11 ms·

WTF Happened in 1971?

117 points by EMIRELADERO 4y ago

PaulHoule 4y ago
Nothing that Bitcoin can fix. Around that time Hunter S. Thompson was writing for a magazine and had just attended an oil industry conference where the attendees were terrified that the United States was about to experience an "oil peak" for domestic production. His editor killed the story because it seemed too alarmist. We know the story now that the whole world economy was reorganized around this event https://www.imf.org/external/about/histend.htm https://www.imf.org/external/about/histend.htm
- car_analogy 4y ago
  > Since the collapse of the Bretton Woods system, IMF members have been free to choose any form of exchange arrangement they wish (except pegging their currency to gold) I had no idea gold-backed currencies were actually forbidden. Seems suspicious - why should the IMF use its vast influence to prevent countries from trying out gold-backed currency? Can such attempts somehow unfairly damage other currencies?
  - PaulHoule 4y ago
    Some people blame WWII on the gold standard. Certainly before the managed Bretton Woods standard the US economy had "the panic of XXXX" every few years. Price stability might have been better but unemployment, investment, and everything else was unsteady.
    - rgovostes 4y ago
      Apologies for being ludicrously off-topic, but the typesetting of your comment on my iPhone created a nearly perfect 7-line typographical river (starting after "blame"), and it seemed a shame to not share: https://imgur.com/0w5rWqI https://imgur.com/0w5rWqI
  - tmn 4y ago
    Of course it’s suspicious. A floating fiat based system is a great tool to enslave the global population. Backing a currency by gold erodes this tool by constraining the ability to grow and manage debt
    - PaulHoule 4y ago
      The American populists thought that the gold standard was a great tool to enslave the American population. Back then it was unthinkable that farmers would be able to invest to say, buy fertilizer: https://en.wikipedia.org/wiki/Cross_of_Gold_speech https://en.wikipedia.org/wiki/Cross_of_Gold_speech The "goldfinger scenario" that goldbugs dream of is the collapse of the global economy which is orders of magnitude too big to be served by the amount of gold we have, they hope that they'll get to live like French aristocrats before the revolution.
      - car_analogy 4y ago
        > Back then it was unthinkable that farmers would be able to invest to say, buy fertilizer This seems very misleading. It wasn't unthinkable in 1969, when the gold standard was still in place. > they hope that they'll get to live like French aristocrats before the revolution. While not a goldbug myself, ascribing base motivations to adherents of some idea is a poor substitute for an argument against the idea itself.
        PaulHoule 4y ago
        Under Breton woods the gold standard was managed in a way quite different from the pre WWII regime.
    - imtringued 4y ago
      What? Having debt in a gold standard is worse because your debt grows every year without your agreement just from the price of gold going up. Inflation is basically a crude continuous debt jubilee which is good for debtors.
  - usednet 4y ago
    Just look at what happened when Gaddafi tried to create a gold backed dinar.
    - herbst 4y ago
      They killed him? (I have actually no idea what happened in between)
  - imtringued 4y ago
    >Can such attempts somehow unfairly damage other currencies? No, in fact a gold standard is so terrible it can't compete against fiat.
- boppo1 4y ago
  Did Thompson's draft ever see the light of day? Would love to read it.
metadat 4y ago
Previous HN discourse: https://news.ycombinator.com/item?id=25188457 https://news.ycombinator.com/item?id=25188457 (2021, 454 comments) https://news.ycombinator.com/item?id=20811004 https://news.ycombinator.com/item?id=20811004 (2019, 44 comments)
marcoloco 4y ago
President Richard Nixon announcing the severing of links between the dollar and gold as part of a broad economic plan on Aug. 15, 1971
- op00to 4y ago
  The 26th amendment to the US constitution was ratified in 1971, giving 18 year olds the right to vote. why not that instead of some obscure monetary change?
  - CyberDildonics 4y ago
    It wasn't an 'obscure monetary change'. It was the defining economic decision of the century.
jleyank 4y ago
Well, the PDP-8E was introduced in 1970 and by 1971 it was probably present in a significant portion of us high schools. This, coupled with commercial time-sharing service access started training the second generation of hackers who are responsible for spreading the MIT spirit and inventing all sorts of things done with computers. This has created a staggering amount of wealth since then, which might be reflected in the wall of charts cited in this article. Probably more wealth in a single segment than the looting of precious metals and gems due to colonization. Edit: games, process control, the follow-on PDP—11 which redid the phone system, and enabled Unix to explode. The need to follow DEC which brought forth the minicomputer business, … Go ahead, explain 44B being spent for Twitter to somebody from 1971.
