Posted on 09/14/2009 4:50:39 AM PDT by SeekAndFind
President Nixon's Treasury Secretary John Connally once famously quipped to a gathering of European central bankers that "the dollar may be our currency, but it's your problem." Connally got it partially correct.
Rather than a problem solely suffered by those outside the U.S., the dollar's debasement on Connally's watch brought Americans great harm too. Devaluationist policies never enhance growth, and just as they created problems for the rest of the world, they similarly gave us the lost decade that was the 1970s.
Connally made his comment when the dollar seemingly had a definition in terms of gold. The dollar was on the gold standard at one-35th of an ounce, and the rest of the world was on a dollar standard. It's not discussed much today, but the Bretton Woods agreement that pegged allied currencies to a stable dollar from 1944 to 1971 was the biggest factor in the world's post-World War II economic revival. Currency stability leads to the very wealth-enhancing trade that is essential to economic growth.
Despite the $35 per ounce definition, by 1970 private markets for gold reflected a price of $47 per ounce. At $47, investors were correctly pricing in the likelihood that President Nixon would take us off the gold standard, and as such, did not wait to devalue the dollar. The dollar's decline quite simply was inflation, and since most currencies around the world were at the time defined in terms of the dollar, individuals lacking a U.S. address also suffered our inflationary mistake.
Sadly, the low levels of inflation before the 1971 evisceration of the Bretton Woods agreement were a minor, and largely benign, hint of what was ahead.
(Excerpt) Read more at forbes.com ...
More one world communist wet dreams.
LLS
Nix the dollar? Has Nakita Kruschef been reincarnated?
In order to stem the tide of leaping before people look, the gyst of his argument is that we should return to commodity-backed currencies, whether it be gold or something else.
Yep... right along with hitler.
LLS
One cynical thought that occurs to me is that much of the free world has counted on the US staying capitalist in its productive output and outlook (with only just a little socialism to help its poor) so that the rest of the “free world” could indulge in a much more socialist lifestyle because they didn’t have pay for their defense.
Even nonfree poorer or Communist nations counted on our out-put because they could always count on our libtards to agitate enough so that “free food aid” would be sent their way out of the excess of our largess...there-by helping their repressive regimes to stay in power.
Now Obama wants to tip the balance and make us a socialist nation in a much more dramatic way and the rest of the world is now realizing that the gravy train is over. No more free rides!
Earthquakes and natural disasters will be suffered by poor nations much more acutely because the US won’t be coming to the rescue....we just won’t have the money or the military infrastructure to provide such aid! The money went to funding corrupt unions and political officials and the massive tax increases have destroyed jobs and discretionary income. Even our charities won’t be able to help very much; no one will be able to donate to them!
I beleive China will starting to dump dollars.http://www.bloomberg.com/apps/news?pid=20601087&sid=a9igRzOC55wE
Nix The Dollar! It’s time use steel pennies,copper dimes,lead nickles,aluminum dollar that obama thing sure is working out BAD.
The lunacy of the "global warming" hoax cannot be comprehended other than that its masochistic advocates do not want their civilization to prosper. The culture-destroying immigration policies that Pat Buchanan warns are causing "The Death of the West" were put in place by those who do not want their culture to survive.
Good point. On a few occasions I've run into U.S. and foreign nationals who badmouth "The American Empire". What has always flummoxed them is my question "Tell me, then, who do you want on top?". I always got a deer-in-the-headlights look as it dawned on those idiots that anybody else would be far worse.
If things don't turn around, it looks like they may find out the answer to that question.
Same here. I've used this exact scenario with a few of my German friends. They always seem to be quick to badmouth the USA, claiming we are imperialists. When I ask them what alternative they would like to see as the world's lone super power, like China, Russia, or, worst of all, Islam, they suddenly start backpedaling. Amazing how sobering a little bit of stark reality can be, isn't it?
Are there any currencies in this world that are pegged to gold?
I wonder when or if God shall again authorise new books of the Bible to be written, if God shall comment, “I gave the world a vision and practical example as to how a free people, spiritually awakened, could build a strong nation with MY HELP and be blessed beyond measure...but the world rejected it and America’s own people became divided because they lost their faith in Me...thus she became shattered like broken pottery and cast into the wastes of timelessness.”
Fine...we’ll enjoy cheap chicken and other food products and the Chinese can starve!
If fiat currency doesn’t work on a national scale, then how about a world-wide scale?
The world is too big to fail!!!
Someone has to say it around here: You hate America firt!
China dumping the dollar means the dollar will be worth less. That chicken will cost more dollars.
I hate America “firt”?
LOL! Not sure if you were criticizing me, being humorous or accusing me of having a brain “firt”!
Not necessarily criticizing you. I was just making fun of people around here who always call people an America hater for pointing out any flaw in America or Americans or daring to disagree with policy that is in favor with the majority.
Well we don’t import chicken so excess chicken on the market would normally mean the price goes down...but if an inflationary spiral develops because of the chinese dumping...the price of the chicken may actually stay the same for a while...until the excess is sold off and production gets cut!
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