Nixon shock and the rise of America
America (the United States of America) is a superpower in the world. It is not the nuclear bombing of Japan at the end of World War II (1945) that gave America the superpower status. The main player is the "Nixon Shock."
On August 15, 1971, President Richard M Nixon announced his new economic policy, a program known colloquially as the “Nixon Shock,” the initiative marked the beginning of the end for the Bretton Woods system of fixed exchange rates established at the end of World War II.
Under the Bretton Woods system, the external values of foreign currencies were fixed in relation to the U.S. dollar, whose value was in turn expressed in gold at the congressionally-set price of $35 per ounce. By the 1960s, a surplus of U.S. dollars caused by foreign aid, military spending, and foreign investment threatened this system, as the United States did not have enough gold to cover the volume of dollars in worldwide circulation at the rate of $35 per ounce; as a result, the dollar was overvalued.
The Bretton Woods Agreement revolved around on the external values of foreign currencies. Fixed exchange of the U.S. dollar, the value of foreign currencies was expressed in gold at a price determined by Congress.
Nixon policies killed the Bretton Woods Agreement and terminated gold as a form of global exchange.
The Day Gold Died, US dollar raised to be a global currency. A new era of Forex born. The US prints as many dollars as it wants without stacking gold in relative terms.
In 1996, economist Paul Krugman, Nobel prize winner, said, "The current world monetary system assigns no special role to gold; indeed, the Federal Reserve is not obliged to tie the dollar to anything. It can print as much or as little money as it deems appropriate."
Nixon announced temporary wage and price controls, allowed the dollar to float against other currencies, and ended the convertibility of the dollar into gold.
Nixon shock saved the US economy. It created a new world order. America became an economic superpower. Every other country on earth counts their money in terms of the US dollar. World trades is impossible today without US dollar. One country's economic stability depends on the dollar it owns in terms of forex reserves.
The rest of the world became a slave to the US dollar. America benefited from Nixon shock.
That was the 20th century. A new world order is happening; it is somehow gaining momentum. The de-dollarization of the world economy.
Time will say who will take the lead. A new history will be created for the future. That will shape the 21st-century world economy.
The US is strong as long as the dollar is strong. The death of the US dollar is the death of economic superpower of America.
The biggest loser is the European economy. The US may survive some odds, but it can't be a superpower again.
Donald Trump is trying to hold the superpower status of the US. Time will tell how he is going to succeed.
On August 15, 1971, President Richard M Nixon announced his new economic policy, a program known colloquially as the “Nixon Shock,” the initiative marked the beginning of the end for the Bretton Woods system of fixed exchange rates established at the end of World War II.
Under the Bretton Woods system, the external values of foreign currencies were fixed in relation to the U.S. dollar, whose value was in turn expressed in gold at the congressionally-set price of $35 per ounce. By the 1960s, a surplus of U.S. dollars caused by foreign aid, military spending, and foreign investment threatened this system, as the United States did not have enough gold to cover the volume of dollars in worldwide circulation at the rate of $35 per ounce; as a result, the dollar was overvalued.
The Bretton Woods Agreement revolved around on the external values of foreign currencies. Fixed exchange of the U.S. dollar, the value of foreign currencies was expressed in gold at a price determined by Congress.
Nixon policies killed the Bretton Woods Agreement and terminated gold as a form of global exchange.
The Day Gold Died, US dollar raised to be a global currency. A new era of Forex born. The US prints as many dollars as it wants without stacking gold in relative terms.
In 1996, economist Paul Krugman, Nobel prize winner, said, "The current world monetary system assigns no special role to gold; indeed, the Federal Reserve is not obliged to tie the dollar to anything. It can print as much or as little money as it deems appropriate."
Nixon announced temporary wage and price controls, allowed the dollar to float against other currencies, and ended the convertibility of the dollar into gold.
Nixon shock saved the US economy. It created a new world order. America became an economic superpower. Every other country on earth counts their money in terms of the US dollar. World trades is impossible today without US dollar. One country's economic stability depends on the dollar it owns in terms of forex reserves.
The rest of the world became a slave to the US dollar. America benefited from Nixon shock.
That was the 20th century. A new world order is happening; it is somehow gaining momentum. The de-dollarization of the world economy.
Time will say who will take the lead. A new history will be created for the future. That will shape the 21st-century world economy.
The US is strong as long as the dollar is strong. The death of the US dollar is the death of economic superpower of America.
The biggest loser is the European economy. The US may survive some odds, but it can't be a superpower again.
Donald Trump is trying to hold the superpower status of the US. Time will tell how he is going to succeed.
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