- PopAlongKid 4y ago
  >, the PDP-8E was introduced in 1970 and by 1971 it was probably present in a significant portion of us high schools. Was there a special program to support a roll-out of this era's PDP-8 boxes to U.S. high schools? Or some other reason how/why this is? (I recall access to a PDP-8I in high school circa the same time).
  - jleyank 4y ago
    It was not staggeringly expensive. Google says 6-7k and I vaguely recall a trustee ponying up 15k so that the (private) school had a computer. Time sharing services were probably a manageable expense. While not cheap it’s way less than “real” computers and tended to be open for the hackers not the staff.
  - deleted 4y ago
    [deleted]
- DrScump 4y ago
  >by 1971 it was probably present in a significant portion of us high schools. That would surprise me. In 1979, right in Silicon Valley, the biggest high school district (East Side Union) had one computer in the entire district, housed at the largest school (Independence). It was a PDP 11/04 (IIRC). Any schools that wanted to offer a BASIC programming class had to rely on Mark Sense cards submitted through daily intra-district courier runs.
rob_c 4y ago
That is a lot of inflection points...
hajile 4y ago
A bunch of things happened. Women entered the workforce in large numbers almost doubling the labor pool across the 1970s. This instantly stagnated wages. Meanwhile, all the things those women were doing at home weren't free, so cost of living also skyrockets. Pretty soon the reasonable "right to work from home" becomes "go to work or go broke" Welfare state kicked off in earnest and corporate taxes were increased to compensate while it was removed from your pay via wages not keeping up with inflation. Related to welfare, 60% of people pay ZERO or NEGATIVE income taxes. Rich people are paying for all those negative taxes and taking it out of YOUR paycheck. Then, because they are paying most of the taxes, they are the people politicians actually listen to. You are outright lied to about inflation. The calculations were changed in 1980 by the incoming Reagan administration to make it look like their policies were more effective than they actually were. CPI indicates that inflation from 2000 to 2020 was right at 50%, but if you look at price comparisons for stuff in 2000 and stuff now, they've generally gone up 100% or more. You can see these shenanigans represented in things like how the wholesale inflation index is currently 2-3% higher than the CPI rate. When your employer says "we're giving you a 2% cost of living because that's the CPI" and real inflation is actually 4%, this adds up over the years. Finally, even after accounting for everything, almost everyone is STILL getting screwed relative to inflation. We as devs think we have "the good life", but we're generally making LESS than median salary adjusted for inflation compared to programmers 30-50 years ago despite being massively more productive.
- zaik 4y ago
  > Rich people are paying for all those negative taxes and taking it out of YOUR paycheck. If somebody is able to get richer by lowering your pay they will eventually do so, taxes or not.
- SahAssar 4y ago
  > Related to welfare, 60% of people pay ZERO or NEGATIVE income taxes Are you against a progressive tax rate?
  - InTheArena 4y ago
    Progressive tax rate implies that taxes actually being paid at some rate. That’s not the case here
rayiner 4y ago
https://en.wikipedia.org/wiki/Nixon_shock https://en.wikipedia.org/wiki/Nixon_shock > The Nixon shock was a series of economic measures undertaken by United States President Richard Nixon in 1971, in response to increasing inflation, the most significant of which were wage and price freezes, surcharges on imports, and the unilateral cancellation of the direct international convertibility of the United States dollar to gold.
Lammy 4y ago
See also: "An Interim Report to the President and the Congress from the Commission on Population Growth and the American Future" (1970). Copy and paste this link or it won't load properly: https://files.eric.ed.gov/fulltext/ED050960.pdf#page=10 https://files.eric.ed.gov/fulltext/ED050960.pdf#page=10 "The time has come to ask what level of population growth is good for the United States. There was a period when rapid growth made better sense as we sought to settle a continent and build a modern industrial Nation. And there was a period, in the 1930's, when a low birth rate was cause for concern. But these are new times and we have to question old assumptions and make new choices based on what population growth means for the Nation today. Despite the pervasive impact of population growth on every facet of American life, the United States has never developed a deliberate policy on the subject. There is a need today for the Nation to consider population growth explicitly and to formulate policy for the future." "The difference [between two-child and three-child American families] is important not simply because of the numbers but because it bears vitally upon a fundamental question about the Nation's future: Do we wish to continue to invest even more of our resources and those of much of the rest of the world in meeting demands for more services, more classrooms, more hospitals, and more housing as population continues to grow?"
