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Originally Posted by randolph
I would like to post more of the Stockman article.
Stage 1. Nixon irresponsible, dumps gold, U.S starts spending binge
Richard Nixon's gold policies get Stockman's first assault, for defaulting "on American obligations under the 1944 Bretton Woods agreement to balance our accounts with the world." So for the past 40 years, America's been living "beyond our means as a nation" on "borrowed prosperity on an epic scale ... an outcome that Milton Friedman said could never happen when, in 1971, he persuaded President Nixon to unleash on the world paper dollars no longer redeemable in gold or other fixed monetary reserves."
Remember Friedman: "Just let the free market set currency exchange rates, he said, and trade deficits will self-correct." Friedman was wrong by trillions. And unfortunately "once relieved of the discipline of defending a fixed value for their currencies, politicians the world over were free to cheapen their money and disregard their neighbors."
And without discipline America was also encouraging "global monetary chaos as foreign central banks run their own printing presses at ever faster speeds to sop up the tidal wave of dollars coming from the Federal Reserve." Yes, the road to the coming apocalypse began with a Republican president listening to a misguided Nobel economist's advice.
Apocalypse?  |
I have long argued with colleagues that the two most important dates in twentieth century history may well have been:
August 15, 1971: The day Nixon ended the Bretton Woods system and ended trading of gold at the fixed price of $35/ounce.
August 4, 1914: The day "socialists" in European parliaments sided with their bourgeois governments and voted in favor of extending war credits so that World War I could be waged (thus compelling the Bolsheviks to declare the end of the Second International and the need for a new Third International).
What is it about August?