In the last lesson, we finished learning about the history of central banking in the US. I hope those posts gave you a better understanding of the Fed and how it works. To be honest, VERY few people understand how the Fed works and what they do. Moreover, very few people take the time to understand the last 100 years of modern financial history. So the fact that you know this information puts you in the 1%.
In this post, we will conclude this section of the course by looking at a series of charts that tell a shocking story about the economic health and prosperity of the US after 1971.
So… WTF happened in 1971?!
We’ve looked at some seriously complex topics thus far, so today’s post will be a simple one even if the subject matter could be said to be as complicated as ever.
Below are a series of charts (put together by River Financial), which showcase various economic metrics pre- and post-1971.
In one of the previous posts we learned about the period of Great Inflation in the US, which led President Nixon to close the gold window in November 1971. This eventually led to the collapse of the Bretton Wood System and the ultimate end of the gold standard. If you need a refresher, you can read about it here.
Many people still believe that the world has never been the same since leaving behind the gold standard. The charts below suggest that perhaps this point of view isn’t misguided.
As an astute reader, I want you to tell me which of these lagging indicators was due to the ending of the gold standard. What else happened around this time that could have caused these economic indicators to get more and more dire over time?
Do some research. Do some reading. Do some thinking. And tell me what you discover.
And now, at long last, we are finally ready to move on to the next section of the course! Next up, we will learn all about the cypherpunk movement. Without the cypherpunks, we would not have Bitcoin. So understanding who the cypherpunks were and what they set out to build will help you understand why Bitcoin exists in the fashion it does today.