CryptoPunk 4y ago
dionian 4y ago
Gold standard dropped
FunnyBadger 4y ago
Well, we went entirely off the gold standard and starting printing money. This was started by FDR but the nail in the coffin was Nixon. https://www.federalreservehistory.org/essays/gold-convertibility-ends https://www.federalreservehistory.org/essays/gold-convertibi... Probably related to this was US domestic Peak Oil was predicted to occur in 1970. Peak Oil merely means that 50% of a finite reserve has been used: there's another 50% still left but production will get more expensive and eratic. That was the year we largely switched to Saudi oil and the Arab Oil Embargo came only 3 years later. Before 1970, the US modulated the US dollar value with increasing or decreasing oil production/exports. In 1970 that strategy ended. Some believe that Saudi Arab and the countries that became OPEC realized they were now in control of the US dollar as reserve currency. Both the Six Day War and the Yom Kippur war combined with Arab nationalism led to flexing this power by OPEC doing the oil control the US had. https://en.wikipedia.org/wiki/Hubbert_peak_theory https://en.wikipedia.org/wiki/Hubbert_peak_theory Here's a data point on the inflation that caused: the in-store menu and prices of McDonald's in 1972. Nothing over $1. https://imgur.com/a/2lubC0D https://imgur.com/a/2lubC0D This is also related to how bread prices never changed FOR CENTURIES until the 20th century with the big rise happening in 1970. A lot of this also came from having no effective industrial competitors after WW2 and then being lazy through the 1950s and then screwing up with a very expensive wars in Korea, Vietnam and other places that were NOT funded by war bonds as in WW2 but were funded with deficit spending with no equivalent back-stop. In the 1950s and 1960s we were still using industrial technologies from the 1920s in terms of fundamentals like steel, aluminum, cars, etc. Germany and Japan had lost all their legacy infrastructure and had the advantage of starting from scratch. Basically a lack of monetary and fiscal self-discipline.
- luxuryballs 4y ago
  Interesting to note that Nixon essentially did nothing more than come clean by making official what the US had already been doing for years, printing money they didn’t have gold for.
- blablabla123 4y ago
  > Well, we went entirely off the gold standard and starting printing money. Germany had a similar dynamic actually speaking about proportionally less money in employees' bank accounts. And the explanation is simple and I think already mentioned, due to the reconstruction efforts after the war the economy expanded a lot and many people could raise their standards of living easily. Surely that couldn't continue until forever. At the same time this paved the way for more hawkish politics both in the US and in Europe. IMHO this doesn't have much to do with decoupling from Gold. I think only the Money supplies M0 and MB were coupled to it but the others M1-M3 which are larger by several orders of magnitude can even be created by commercial banks. The curve of M2 isn't changing much in direction during 1970: https://en.wikipedia.org/wiki/Money_supply#/media/File:CPI_vs_M2_money_supply_increases.png https://en.wikipedia.org/wiki/Money_supply#/media/File:CPI_v...
llamaLord 4y ago
First state to legalise no-fault divorce was in 1969 and in the late 1960's was when birth control was becoming widely available. I suspect a lot of this is to do with the effective doubling of the full-time workforce. To be clear, I'm NOT saying women being able to work full-time is a bad thing. But I DO think that average people have been totally fucked by the transition to 2 person incomes economically. Prior to the 1970's, one middle class partner could bring in enough money to support a family, own a home, pay all the bills etc. Whilst at the same time having one person at home meant cost of living was lower and everyone had SIGNIFICANT amounts more free time. Now, the average middle class family struggles to survive on two incomes and once mum and dad have both completed their 40hrs a week each at work, they both have another 20hrs a week of domestic responsibilities to complete in "their own time" that originally would have been done by the stay at home partner.
- alophawen 4y ago
  A whole lot of other s-t went down that messed up the economy.
- deleted 4y ago
  [deleted]
- confidantlake 4y ago
  This is so strange to me. The workforce doubled, twice as much is being produced. You would think that means the average family would be twice as well off. Instead they have to work twice as long for the exact same amount. This makes no sense at all, until you realize that a tiny percentage at the top took all that extra value.
  - Gigachad 4y ago
