7 ms·

Amazed that the site does not call out Nixon completely abandoning the gold standard in 1971. Financial investments thusly did not need to be backed by actual

Amazed that the site does not call out Nixon completely abandoning the gold standard in 1971. Financial investments thusly did not need to be backed by actual assets anymore, to the point of today where the whole of money is loans against loans against loans.

mason55 6y ago
That’s the point of the site. It doesn’t say it explicitly but leaving the gold standard is the answer to the question in the URL
- definetheword 6y ago
  Ya, I recognized that it guides you to the conclusion: - read first three graphs... "oh, yes, that looks like a problem" - scroll next 5 graphs... "oh, looks like lots of evidence correlates to that year... what happened that year?" - scroll next 5 graphs ... "oh, wasn't it the gold standard that year?" - scroll to the end.. read quote .. "is this a bitcoin quote? No, someone else... wait, but who is River Financial and why do they want me to care"
- addicted 6y ago
  Alternatively, whatever forces led to the government taking as major a step as leaving the gold standard is responsible.
  - Blahah 6y ago
    Not alternatively. Leaving the gold standard may have been one proximate cause, while the desire of the government to have simple tools to provide short term economic relief in the face of complex socio-economic problems is one ultimate goal.
- lumost 6y ago
  Trade with China also opened at around the same time. A plausible explanation for the decoupling of wage growth is competition or the threat of competition with international labor.
SilasX 6y ago
While I'm sympathetic to strong money and therefore explanations like that, it could just as well be that another factor has more explanatory power -- i.e. something else put the US into such dire straits that officials didn't find it feasible to honor the peg. So, what about the (perhaps too simple) explanation that 1971 is when the developed world finally caught up from the destruction of WWII and investors recognized this? That would mean an end to free wealth for the US, as factor productivity is no longer the highest in the world.
lokar 6y ago
That theory would explain financial gains going up faster (eg the pie getting bigger, more return to capital), but not a stall in wages for workers. Worker productivity went up, but wages for workers did not. ~1970 is about when the % of workers in unions really started to fall in the US.
- topspin 6y ago
  ~1970 was the beginning of the rapid growth of commercial intermodal containerization. A couple of WTO charts in this[1] document show the trend. The US military pioneered standardized containers (for shipping supplies to S. Vietnam) in the late 1960's and the commercial world caught on very quickly. Since then the captains of industry in the West have been able to arbitrage labor world wide. Thus labor unions in developed nations, a symptom of labor scarcity, lost their leverage. [1] http://minotusa.com/uploads/40/NorthDakotaIntermodalInitiativeNDIINDTO.pdf http://minotusa.com/uploads/40/NorthDakotaIntermodalInitiati...
  - gen220 6y ago
    The shipping container was the self driving truck of the 20th century. That one invention eventually put so many people out of work, it’s difficult to fathom. We live in Brooklyn near the water. The entire coastline from Red Hook to Greenpoint was once dedicated to the loading, unloading, and storage of pre-shipping container cargo. This industry employed many thousands of people. It was a dangerous job but it sustained families, and it was a bootstrap to a career in the shipping industry. (There are analogies in textiles and meatpacking, in this same city). Now, the warehouses have been converted into housing, coffee shops, art centers, and the like. The working class job is the service industry (waiting, serving coffee, delivering food), and it’s a very different culture from the working class job of the 60s. I’m not at all saying the technological innovation was a bad thing. But it did have a huge impact on the local economies of every seaport in the world (Bay Area included, for those that live there). If you’re interested in learning more, there’s an 8-part audio documentary on shipping containers. You can listen to episode 7 about automation here: https://soundcloud.app.goo.gl/AfzxGaUKuceh4W9W7 https://soundcloud.app.goo.gl/AfzxGaUKuceh4W9W7
  - 6y ago
novia 6y ago
Not only that, but the war on drugs was started in 1971 as well.
- deleted 6y ago
  [deleted]
chmod600 6y ago
I'm curious about the mechanism. It seems important, but can you elaborate on the effects?
- tobmlt 6y ago
  If you are curious for the theory behind this mechanism, a good source is “what has government done to our money“ by Murray Rothbard. It’s freely available here: https://mises.org/library/what-has-government-done-our-money https://mises.org/library/what-has-government-done-our-money
- flurben 6y ago
  The mechanism for U.S. currency creation and management is constantly evolving, and its effects are as well. Effectively what we're talking about are central bank operations, which is a dry and boring subject within economics, that is both misunderstood by mainstream economists and misused (for political reasons) by heterodox economists (many of whom are charlatans). Generally speaking though, everyone tends to agree that central bank policies became looser over the 20th century, and IMHO that's really the only relevant kernel of truth in the OP link, who seems to be a promoter of fringe economic theories. The best place to read about the topic is at the Federal Reserve Bank's website. Alternatively, I would recommend reading any of this : https://orcamgroup.com/understanding-money/ https://orcamgroup.com/understanding-money/
xyst 6y ago
Random thought: since the US dollar hasn't been backed by a physical asset in decades, does it really make sense to prosecute a person(s) for "stealing money." Stealing implies you have taken something of value and requisitioned it for ones self, but since money has no actual value was it really stolen? Especially in the digital age, the numbers you see in your bank account are just 0s and 1s sitting dormant in some server farm.
- mark-r 6y ago
  As long as you can still buy things of real value using money, the money itself has value.
- jeffasinger 6y ago
  If dollars have no value, you should be willing to give away any dollars you have to anyone, no matter how they are using them, right? Dollars don't have a direct value in gold, but there are people willing to take your dollars and exchange them for gold, it's just a ratio that varies over time, along with the value of gold and dollars.
- zeroxfe 6y ago
  > since money has no actual value Ah, the intrinsic value debate (which your entire argument hinges on) never gets old. Setting that debate aside, money has market value -- it's not backed by gold, but it's backed by the power of the government, by the trust of the citizens, and by very strong social expectations. A storekeeper is more likely to accept your money than your gold.
  - 35fbe7d3d5b9 6y ago
    This holds true not just of a storekeeper in the US, but in many other countries as well. The US invested a great deal of both soft & hard power ensuring this is the state of the world.
- ploika 6y ago
  US dollars clearly do have value though. It's foolish to claim otherwise.

