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The end of the US dollar international convertibility to gold did not happen until August 15, 1971. It is also exactly the year inflation took off like a rocke
by jazzyk 9y ago
The end of the US dollar international convertibility to gold did not happen until August 15, 1971.
It is also exactly the year inflation took off like a rocket - see the "Cumulative Inflation" graph. And the standard of living for the middle class (at least in the US) began to stagnate (up to this day).
https://inflationdata.com/Inflation/Inflation/Cumulative_Inflation_by_Decade.asp https://inflationdata.com/Inflation/Inflation/Cumulative_Inf...
- caseydurfee 9y agoInflation also took off like a rocket in Switzerland in the early 1970's: https://tradingeconomics.com/switzerland/inflation-cpi https://tradingeconomics.com/switzerland/inflation-cpi Switzerland was on the gold standard until 1999. Since abandoning the gold standard, inflation in Switzerland has been minimal. Clearly abandoning the gold standard does not necessarily lead to inflation. You haven't even shown a correlation here, much less causation.
- jazzyk 9y agoLack of gold standard is not sufficient for inflation - you also need reckless monetary/fiscal government policies (abundant in the US, taking full advantage of the dollar being the reserve currency) I was not trying to prove causation. There appears to be correlation, but obviously other factors (like government spending) are at play
- pjc50 9y agoThe end of convertibility didn't occur in a vaccum though: it was a response to a whole bunch of exogenous causes, including oil price shocks.