    For the exact same amount? The amount of stuff people have today has absolutely exploded. The amount of content, products, quality and sophistication of these products has skyrocketed as well. Things like an overseas holiday was described as once in a lifetime because it would literally only be affordable to do once. Modern computers would be impossible without the boost to the workforce. Peoples expected standards of living has skyrocketed which has kept them working the same amount. And scarce things like land has gone up because you are bidding against other groups who will work two full time jobs.
Threeve303 4y ago
Most of these graphs can be explained by the Nixon shock as other people have mentioned. This also factored into what is considered backing a currency, in this case the global reserve currency. Leading up to the “Nixon shock” there was a decades long move away from direct gold to dollar conversion. The replacement was the petrodollar combined with the move to more of a fiat reserve currency. Then you had a geopolitical struggle over the 1970s with oil producing countries that exists to this day. By 1979, Iran’s revolutipn happened which pushed the U.S. closer to the Saudis, cementing the defense agreement that had been in place for decades, itself mirroring one the British had with the House of Saud. The petrodollar concept underpinned much of the next few decades and we have only begun moving away from it. Since the debate at the end of WW2 that led to Bretton Woods, which currency or the Bancor would handle reserve currency functions, in addition to the petrodollar, the U.S. bond and treasuries specifically have been closely tied to this system. Also during the 70s, you had China begin opening up, then as a way to kind of solve the trifflin dilemma, the U.S. would grow the world economy being an importer, so long as the money found its way back with treasuries and other foreign investments. Japan began playing a bigger role here too and as everyone continued industrualizing and globalizing, the U.S. economy grew along with it because of this system. It was also a great way to sort of export inflation along the way too. A big problem in the 70s that we are seeing again today. So if a big crash is coming, expect another Bretton Woods type agreement first with an attempt to control the strength of the dollar. The difference this time is that there really isn’t another China to bring into this system, and in fact, many foreign countries have looked to avoid using USD all together. Just ask Russia about that. Of course, these are just a few reasons for all of this. There are many factors, like the increase in productivity from computing, and advances in other industries that increased productivity and output. Historically you will see patterns like this, similar ones exist between 1929-1945, 1864-1918, and so on. Unfortunately, everytime this system is challenged, a sort of global reordering, there are economic crashes, and often large wars. We might be seeing another example of this now…
- SahAssar 4y ago
  How does that explain why only medium/lower class incomes have stagnated?
Isamu 4y ago
I didn’t see any discussion of the beginning of globalization, the decline of American manufacturing jobs, the decline of union jobs. The 70s were the beginning of the end for heavy industries in Pittsburgh.
- mdnahas 4y ago
  Agreed. Also, the US was one of a handful of countries not bombed during WWII and had to be very profitable from 1945 to 1960s. We were shipping cars and factory parts everywhere. By the 1970s, that advantage was disappearing.
troon-lover 4y ago
hemreldop 4y ago
SkipperCat 4y ago
Unix epoch was 1970-01-01T00:00:00Z. So basically we can safely say that once Unix was invented, everything went to pieces....
vlark 4y ago
I'd say it was two things: the gold standard was dropped, as many other commentators have already remarked. But Milton Friedman's editorial about the primacy of the shareholder's interest in business decisions -- what has become known as the Friedman Doctrine -- was published in The New York Times in September 1970 and immediately had an impact in the first quarter of 1971 and eventually lead to the rise of 1980s-style venture capitalism and the plundering/asset-stripping of successful companies by private equity firms after sweetheart buy-outs or hostile takeovers that continue to this day. When we place the value of a business purely on the amount of money it can make for the shareholders/stakeholders/owners, all other considerations -- including fair and livable wages, environmental concerns, and even the well-being of the communities in which the businesses are located -- go out the window.
- boppo1 4y ago
  I'm with you, but how do we measure those other things without corporations gaming the measures? ESG is already turning out to be a farce.
trixie_ 4y ago
Yea a lot of the inflation increases across the board are pretty easily attributed to depegging the dollar from $35 an ounce. If that never happened then you could still buy an ounce of gold today for $35 instead of $2,000. The dollar has lost so much value in the last 50 years.. Allowing the government to have control of the currency has allowed them to low key flat tax us with most people not realizing it. Maybe crypto can save us, but it will take probably 1000x the adoption for it to begin to stabilize it.