mason55 6y ago

That’s the point of the site. It doesn’t say it explicitly but leaving the gold standard is the answer to the question in the URL

definetheword 6y ago
Ya, I recognized that it guides you to the conclusion: - read first three graphs... "oh, yes, that looks like a problem" - scroll next 5 graphs... "oh, looks like lots of evidence correlates to that year... what happened that year?" - scroll next 5 graphs ... "oh, wasn't it the gold standard that year?" - scroll to the end.. read quote .. "is this a bitcoin quote? No, someone else... wait, but who is River Financial and why do they want me to care"
addicted 6y ago
Alternatively, whatever forces led to the government taking as major a step as leaving the gold standard is responsible.
- Blahah 6y ago
  Not alternatively. Leaving the gold standard may have been one proximate cause, while the desire of the government to have simple tools to provide short term economic relief in the face of complex socio-economic problems is one ultimate goal.
lumost 6y ago
Trade with China also opened at around the same time. A plausible explanation for the decoupling of wage growth is competition or the threat of competition with international labor.

SilasX 6y ago

While I'm sympathetic to strong money and therefore explanations like that, it could just as well be that another factor has more explanatory power -- i.e. something else put the US into such dire straits that officials didn't find it feasible to honor the peg. So, what about the (perhaps too simple) explanation that 1971 is when the developed world finally caught up from the destruction of WWII and investors recognized this? That would mean an end to free wealth for the US, as factor productivity is no longer the highest in the world.

lokar 6y ago

That theory would explain financial gains going up faster (eg the pie getting bigger, more return to capital), but not a stall in wages for workers. Worker productivity went up, but wages for workers did not. ~1970 is about when the % of workers in unions really started to fall in the US.

