The Nixon Shock

[Jim Eshelman]

https://en.wikipedia.org/wiki/Nixon_shock

In a decision made August 13, 1971, and executed publically August 15, President Nixon effectively removed the U.S. from the gold standard. There is a great deal more to it than that - detailed in the article linked above. Nixon gave a speech on the evening of the 15th, which I will estimate as 7 PM.

A few bullet points from the article. The story is more complicated than these points will capture.

* An important international agreement called the Bretton Woods system was crafted in the aftermath of WW II to stabilize the increasingly interconnected international financial exchange. Among many details, the system anchored the various international currencies to the price of gold.
* Over the next 20 years, this system became increasingly unstable and appeared to be long-term untenable. A main cause was that more money was issued than there was gold to back, so that a run on redeeming cash for gold would have collapsed national and international money systems. (That's very simplistic BTW.)
* Pres. Nixon unilaterally withdrew the pledge to redeem American currency with gold. Though he promised to reverse this after Bretton Woods was reformed,
* Specifically, Nixon suspended gold conversion, imposed a 90-day freeze on wages and prices (to counter any drive toward inflation this order might cause), and imposed a 10% surcharge on imports to protect the value of American products. He sold this as creating jobs and halting inflation, a broad protection of the U.S. dollar (which, for different reasons, it was).
* This was received very well by the American public. The Dow Jones immediately rose more that it had ever risen in a single day. Bipartisan praise emerged.
* There were adverse longer-term consequences to the economy/
* We would expect astrological indicators of the time to reflect the nature of the move at the moment it occurred, and the immediate response.

[SteveS]

Excellent Jim. According to what I was told in 1976 by the Admiral (will post in other thread later), Nixon shutting the gold window was a huge financial earthquake that affected every American financial future in a ugly manner--without most Americans and small companies realizing what was about to happen to their economic futures.

[Jim Eshelman]

Year: Capsolar
Mercury on IC (2°23')
Pluto widely foreground
-- Mercury-Pluto sq. (1°06')
Moon-Venus sq. (0°35' in mundo)
Moon-Neptune sq. (1°57')

Bridge
CapQ Moon op. CapQ Jupite (0°33')

Quarter: Cansolar (Dormant.) Moon-Jupiter op. (1°39').

Quarter: Arisolar
Mars on IC (0°50')
Sun on WP (1°56')
Uranus more widely foreground

Month: Caplunar (Dormant.)

Week: Arilunar
Moon sq. MC (1°23')
(Uranus is distantly foreground

Day: Capsolar Quotidian
p Asc sq. t Sun (1°06')

Day: Cansolar Quotidian & Transits
p Moon op. p Jupite (0°33')
p EP conj. s Uranus (0°42'), t Uranus (1°41')
---------------------
t Mercury sq. s MC (1°03')

[SteveS]

Jim, I read this Capsolar with hindsight-- angular Mercury-Pluto (even though mundo Pluto is wide) backed the US up to the wall, forcing Nixon to close the gold window. With the tight angular Mercury-Pluto 90, this produced an outstanding Mercury-Pluto incident. Your thoughts?

[Jim Eshelman]

Steve, first let me say that I'm not too impressed with these charts. Certainly not too impressed that there was a critical event centered on the specific day; perhaps the effects are broader, and Nixon's execution of the steps on or about August 15 was just one step in the larger shift.

Simpler patterns, such as outer planet sign transits and mutual aspects, seem to have a lot to say about the broader time. I've never really thought through how Pluto's transit of Virgo might have affected business (and strategic planning) in general - I'd need to research what actually happened. We were in the near aftermath (2 years) of the Moon landing, and there was a lot of reorientation of things. Uranus and Pluto in Virgo and Neptune in Scorpio had settled in, with the real players of the year being the eventually-polarized pair of Jupiter in Scorpio and Saturn in Taurus. Nixon's move came with Jupiter conjunct Neptune - his timing was good, because people initially took this as a speculation opportunity the market soared. People wanted to be happy and see this as a good strategic move for the country. Negative repercussions came later, probably after the Jupiter-Saturn opposition was settling in. (Saturn had been opposite Neptune earlier: People were eager to shift from a Saturn-Neptune vision of the future to a Jupiter-Neptune vision.)