Maursault 4y ago
The tl;dr of these hn comments: 1) It was women. 2) It was abandoning the Gold Standard The first is absurd on its face, and I will prove it to you with counterexample: ridiculous as it sounds, imagine there were no women, only men, and procreation occurred by some other means, and instead of women entering the workforce in 1971 and toppling the economy, it was just a previous population boom coming to age, a bunch of men, the exact same number of men as there were women in reality, entering the work force. I'm not even going to spell it out, but it should be obvious that women entering the workforce only benefitted the US economy and GDP. The second reason given is more complicated, but it is offered like it is a simple fact, like "duh! It was the gold standard!" But it really is not so simple and I strongly suspect there is a lot of bias. I'm not an MBA, so I'm just going to paste some of the wiki article, only to show that it really is not at all as simple as those claiming such, and I also suspect leaving the Gold Standards is not a boogyman, as some of its advantages are really disadvantages, and some of its disadvantages are somewhat compelling. But my only point here is it is not as simple as that. Advantages According to Michael D. Bordo, the gold standard has three benefits: "its record as a stable nominal anchor; its automaticity; and its role as a credible commitment mechanism." A gold standard does not allow some types of financial repression. Financial repression acts as a mechanism to transfer wealth from creditors to debtors, particularly the governments that practice it. Financial repression is most successful in reducing debt when accompanied by inflation and can be considered a form of taxation. In 1966 Alan Greenspan wrote "Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Long-term price stability has been described as one of the virtues of the gold standard, but historical data shows that the magnitude of short run swings in prices were far higher under the gold standard. Currency crises were less frequent under the gold standard than in periods without the gold standard. However, banking crises were more frequent. The gold standard provides fixed international exchange rates between participating countries and thus reduces uncertainty in international trade. Historically, imbalances between price levels were offset by a balance-of-payment adjustment mechanism called the "price–specie flow mechanism".Gold used to pay for imports reduces the money supply of importing nations, causing deflation, which makes them more competitive, while the importation of gold by net exporters serves to increase their money supply, causing inflation, making them less competitive. Disadvantages The unequal distribution of gold deposits makes the gold standard more advantageous for those countries that produce gold. In 2010 the largest producers of gold, in order, were China, Australia, the U.S., South Africa, and Russia. The country with the largest unmined gold deposits is Australia. Some economists believe that the gold standard acts as a limit on economic growth. According to David Mayer, "As an economy's productive capacity grows, then so should its money supply. Because a gold standard requires that money be backed in the metal, then the scarcity of the metal constrains the ability of the economy to produce more capital and grow." Mainstream economists believe that economic recessions can be largely mitigated by increasing the money supply during economic downturns. A gold standard means that the money supply would be determined by the gold supply and hence monetary policy could no longer be used to stabilize the economy. Although the gold standard brings long-run price stability, it is historically associated with high short-run price volatility. It has been argued by Schwartz, among others, that instability in short-term price levels can lead to financial instability as lenders and borrowers become uncertain about the value of debt. Historically, discoveries of gold and rapid increases in gold production have caused volatility. Deflation punishes debtors. Real debt burdens therefore rise, causing borrowers to cut spending to service their debts or to default. Lenders become wealthier, but may choose to save some of the additional wealth, reducing GDP. The money supply would essentially be determined by the rate of gold production. When gold stocks increase more rapidly than the economy, there is inflation and the reverse is also true. The consensus view is that the gold standard contributed to the severity and length of the Great Depression, as under the gold standard central banks could not expand credit at a fast enough rate to offset deflationary forces. Hamilton contended that the gold standard is susceptible to speculative attacks when a government's financial position appears weak. Conversely, this threat discourages governments from engaging in risky policy (see moral hazard). For example, the U.S. was forced to contract the money supply and raise interest rates in September 1931 to defend the dollar after speculators forced the UK off the gold