between advertisements and promises of Federal Reserve-generated bailouts, the underlying assumption that we are to trust government to solve our problems remains the unquestioned constant in economic debate.

The solution, of course, is to return to sound money and get the government the heck out of the economy. I realize returning to sound money is impossible to do overnight, but I don't think it is too much to ask that we begin to pare down unnecessary fiscal obligations (like the bloated--and financially insatiable--defense budget). It is no coincidence that the largest "spike" in the chart coincides with the beginning of the War on Terror.