laughing dog
Contributor
A growing economy need more money. Under commodity money (a gold standard) that requires more gold. A country can only acquire more gold in 3 ways: trade products and services with other countries for gold, mine more gold or convert gold from jewelry and other uses into money. When the world economies are growing, the only method for having more gold is to mine it from the ground. That means that countries with unmined gold have control over the world's supply of money when the world economy is growing,Makes no difference who has the gold in the ground, it is who has the gold in their central banks. Having physical gold became so strategic and important that in 1971, Nixon was forced by France to default on original bretton woods terms. And had he not defaulted when he did, all gold saved in the US would be gone now. I think I agree with this. We do disagree whether pro-cyclical is bad. I believe capitalism requires cycles of boom or bust in order to be efficient, so the weak badly managed firms go out of business The dead wood has to be cleared out in such a way that wage employees are protected though. but the dead wood has to be cleared out or many zombies will hurt the economy as a whole.
Moreover, your economic history is mistaken. France did not force Nixon to go off the gold standard. He had the option of devaluing the dollar. But he recognized, as did almost every economically literate person, that the gold standard was not sustainable.
Implicit in your argument is the false notion of "true market value". There is no such thing as "artificial" policy of any type.Market value of many assets have been drastically warped by artificial fed policy. Asset prices (such as homes in California) are bubbled completely out of wack because low interest causes competition from lower wage earners who should not be in the market. The price to earning ratio of the stock market is telling us the same thing with those assets as well.
I am sorry, but that sounds very much like paranoia to mEconomic power and wealth is extremely important. As the CCP becomes wealthy and powerful they are able to control and influence the US government with bribes and corruption. They also are buying up Hollywood with the purpose to sway our population towards their ideology. Eventually the US will become a colony of the CCP just as we were a colony of Britain before our independence.
Sure it has - most of the civilized world has recovered from the devastation of World War 2. It was easy for the US to run trade surpluses when the productive capacity of most of its competitors had been destroyed. It took Europe about 20 years to rebuild.]But our trade surplus has vastly changed since 1971.
An interesting historical study of the growth and decline of the influence of the "great powers" is Paul Kennedy's The Rise and Fall of the Great Powers". I recommend it - it is well written and very informative. Any summary will not do it justice, but basically his thesis is that all "great" Western powers fell due to over-extension of their military dominion.