standard. Devaluing a currency under a gold standard would generally produce sharper changes than the smooth declines seen in fiat currencies, depending on the method of devaluation. Most economists favor a low, positive rate of inflation of around 2%. This reflects fear of deflationary shocks and the belief that active monetary policy can dampen fluctuations in output and unemployment. Inflation gives them room to tighten policy without inducing deflation. A gold standard provides practical constraints against the measures that central banks might otherwise use to respond to economic crises. Creation of new money reduces interest rates and thereby increases demand for new lower cost debt, raising the demand for money. The late emergence of the gold standard may in part have been a consequence of its higher value than other metals, which made it unpractical for most laborers to use in everyday transactions (relative to less valuable silver coins). [1] [1] https://en.wikipedia.org/wiki/Gold_standard#Advantages https://en.wikipedia.org/wiki/Gold_standard#Advantages
dERtuTOR 4y ago
Please take note of the number of graphs that lack a zero on the y-axis[1]. Please explain each graph; otherwise, the wiggly lines are fascinating. Reference: [1] Huff, Darrell. How to Lie with Statistics. Reissue edition. New York: W. W. Norton & Company, 1993.
infradig 4y ago
I blame Glam Rock. Specifically T-Rex's appearance on Top Of The Pops in March of 1971. It was all downhill from there.
- jafo 4y ago
  You might be on to something here...."Who needs TV when I have T-Rex?"
KWxIUElW8Xt0tD9 4y ago
Novus Ordo Missae 1968/1969
dragonwriter 4y ago
Corresponds pretty well to the 1969 Tax Reform Act reducing the drag taxes put on compounding of inequality from differences in labor income (1971 is the first year all the cuts were in effect for the full year, though the cap gains increases, which had less impact on labor-income-driven inequality, weren’t fully phased in.)
mdnahas 4y ago
I’m an economist and have noticed a lot of the trends identified by WTF 1971. But the thing is the date “1971” is not specific in any of the trends. They start somewhere between 1970 and 1990 or so. Also, the gold standard had been abandoned prior to 1971, it was only in 1971 that it could stop being denied by the legal system. My best hypotheses for the origins of the trends are (1) the change to how the US nominates presidents following the 1968 presidential election, (2) the aging of people who went through WWII together and felt a debt to the working-class people who fought the war, or (3) the SAT test, which allows smart working-class children to move into the professional class, rather than having them running unions and working-class social organizations. My best guess is #1. The nominees for higher office are now chosen by popular primaries rather than by the party machine in a “smoke-filled room”. The party machine wasn’t perfect by a long shot, but it nominated qualified centrist candidates who could win the general election. Now, we have a “popular” election where only a small segment of the population votes, It is easier for special interests to influence. (Listen to the “No Compromise” podcast for how they do it.) Theory #1 doesn’t explain everything, but it does explain how the US’s unfair healthcare system can cost almost twice as much as other developed countries and we struggle to fix it. The lack of a gold standard does not.
- adamrezich 4y ago
  > The nominees for higher office are now chosen by popular primaries rather than by the party machine in a “smoke-filled room” for the Republican Party perhaps (assuming you trust the integrity of their primaries)—the Democratic Party (highly ironically, given their name) has a "superdelegates" system that means in practice that the nominees for President are in fact chosen by "the party machine in a 'smoke-filled room'".
- dTal 4y ago
  You're blaming... Jimmy Carter, the first president to be nominated under the new system? What specifically did he do, and why did the trends start before his presidency? Presidents don't change frequently enough, or have enough effect on things, to have such a profound and immediate broad-spectrum impact.
simne 4y ago
Have author checked world birth rate change? You will see, that approx in 1975 was finished trend of exponential grow of world population. Why this is important - from ~1920s, Western countries conduct politics of use Poncy scheme to feed governments budgets and because of rapid grow of population, it was possible to fulfill promises. But in 1970s, with end of exponential grow, this bubble collapses, and now next generations of politics have to work in new world, where they cannot fully avoid to pay for their predecessors claims, but have much more limited resources.
hamstergene 4y ago
For starters, US dollar was taken off gold standard in 1971, which unlocks printing money and the corresponding inflation and unnatural wealth reallocation. There many theories in other comments that essentially boil down to “it was no one’s fault”, but I’d first like to see the data for other countries, particularly those not too interdependent with US.

