Quick note on a ‘golden jubilee’.
50 years ago today the US president Nixon unilaterally removed gold from the centre of the world monetary system – replacing it with US Treasury bills.
Chinese General Qiao Liang said the ‘Nixon Shock’ it was THE crucial event of the 20th Century – more important that the two world wars and the collapse of the Soviet Union.
These charts (from WTF Happened In 1971?) make clear the ruinous effects of August 15th 1971 for America’s economy and financial system.
The US dollar-based global currency system is failing … How fast is anyone’s guess.
Internationally – today – we see signs of accelerated decline in the US withdrawal from defeat in Afghanistan.
Military defeat in Afghanistan marked the end of the Soviet empire.
Just as an outsized military bankrupted the USSR, a similar process could be underway here.
Without military support, there is less pressure on the world’s producers to use the US dollar for trade and investment. Without the dollar as world reserve currency, the US cannot afford its vast military.
It won’t much matter for the estimated 360,000 who died since America invaded in 2001 (or for those who will suffer under the Taliban), but this looks like a major milestone on the way to a post-dollar world.
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