"The post–World War II economic expansion, also known as the postwar economic boom, the long boom, and the Golden Age of Capitalism, was a period of economic prosperity in the mid-20th century, which occurred mainly inwestern countries following the end of World War II in 1945, and lasted until the early 1970s. It ended with the collapse of the Bretton Woods system in 1971, the1973 oil crisis, and the 1973–1974 stock market crash, which led to the 1970s recession."
Economic recovery from the Great Depression and of WWII, a period in which demand for goods and services exploded, many social changes took place. Women filled the labor gap during the war and many happily returned to homemaking while many others remained in the paid labor force but at unequal pay. Race issues began to explode as returning African- and -Asian American military personnel returned home no longer willing to put up with segregation and Jim Crow laws. 1968 Was a dreadful year with riots, sit-ins, marches and protesters of all varieties joining in resistance to unfair laws, policing, and economic segregation.
By 1971, the "Nixon Shock", the unlinking of money from gold, meant money was printed based on nothing. When USA needed money, it was printed. The consequence is volatility.
The Bretton Woods Agreement, a system of monetary management created the rules for commercial and financial relations among the world's major industrial states. In 1971, the USA unilaterally terminated convertibility of dollar to gold, thus ending the Bretton Woods Agreement. Officially, the $ became "fiat currency", backed by nothing more than a promise to pay.
What is unclear is how one can fulfill a promise if there is nothing to back it up. Due to excess printed dollars, and negative U.S. trade balance, other nations began demanding fulfillment of America's "promise to pay" – that is, the redemption of their dollars for gold.
These and other major shifts in policy brought the end to the Golden Age of Capitalism and economic decline continues at an accelerated rate.
Yes it absolutely does. Printing money reduces the value of the currency, which means that the value of a country's debt decreases relative to the world market for debt, for example, compared to a debt held in Euros or Riyals.
Reduced the value of your currency does nothing to reduce your external debt (it's in foreign money) or your internal debt, having more money only devalues your ability to pay that debt, which in fact is more like having more debt!
When we pay our loans back we pay them in dollars, when we devalue our currency we devalue the debt. It's really quite simple.
International hypothetical example:
-Canada owes USA dollars to the USA.
-Canada devalues its dollar, the Canadian dollar is worth less than before
-It is now harder for Canada to pay off the debt to the USA.
The debt is not smaller or bigger, but it is harder to pay off. Please consider where in those three points you are going wayward
Domestic hypothetical example:
-Canadian government owes 10 billion to it's citizenry through bonds, etc
-Canadian gov wants more money, prints more money
-Dollar is devalued, debt is still 10 billion
-Gov emits more bonds, raises debt...
In the end, same result
Yup. Thanks John. :-)
I agree Jonathan!
Jonathan, I agree with you. There are other compounding variables that need to be taken into account. Why has there been such a strong rejection of even discussing other political systems? Who benefits by censorship and propaganda? Who pays the price for holding different views. Why are we so afraid of Occupy movements?
How do you check your spell checker?
The citizens may approve of caps on payments to the poor when the rich accept caps on payments to the rich... duh! have you heard of corporate bailouts? why should the poor accept cuts when the rich keep receiving more and more government handouts???
I'd be more than happy to see such a graph, John. Perhaps one that includes the 99th percentile, since that is what is really at issue? Or the 99.9th, as that would really go to the point? Thanks.
Jedi, EXCELLENT graph. It tells a graphic story of current events. It sure says what is happening better than I could ever do.