117 points by EMIRELADERO 4y ago

Nothing that Bitcoin can fix. Around that time Hunter S. Thompson was writing for a magazine and had just attended an oil industry conference where the attendees were terrified that the United States was about to experience an "oil peak" for domestic production. His editor killed the story because it seemed too alarmist. We know the story now that the whole world economy was reorganized around this event https://www.imf.org/external/about/histend.htm https://www.imf.org/external/about/histend.htm

car_analogy 4y ago
> Since the collapse of the Bretton Woods system, IMF members have been free to choose any form of exchange arrangement they wish (except pegging their currency to gold) I had no idea gold-backed currencies were actually forbidden. Seems suspicious - why should the IMF use its vast influence to prevent countries from trying out gold-backed currency? Can such attempts somehow unfairly damage other currencies?
- PaulHoule 4y ago
  Some people blame WWII on the gold standard. Certainly before the managed Bretton Woods standard the US economy had "the panic of XXXX" every few years. Price stability might have been better but unemployment, investment, and everything else was unsteady.
  - rgovostes 4y ago
    Apologies for being ludicrously off-topic, but the typesetting of your comment on my iPhone created a nearly perfect 7-line typographical river (starting after "blame"), and it seemed a shame to not share: https://imgur.com/0w5rWqI https://imgur.com/0w5rWqI
- tmn 4y ago
  Of course it’s suspicious. A floating fiat based system is a great tool to enslave the global population. Backing a currency by gold erodes this tool by constraining the ability to grow and manage debt
  - PaulHoule 4y ago
    The American populists thought that the gold standard was a great tool to enslave the American population. Back then it was unthinkable that farmers would be able to invest to say, buy fertilizer: https://en.wikipedia.org/wiki/Cross_of_Gold_speech https://en.wikipedia.org/wiki/Cross_of_Gold_speech The "goldfinger scenario" that goldbugs dream of is the collapse of the global economy which is orders of magnitude too big to be served by the amount of gold we have, they hope that they'll get to live like French aristocrats before the revolution.
    - car_analogy 4y ago
      > Back then it was unthinkable that farmers would be able to invest to say, buy fertilizer This seems very misleading. It wasn't unthinkable in 1969, when the gold standard was still in place. > they hope that they'll get to live like French aristocrats before the revolution. While not a goldbug myself, ascribing base motivations to adherents of some idea is a poor substitute for an argument against the idea itself.
      - PaulHoule 4y ago
        Under Breton woods the gold standard was managed in a way quite different from the pre WWII regime.
  - imtringued 4y ago
    What? Having debt in a gold standard is worse because your debt grows every year without your agreement just from the price of gold going up. Inflation is basically a crude continuous debt jubilee which is good for debtors.
- usednet 4y ago
  Just look at what happened when Gaddafi tried to create a gold backed dinar.
  - herbst 4y ago
    They killed him? (I have actually no idea what happened in between)
- imtringued 4y ago
  >Can such attempts somehow unfairly damage other currencies? No, in fact a gold standard is so terrible it can't compete against fiat.
boppo1 4y ago
Did Thompson's draft ever see the light of day? Would love to read it.