The U.S. was primed for some big changes - Watergate was just around the corner, and we ee this in the U.S. progressed chart. With natal and progressed Pluto at 6° Capricorn, progressed Sun was 4 1/2° Capricorn, so Watergate hit as Sun-Pluto matured. Progressed EP was on Saturn, progressed MC still in close orb with Pluto: We'd interpret this as devastation, and I'd say the impact was far more severe than understood at the time (and, with Pluto, a "no going back" change).

But, coming back to your question on the Capsolar...

The Capsolar seems to be the main chart for this. Not only is it the most vivid, the most active, it also covered a larger period of time, and I don't think this was a "point-event." The first thing I noticed in it as the close Moon-Neptune square - never a promising sign for the economy (among other things). It is a universal aspect, operating everywhere in the world; and, over every part of the world that relied on Bretton Woods (most advanced countries, and most of the world's economy), this was, indeed, a bad thing - something creating confusion and disorientation - a sense of betrayal.

Washington, though, had a partile mundane Moon-Venus square. This did not apply to the whole world, and there were a lot of people really happy in the U.S. over this move. Some of it was delusional (Moon-Neptune), but it was mostly seen as something to celebrate (Moon-Venus).

Washington's Capsolar also had a closely angular Mercury, about 1° from square Pluto. This is too vague - too broad, too many possibilities - to be obvious in advance of its meaning. One hindsight observation:Though the particular angle of a planet has not been obviously important in these ingresses, the pivotal Mercury is on IC, historically related to wealth, economic reserves, things that come from mines - all of these are thematically sound for 1971.

Mercury-Pluto involves some kind of confrontational information or communication, some kind of collision of ideas. My first impression, on seeing the chart, was simply (broadly) that it was some really big move, something strategic and confrontational without involving the military, something involving a major shift in thinking (as it did). This was, indeed, a paradigm shift in money policy,

Next, after the Capsolar itself, the most important factor was that progressed Capsolar Moon opposed Jupiter. This lasted a couple of months, and all the consultation, decision-making, and action occurred in that two months. Aside from the broad brushstrokes of Moon-Jupiter having something to do with money, this decision was very popular in the U.S. at the time.

It also has a number of Moon-Jupiter qualities. Besides the "soaring stock market" character, the short-term sense of prosperity and pride (giving new motivation for "American first" buying), and the general sense of protectionism, Moon-Jupiter has a very distinctive flavor in mundane astrology: It signifies especially a theme of “our people first,” such as strong elements of national pride, patriotism, family, community, and standing first for those groups with which one most personally identifies; in other words, it's a bit of we're going to look after our folks, and screw the rest of you because you are not us." It certainly supports elitism.

Moon-Jupiter is doubled-up by the Cansolar: It is the only active factor in the dormant chart.

With Sun and Mars angular, the Arisolar could have been a war chart - certainly an aggressive one - and this was clear "big stick" financial aggression.

The rest is... no big deal. Pinning something down to the week or day doesn't give us much. Sure, the Uranus on the actual day shows change and surprise, but that's not very impressive.

Those were my thoughts on these charts.

[SteveS]

Yes, I understand Jim with nothing on the day charts. And the announcement of the closed gold window had no immediate economic impact, politically or media publicly. There is so much that goes on behind closed doors in our government, it is sometimes difficult for me to come to a correct foresight conclusion for a Capsolar. Certainly these charts don't speak of the economic drama event Admiral painted to me with Nixon's decision, but...Mercury (commerce) was the most angular planet with the Capsolar. I like your approach to interpreting DC mundane charts with DC stuff which become immediately obvious with rich astrological symbolism.

Wikipedia headlines this closed gold window as the 'Nixon Shock', maybe Pluto in the angular picture for 'Shock' but 'Shock' to who/what exactly? I think only a few people in the economic world understood the long term consequences for certain economic situations for a-lot of Americans in the future, and I was lucky to cross paths with Admiral explaining in detail how this 1971 Nixon decision was going to affect my personal economic world in the coming future. And we both know Nixon didn't have the economic sense to come to this 1971 gold window decision by himself. I have always looked upon the Prez as a puppet with other power people behind the scenes--some known--some not known.

[Jim Eshelman]

I like your approach to interpreting DC mundane charts with DC stuff which become immediately obvious with rich astrological symbolism.

This has become a routine tool: It's why I call ecliptical Moon aspects "universal aspects," meaning that they are applicable everywhere (universally); whereas mundane aspects are distinctive to a narrower region. (Unfortunately, we don't have tools to lay out the bounds of that region.) One of the things to fall out of the "stretching the system" study of ingresses - though it's a mild effect - is that any close (say, 3°) mundane aspect that isn't also an ecliptical aspect is probably important. There are a lot of disasters in some categories that have, say, a mundane Sun-Saturn aspect that only exists for a limited part of Earth - it doesn't exist ecliptically. Therefore, these are as distinctive to a geographic region as angularity is.

