The tide of monetary history has been gradually moving against the United States. For the past century we have had our own way with money. The chapter is now on the last page, as the United States with its "money" monopoly, has exploited its citizens as well as the world to the point of exhaustion. The Dollar, having lost more than 98% of its value since the Federal Reserve was created in 1913, is running out of victims. All the monies of the world are dying, and gold and silver, true money, are being manipulated in an attempt to maintain the illusion of worth for an increasingly worthless dollar. It is in the interest of the Fed and Treasury to maintain the perception that you don't need gold anymore, that money in mutual funds is safe, and that all is well. The perception that "all is well" is all they have left. Reality is otherwise. The current monetary system, facing the greatest defaults since the 1930's, is bankrupt.
Greenspan saying Enron won't affect the economy as if it were a seperate entity and no other concerns are warranted. What about JP Morgan,etc.,etc.? More than I have time to go into besides I realize that most are in denial and are attempting to will the market up and will believe ANYTHING Greenspan tells you. You are smiling while he is
In the intrest of information even though at this point its academic another poster answered my question, thought you might enjoy. ciao.
AMR 26.10 -0.96
APA 52.75 +0.45
DAL 34.50 -1.31
During the period between the world wars, there was an international dollar shortage that did little to help US trade. This shortage continued for the first few years after WWII and, given the destruction of much of Europe's productive capacity and market, the quantities of money available via the Bretton Woods institutions, the IMF and World Bank, were completely insufficient to help prevent Europe's collapse back into depression.
Recognize that we needed market and that the cold war was just beginning, both of which were the foundation of The Marshall Plan during which we pumped dollars into the European and world economy. Basically an attempt to reliquify the world, an attempt that succeeded.
Along with this, we - for years - ran balance of payments deficits, which is to say that more dollars moved overseas than returned, so continued adding dollars to the world system.
At least as early as the late 50's, a few economists began to see the coming problems. Robert Triffin for example pointed out the dilemma - our balance of payments deficits were, on one side required to keep the 'machinery' of world trade well oiled, to avoid a collapse of trade.
But, on the other side, to continue them also meant a growing dollar glut so pressure on/by foreign governments to cash in their dollars for gold.
That is, we had to continue adding liquidity but by doing so we also guaranteed a breakdown of the gold-dollar link. Even by 1960, our gold supply was less than the quantity of dollars held outside the US, and this only intensified. We increasingly had no way to cover the gold obligation side of the dollar.
And then, the fixed exchange rate regime constructed in 1944 could only become more problematic as the European and Japanese economies not only recovered but caught up with us. And as the first large wave of multinational firms, followed by the banks, developed from '58 on. And then wartime spending during the 60's. By late 1960's there were too many dollars in the system, and they were overvalued as a number of European countries - Germany, England, France - found it necessary to devalue their currencies. The still relatively new eurodollar market was both a stabilizer and means towards currency instability as it provided a 'parking area' for US funds seeking to escape the minor capital controls that were in place here, i.e. allowed for, assisted with capital flight out of the US and the further internationalization of banking.
We had moved from dollar shortage to dollar glut; from a simple national to fully international economy; from war to peace to war; from post-WWII economic boom and necessary rebuilding of other economies to a world in which those other economies had caught up and in which the boom was ending - we had moved into a period of currency volatility. Nixon's stroke of the pen in 1971 was part of a planned series of dollar devaluations - there was no way to save the dollar/gold standard, it was left over from an earlier period, had been become a constraint, was overcome.
Abook by Michael Moffitt, "The World's Money" is worth a read, as is one by Walter Wriston, "The Twilight of Sovereignty".
I have no idea what goes through a politition's mind when they open their mouth. I don't care if it's a democrat or a republican. They always seem to do something that I disagree with, so I usually just roll with the punches.
For a different point of view may I suggest "Stocks For The Long Haul" by Jeremy Siegal, 1998. He gives an excellent history of the effects on both Great Britain and the U.S. economies AFTER they went off the gold standard. True, inflation did manifest itself after the change but returns from stocks (not bonds)significantly increased the real income for investors.
In fact, most of the Nifty Fifty stocks in 1972 were undervalued! Our biggest problem is realizing which stocks are presently undervalued but have the potential to achieve great results.
Even though I am underwater with IRF, I believe it is one with huge potential.
Hello oversaul, Its academic at this point but I'm always intrested in learning so maybe you can answer this question. Why did Nixon dishonor international dollar claims to gold in 1971, causing the collapse of the Bretton Woods Agreement when America defaulted on its dollar obligations? Speaking of analysis of money its unfortunate that few understand how our government and Greenspan's monetary policy/system betrays our wonderful heritage and threatens to consume our wealth.
You know, those people that are ruling the world and arrive at meetings in black helicopters. That�s right. They know you know ! You�ve gotta be more careful. Do what I do. Play dumb. Act na�ve. Just assume that because people much smarter than yourself tell you everything is Ok that everything is OK man. Buy into the system. Everything will be OK. They don�t like people like you that question everything. And know the real truth. That we�re all tiny cogs in their master plan for world domination on yours and mine�s backs. Never admit that our economy has always been a farce. Even though YOU know it is true. And you and I are relegated to slavery for the rest of our lives. And we will all be trading flour for chickens real soon while these sinister powerful people rule over us. You are crazy man. CRAZY !
Me beau coup Dinky Dau. I know they know me, they send me my little check each month but they know I never keep my mouth shut. Thats why when I finally came back to "The World" from the Green Latrine('Nam)they busted me from sp/4 to pvt. E-1(over 5 years;-)3 special courts martials and stockade etc. Something about defiance and bad attitude. "Apathetic and defective attitude" is how my DD212 read. Since upgraded to 214 Honorable. They know most won't believe me and now even more so, eh. But actually some day you will realize unfortunately I'm not crazy. Sin loi minoi.