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Bretton Woods Agreement not ended

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  • Bretton Woods Agreement not ended

    Circa 1972 US President Nixon terminated the Bretton Woods agreement, taking the dollar off the gold standard. What if Nixon had decided for keeping the dollar convertable to gold. How could that have been made to work (if at all possible) and fail or suceed what would the consequences be?

  • #2
    Sorry, I forgot how boring economics are to most folks


    • #3
      mea culpa

      Originally posted by Carl Schwamberg View Post
      Sorry, I forgot how boring economics are to most folks
      We've all been too busy cat fighting to pay attention to serious posts!

      IIRC, Gold was pegged at 35 dollars to the ounce in 1944, & France started a run on gold in the mid sixties ( I recall Bob Hope at the Oscars saying "theres a- a long nosed French President waiting outside the door to buy your awards...)

      will respond more later. Promise..
      The trout who swims against the current gets the most oxygen..


      • #4
        This was the begining of the great experiment, with the US economy, and was seen as a way, to outspend the USSR in the cold war. By the 1980's this was having the desired affect, and by 1991, we had beaten them.

        But, it was never meant to go on this long, and now with economies today, you are seeing more of a trend to going back to gold. But its kinda of half/half these days, there are still some that want the status quo.

        Keeping us on the gold standard would have made the US more accountantable, and that was not part of the master plan back then, we are still the reserve currence at least for now...

        I'm no economic mega star, but when your close to 16 trillion in debt, that aint good.
        ...Its one of our V-8's...Pursuit Special on methane, super hot!


        • #5
          A few claims I remember from earlier decades:

          'The US gold reserves ammounted to 25% or less than the face value of the US dollars in circulation in 1970-71.' This seems to come from credible sources and I cant recall seeing any credible challenge in over forty years.

          ' Gold standard was removed so the US government could "inflate" its way out of its 1970 debt.' This one crops up occasionally in several forms. A variation was a bit of monetary inflation would reduce overall debt in the economy and help the cash flow in business some how. This one sounds like a over simplified misunderstanding of economic theory or something. maybe someone else knows more about the logic behind leaving the gold standard & expectations.

          Another story is the relationship between decoupling from gold and the dollar inflation of the 1970s. A variety of things fed that extended period of price inflation but as one version goes there was far more suppressed inflationary pressure 'held down' as the 1960s ended than the politicians and many economists understood. This seems fairly logical. The rising wages & expanding middle class of the 1950 & 1960s had used up the surplus of slack in many or most economic sectors. As a teenager I could recognized some of that at a simple & obvious level.


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