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We can now officially celebrate the 40th anniversary of Nixon closing the gold window, and a world run strictly on fiat. Enjoy!
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Re: Happy August 15th!
Here in Spain we celebrate the Ascension (of Holy Mary to Heaven). It seems aproppiate to celebrate also the ascension to Heaven of prices by fiat.Comment
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Re: Happy August 15th!
it would seem he/they didnt have much choice?Originally posted by doom&gloom View Post
as in: he didnt start the vietnam war, and it was LBJ's escalation, along with the 'great society' that busted the budget?
and to think of it today: "....To stabilize the economy and combat the 1970 inflation rate of 5.84%,..."
seems like them days really were 'the good ole daze'
Background
By the early 1970s, as the costs of the Vietnam War and increased domestic spending accelerated inflation,[1] the U.S. was running a balance-of-payments deficit and a trade deficit, the first in the 20th century. The year 1970 was the crucial turning point, because foreign arbitrage of the U.S. dollar caused governmental gold coverage of the paper dollar to decline from 55% to 22%. That, in the view of neoclassical economics and the Austrian School, represented the point where holders of the U.S. dollar lost faith in the U.S. government's ability to cut its budget and trade deficits.
By 1971, the money supply had increased by 10%.[1] In the first six months of 1971, $22 billion in assets left the U.S.[2] In May 1971, inflation-wary West Germany was the first member country to unilaterally leave the Bretton Woods system — unwilling to devalue the Deutsche Mark in order to prop up the dollar.[1] In the next three months, West Germany's move strengthened their economy. Simultaneously, the dollar dropped 7.5% against the Deutsche Mark.[1]
Due to the excess printed dollars, and the negative U.S. trade balance, other nations began demanding fulfillment of America's "promise to pay" – that is, the redemption of their dollars for gold. Switzerland redeemed $50 million of paper for gold in July.[1] France, in particular, repeatedly made aggressive demands, and acquired $191 million in gold, further depleting the gold reserves of the U.S.[1] On August 5, 1971, Congress released a report recommending devaluation of the dollar, in an effort to protect the dollar against foreign price-gougers.[1] Still, on August 9, 1971, as the dollar dropped in value against European currencies, Switzerland unilaterally withdrew the Swiss franc from the Bretton Woods system.[1]Comment
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Re: Happy August 15th!
and then theres this:Originally posted by doom&gloom View Post
Later ramifications http://en.wikipedia.org/wiki/Nixon_Shock
Economist Paul Krugman summarizes the post-Nixon Shock era as follows:The current world monetary system assigns no special role to gold; indeed, the Federal Reserve is not obliged to tie the dollar to anything. It can print as much or as little money as it deems appropriate. There are powerful advantages to such an unconstrained system. Above all, the Fed is free to respond to actual or threatened recessions by pumping in money. To take only one example, that flexibility is the reason the stock market crash of 1987—which started out every bit as frightening as that of 1929—did not cause a slump in the real economy. While a freely floating national money has advantages, however, it also has risks. For one thing, it can create uncertainties for international traders and investors. Over the past five years, the dollar has been worth as much as 120 yen and as little as 80. The costs of this volatility are hard to measure (partly because sophisticated financial markets allow businesses to hedge much of that risk), but they must be significant. Furthermore, a system that leaves monetary managers free to do good also leaves them free to be irresponsible—and, in some countries, they have been quick to take the opportunity.[6]
(but i guess thats OK, when it serves the party line, eh?)
AND THIS JERK/FRAUD/BANKSTER SHILL/DEMORAT PARTY CHEERLEADER IS SAYING ***WHAT*** TODAY ????
blow even _more_ trillions down the rathole ?
and how to do it? ('truth' really is a lot stranger than fiction...)
http://www.huffingtonpost.com/2011/0..._n_926995.html
Paul Krugman: Fake Alien Invasion Would End Economic Slump (VIDEO)
The Huffington Post Jack Mirkinson First Posted: 8/15/11 08:34 AM ET Updated: 8/15/11 01:55 PM edt
Paul Krugman is so frustrated by the lack of support for another round of stimulus spending that he's now calling for a fake alien invasion of the United States to spur a World War II-style defense buildup.
Krugman was a guest on CNN's "Fareed Zakaria GPS" on Sunday. Speaking with Zakaria and Harvard economist Ken Rogoff, he made the same case he has been making for years--that deficits are not the top economic concern of the day. Krugman noted that the effort of World War II helped end the Great Depression, and joked that something similar was needed today.
"If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months," he said. "And then if we discovered, oops, we made a mistake, there aren't any aliens, we'd be better--"
"We need Orson Welles, is what you're saying," Rogoff cut in.
"There was a 'Twilight Zone' episode like this in which scientists fake an alien threat in order to achieve world peace," Krugman said. "Well, this time, we don't need it, we need it in order to get some fiscal stimulus."
Of course, Krugman is just using a space invasion as an example. But that hasn't stopped some people from framing his comments as part of a giant conspiracy by a shadowy group of elites to enslave the world through a fake alien attack.
Last edited by lektrode; August 15, 2011, 01:40 PM.Comment
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Re: Happy August 15th!
So what kind of system do we have ? So no change in 1971 ?
For example, we do not have a fiat money system. We have a hybrid public (government) and private credit money system and have since the 1930s.
http://www.itulip.com/forums/showthr...428#post205428Comment
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Re: Happy August 15th!
Krugman blows........
with the wind when it comes to Democrats.Comment
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