Quote:
Originally posted by RoninLB
Times were less complicated under the fixed gold standard post WW2. We could export our inflation and the world absorbed it. Today it's productivity that rules
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Well at least one of U idiots understands something....
The economic situation was completely different in 1980.
As Ronie said the US was able to export our inflation onto the world with Gold being fixed at $35 an OZ...In 1972 Nixon took the US Currency off the Gold Standard. We had been finacing the Vietnam war off the Gold standard. Remember when DeGaulle said he wanted the US $$$ he was holding to be paid back in Gold, that was in 67.
We had forced the OPEC nations to EAT OUR $$$$ at an inflated rate..so once the US abandon the Gold standard they were left holding $$$ that were DEVALUED..so they said in 1973 we are going to up the price of oil on U SOBs....
This devaluation of the $$$ caused a hugh round of inflation in the USA....the cost of a new Porsche, Houses...in CA it was the 1st time the price of housing really took off and escaluated and to bring all of this back down to earth the Fed had to raise interest rates to cool the economy....so the 30 year Bond hit 18% and Mortgages hit 16%. Thus the price of housing took a dump while the price of equities started rising till 2000.
After those highs interest rates were on the decline till Greenspan started raising them in 2004.
Take a clsoe look at the economic/financial history of the past 40 years and U will see that 911 opened the ABYSS, the ramifications/ripples of which are still with us today.
To advert a collapse of the world financil system by a run on the bank the Fed had to keep liquidity at a very high level. Now that 911 is receding in our memories a return to more normal levels can take place. The price of oil as Wayne so elequantly said has been driven by Wall Street Speculators that are playing the fear of a ME blow up. Once they have been handed their heads financially you can see the price of equities rise for the next few years while the price of housing declines to match affordability..eg.. wages...