"In broad-brush, the post-World War II era ended around 1970. The legitimate prosperity of 1946-1970 was based on cheap oil controlled by the US and the hegemony of the US Dollar. Everything else was merely decoration."The Original Sin to hard-money advocates was America's abandonment of the gold standard in 1971, but this was the only way to maintain hegemony. Maintaining the reserve currency is tricky, as the nation issuing the reserve currency has to supply the global economy with enough of the currency to grease commerce and stock central bank reserves around the world."As the global economy expanded, the only way the US could send enough Dollars overseas was to run trade deficits, which in a gold standard meant the gold reserves would go to zero as trading partners holding Dollars would exchange the currency for gold."So the choice was: give up the reserve currency and the hegemony of the US Dollar by jacking up the Dollar's value so high that imports would collapse, or accept that hegemony was no longer compatible with the gold standard. It wasn't a difficult decision: who would give up global hegemony, and for what?..."The elites have cannibalized the system so thoroughly that there's nothing left to steal, exploit or cannibalize. The hyper-centralized global money control has run out of rope as the cheap oil is gone, debts have ballooned to the point there is no way they'll ever be paid down, and the only thing staving off collapse is money-printing, which holds the seeds of its own demise."
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Formerly an independent researcher and writer, Brian Maher is managing editor of The Daily Reckoning, the contrarian investment email launched in 1999 and now read by over half-a-million people worldwide each day.
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