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The Bretton Wood System Delivered The Post World Prosperity

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Very interesting macro view of the world about how the Bretton wood fixed exchange rate brought stability to all (except US) an delivered the post world boom. Definitely worth a thought considering that we are experiencing currency wars at the moment.

ps: The role of the emerging Asian competitors were not discussed which could also be relevant to the post 1973 changes.

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A very interesting video and well worth more than one view.

Some ideas linked to the video even though not on the exact same theme but nevertheless :)

The1973 step change in unemployment highlighted early in the video was at about the time that the gold standard was dropped and about the time that people born after WW2 (the boomers) started to go into the workplace in increasing numbers (the bulge or the increase in numbers leading to more unemployment does seem to make some sense if only partly for reason of numbers?). The 1973 oil crisis seems neat timing as well seeing as coordinating national groupings can't be easy at the best of times.

The chart of household wealth in terms of gold peaked about 1973 (about the time when the gold standard was dropped) then household wealth in terms of gold dropped suddenly and rapidly before rising again to another higher peak about 2000 (when financial derivatives started to gain a hold and gained momentum everywhere and house prices "surged") and then again dropped suddenly and rapidly.

Economic volatility/shakedown in the developed world after about 1973 might well have helped with the aims of europanisation and globalisation.

1973 was around the time that europanisation gained rapid momentum.

2000 was when globalisation gained rapid momentum.

It appears that since WW2 major financial and political policy changes happened at about 25/30 year intervals.

So on that basis it seems a distinct possibility that around 2025/30 some other policy of financial/political change/consolidation could well happen and it's also perhaps a fairly good possibility that the current economic problems will last at least until around 2025/30. The problems might not be solved by then but some sort of step change policy could well happen round about that sort of time.

Edited by billybong

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Just finished reading "In Cheap We Trust", quite an eye opener in a way for someone without an ecognomics background.

Makes a lot of sense in terms of how we have moved to a borrow it now culture, and combined with Purple Cow and Seth Godins analysis of the end of the TV-Industrial-Complex, really casts a gloomy light on the end game...



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Watching now.

Europe rebuilding after the war appears lost on him.

Although the 73 oil crisis and the US coming off the gold standard.

I think post war was the exception to the rule.

In the real world there are always many factors at work but it looks as though US took the brunt of the adjustment at end of each business cycle until 1970s. So, basically when there is a boom abroad, dollar flies out and US had to hike rate/contract credit to slow this down and gets the dollar back into US.

With that, rest of the world could avoid having recessions - of course that was a time where US was like 30%-40% of the global economy.

In UK term, I wonder if London could bear the adjustments so the rest of the country don't have to as opposed to the other way round ???

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  • 242 Brexit, House prices and Summer 2020

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      • down 5% +
      • down 2.5%
      • Even
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      • up 5%

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