Honey, I Finished The Gold Standard

16 Replies to “Honey, I Finished The Gold Standard”

1. Around the same time women entered the workforce halving earning income for families adding to the destruction of the middle class and the moral backbone of Western society.

   Now we’re both “woke” and broke. You call this progress?

   1. Women have always worked. The post WWII period where they didn’t is the anomaly. The post WWII period when factory workers became middle class was caused by the fact that the rest of the world was in ruins and we had the resources to rebuild it. Without similar conditions that will not happen again.

2. I have read elsewhere and many years ago that the early 1970s were the time when people where best off. Everyone owned a house and a car and gasoline and food were almost free. The rich do keep getting richer and the poor do keep getting poorer.

   1. I was in high school when, in 1972, as I recall, the then federal minister of energy declared that Canada had a–get this!–400 year supply of oil.

      October 1973, there was a squabble in the Middle East known as the Yom Kippur War, and, almost overnight, we were on the verge of running out.

      Gee, doesn’t that sound familiar?

      1. We still have a 400 year supply of oil and even more coal.

         1. Yes.
            Problem is our Overlords want it for themselves.
            With less useless eaters they can extend that timeline a hundred fold.
            More for them , less for us.

            1. Fewer of us = more for them.

            2. They still have same short human life span.

3. Interesting series of graphs.

   Scroll down to the second last graph and note the growth in physicians versus growth in administrators.

   I’m alway leery of graphs showing percentage changes, but this is ridiculous.

   As the NDP say, ‘more paper pushers!’

4. The period between 1947 and 1981 was characterized by rising interest rates. The rise was gradual at first, but once the last and very tenuous link between gold and the monetary system was broken in 1971, the rate of interest completely lost its moorings and began to soar like a homesick angel.

   In 1981, we reached the point at which no business plan could be justified given the staggering rate of interest, so demand for capital began to fall and so did interest rates.

   Forty years later, we find ourselves at or around zero percent. The lack of a gold standard in the falling cycle means that there is no way to set a floor under the rate of interest. Rates can and will go negative. Imagine the consequences of people being paid to borrow, and savers being outrightly penalized for saving. The nation’s capital stock will be consumed in short order.

5. In my area of Ontario a house which was built in 1972 and priced at $25,000 was selling (yes selling, !!!) for $1.4 million at the start of this year, 2022. This can’t last for long, so a mere $1 million is the going rate for July. Let’s estimate the real (?) price should be about $250,000 which would be a 10 times increase. Has anyone reading this commentary realized a 10 times increase in their wealth ? If you think a candy bar sells for 10 cents or a first class stamp is 5 cents they’re not been out of their bomb shelter for 50 years.

   1. +++Burgess

   2. I did a comparison of house prices in the Windsor, ON neighbourhood (the city population has remained exactly the same since the 1970s) my dad bought our newly built family home in 1974 (CAN$18K) compared to the same type of house in the same neighbourhood in 2020 (CAN$239K asking price in May 2020) based on how many ounces of gold the house price would buy in the respective year. So, in 1974 CAN$18K bought 162 oz of gold. In 2020, CAN$239K bought 99 oz of gold. However, if one uses 1974 CAN$ for comparison–the same house in 2020 would be worth CAN$11K. One can assume that a 46 year old house in stagnant-growth city would not be worth as much as a brand new house.

6. I know nothing about charts and stats and economics, but it seems to be a combination of the loss of the gold standard and the beginning of the exodus of manufacturing from the USA.
   Robotics can make it cost efficient to bring much of the industrial manufacturing back, but with far fewer jobs than before.

7. 1971, PeeAir TurD’Ho was pride minister, and I met my now X wife. thank god for being the X

8. I think that the late 70’s was when the ‘expert’ class, central banks and such began to make their presence felt. T Boone Pickens and George Soros, among others, also began off shoring and currency predation or the rise of globalization.