Wikipedia headlines this closed gold window as the 'Nixon Shock', maybe Pluto in the angular picture for 'Shock' but 'Shock' to who/what exactly?

Well, it was a shock to the rest of the world, for sure. The term isn't unique to Wikipedia. There are scores of online images using the term:
https://www.google.com/search?q=the+nix ... 24&bih=633

Apparently, it has become a standard term for economic and political historians to use for the event.

And we both know Nixon didn't have the economic sense to come to this 1971 gold window decision by himself.

No, but he had counsel j(including a Camp David huddle two days earlier) from people like Paul Volcker and Arthur Burns. They definitely had the brains, and the inclination. I was surprised to see that John Connelly (then Secretary of Treasury) was a core advisor in this - I didn't think he had the brains for this particular kind of thing. But I've always thought Connelly was especially one of the big players that was under major outside "influence" - for example, he has always seemed to me more than a simple secondary victim in the Kennedy assassination.

I also think that this wasn't new turf to Nixon. He'd been in Congress since just after WW II IIRC, quickly became a big player, was Vice President for eight years. I don't know how much Ike confided in him on such things, but I'm sure that Ike fully understood the importance of Bretton Woods, and had the strategic mind to see its long-term, as well as short-term, meaning. Nixon may have been well groomed long before he made this move.

[SteveS]

Jim, with your keen political mind, I think only you fully see/understand the workings of DC with mundane charts. I only wish you and others could understand what Admiral taught me pertaining to this so-called 'Nixon Shock', and how it affected everyone in the World economically. As my Jup-Node thread progresses, I will try to explain how the closing of the gold window affected us everyday working people by hurting us economically with less purchasing power of our hard earned income. It acted like an invisible hand stealing our economic stability by destroying the purchasing strength of the US $, and is still robbing us blind, and IMO, there is absolutely no political answer (both parties) to this 'Nixon Shock,' economically. I would have never come to understand certain things economically if it had not been for the Admiral teachings.

[Jim Eshelman]

I look forward to you spelling it out for us.

It has clear that there has been a shift in valuation. Just by inflation alone, $1 in August 1971 buys what $6.05 buys today. But this has been a trend for a long time: $1 in 1944 when Bretton Woods was adopted bought $2.31 worth of goods in 1971. (x2.31 in 27 years and x6.05 in 46 years are 8.5% vs. 14.7% increase per year in average, so the pace has been accelerated.)

[SteveS]

Jim wrote:

It has clear that there has been a shift in valuation. Just by inflation alone, $1 in August 1971 buys what $6.05 buys today. But this has been a trend for a long time: $1 in 1944 when Bretton Woods was adopted bought $2.31 worth of goods in 1971. (x2.31 in 27 years and x6.05 in 46 years are 8.5% vs. 14.7% increase per year in average, so the pace has been accelerated.)

Exactly Admiral's main point (but much worse) to get me to see/understand what the 'Nixon Shock' was going to do to us working people in the coming years with our living standards.

[Jupiter Sets at Dawn]

The "Nixon Shock" was going off the gold standard, so France couldn't limit the US money supply by turning in US dollars and converting them to gold.

I think the information in this wikipedia article on the Gold Standardgives a bit more of the basis of Nixon's move, what was supposed to happen, what actually happened, and it even talks about BitCoin.

[SteveS]

Nixon went off the gold standard for excellent reasons, if not, other countries would own all the gold this nation has produced since inception. "He (Country) who owns the gold--rules." It is impossible for our economic system to be on a gold standard, but 1971 marks a time period where the purchasing power of the $ started tanking in a hurry. Think of it this way--1971 one ounce of gold cost $35.00 today one ounce $1,240, then the cost of living in 1971 compared to today's cost of living. I know most incomes/salaries have not kept--up with the cost of living--compared to 1971.

[Jupiter Sets at Dawn]

Except for a long period right after WWII, income didn't keep up with COI before 1971 either. We're always, and will always be behind the curve unless we're in the Donor class. And sometimes not even then.

[SteveS]

JSAD wrote:

We're always, and will always be behind the curve unless we're in the Donor class. And sometimes not even then.

Yep, and getting worse more rapidly in the times we find ourselves.