topspin 6y ago
~1970 was the beginning of the rapid growth of commercial intermodal containerization. A couple of WTO charts in this[1] document show the trend. The US military pioneered standardized containers (for shipping supplies to S. Vietnam) in the late 1960's and the commercial world caught on very quickly. Since then the captains of industry in the West have been able to arbitrage labor world wide. Thus labor unions in developed nations, a symptom of labor scarcity, lost their leverage. [1] http://minotusa.com/uploads/40/NorthDakotaIntermodalInitiativeNDIINDTO.pdf http://minotusa.com/uploads/40/NorthDakotaIntermodalInitiati...
- gen220 6y ago
  The shipping container was the self driving truck of the 20th century. That one invention eventually put so many people out of work, it’s difficult to fathom. We live in Brooklyn near the water. The entire coastline from Red Hook to Greenpoint was once dedicated to the loading, unloading, and storage of pre-shipping container cargo. This industry employed many thousands of people. It was a dangerous job but it sustained families, and it was a bootstrap to a career in the shipping industry. (There are analogies in textiles and meatpacking, in this same city). Now, the warehouses have been converted into housing, coffee shops, art centers, and the like. The working class job is the service industry (waiting, serving coffee, delivering food), and it’s a very different culture from the working class job of the 60s. I’m not at all saying the technological innovation was a bad thing. But it did have a huge impact on the local economies of every seaport in the world (Bay Area included, for those that live there). If you’re interested in learning more, there’s an 8-part audio documentary on shipping containers. You can listen to episode 7 about automation here: https://soundcloud.app.goo.gl/AfzxGaUKuceh4W9W7 https://soundcloud.app.goo.gl/AfzxGaUKuceh4W9W7
- 6y ago

novia 6y ago

Not only that, but the war on drugs was started in 1971 as well.

deleted 6y ago
[deleted]

chmod600 6y ago

I'm curious about the mechanism. It seems important, but can you elaborate on the effects?

tobmlt 6y ago
If you are curious for the theory behind this mechanism, a good source is “what has government done to our money“ by Murray Rothbard. It’s freely available here: https://mises.org/library/what-has-government-done-our-money https://mises.org/library/what-has-government-done-our-money
flurben 6y ago
The mechanism for U.S. currency creation and management is constantly evolving, and its effects are as well. Effectively what we're talking about are central bank operations, which is a dry and boring subject within economics, that is both misunderstood by mainstream economists and misused (for political reasons) by heterodox economists (many of whom are charlatans). Generally speaking though, everyone tends to agree that central bank policies became looser over the 20th century, and IMHO that's really the only relevant kernel of truth in the OP link, who seems to be a promoter of fringe economic theories. The best place to read about the topic is at the Federal Reserve Bank's website. Alternatively, I would recommend reading any of this : https://orcamgroup.com/understanding-money/ https://orcamgroup.com/understanding-money/

xyst 6y ago

Random thought: since the US dollar hasn't been backed by a physical asset in decades, does it really make sense to prosecute a person(s) for "stealing money." Stealing implies you have taken something of value and requisitioned it for ones self, but since money has no actual value was it really stolen? Especially in the digital age, the numbers you see in your bank account are just 0s and 1s sitting dormant in some server farm.

mark-r 6y ago
As long as you can still buy things of real value using money, the money itself has value.
jeffasinger 6y ago
If dollars have no value, you should be willing to give away any dollars you have to anyone, no matter how they are using them, right? Dollars don't have a direct value in gold, but there are people willing to take your dollars and exchange them for gold, it's just a ratio that varies over time, along with the value of gold and dollars.
zeroxfe 6y ago
> since money has no actual value Ah, the intrinsic value debate (which your entire argument hinges on) never gets old. Setting that debate aside, money has market value -- it's not backed by gold, but it's backed by the power of the government, by the trust of the citizens, and by very strong social expectations. A storekeeper is more likely to accept your money than your gold.
- 35fbe7d3d5b9 6y ago
  This holds true not just of a storekeeper in the US, but in many other countries as well. The US invested a great deal of both soft & hard power ensuring this is the state of the world.
ploika 6y ago
US dollars clearly do have value though. It's foolish to claim otherwise.