metadat 4y ago

Previous HN discourse: https://news.ycombinator.com/item?id=25188457 https://news.ycombinator.com/item?id=25188457 (2021, 454 comments) https://news.ycombinator.com/item?id=20811004 https://news.ycombinator.com/item?id=20811004 (2019, 44 comments)

marcoloco 4y ago

President Richard Nixon announcing the severing of links between the dollar and gold as part of a broad economic plan on Aug. 15, 1971

op00to 4y ago
The 26th amendment to the US constitution was ratified in 1971, giving 18 year olds the right to vote. why not that instead of some obscure monetary change?
- CyberDildonics 4y ago
  It wasn't an 'obscure monetary change'. It was the defining economic decision of the century.

jleyank 4y ago

Well, the PDP-8E was introduced in 1970 and by 1971 it was probably present in a significant portion of us high schools. This, coupled with commercial time-sharing service access started training the second generation of hackers who are responsible for spreading the MIT spirit and inventing all sorts of things done with computers. This has created a staggering amount of wealth since then, which might be reflected in the wall of charts cited in this article. Probably more wealth in a single segment than the looting of precious metals and gems due to colonization. Edit: games, process control, the follow-on PDP—11 which redid the phone system, and enabled Unix to explode. The need to follow DEC which brought forth the minicomputer business, … Go ahead, explain 44B being spent for Twitter to somebody from 1971.

PopAlongKid 4y ago
>, the PDP-8E was introduced in 1970 and by 1971 it was probably present in a significant portion of us high schools. Was there a special program to support a roll-out of this era's PDP-8 boxes to U.S. high schools? Or some other reason how/why this is? (I recall access to a PDP-8I in high school circa the same time).
- jleyank 4y ago
  It was not staggeringly expensive. Google says 6-7k and I vaguely recall a trustee ponying up 15k so that the (private) school had a computer. Time sharing services were probably a manageable expense. While not cheap it’s way less than “real” computers and tended to be open for the hackers not the staff.
- deleted 4y ago
  [deleted]
DrScump 4y ago
>by 1971 it was probably present in a significant portion of us high schools. That would surprise me. In 1979, right in Silicon Valley, the biggest high school district (East Side Union) had one computer in the entire district, housed at the largest school (Independence). It was a PDP 11/04 (IIRC). Any schools that wanted to offer a BASIC programming class had to rely on Mark Sense cards submitted through daily intra-district courier runs.

rob_c 4y ago

That is a lot of inflection points...

hajile 4y ago

A bunch of things happened. Women entered the workforce in large numbers almost doubling the labor pool across the 1970s. This instantly stagnated wages. Meanwhile, all the things those women were doing at home weren't free, so cost of living also skyrockets. Pretty soon the reasonable "right to work from home" becomes "go to work or go broke" Welfare state kicked off in earnest and corporate taxes were increased to compensate while it was removed from your pay via wages not keeping up with inflation. Related to welfare, 60% of people pay ZERO or NEGATIVE income taxes. Rich people are paying for all those negative taxes and taking it out of YOUR paycheck. Then, because they are paying most of the taxes, they are the people politicians actually listen to. You are outright lied to about inflation. The calculations were changed in 1980 by the incoming Reagan administration to make it look like their policies were more effective than they actually were. CPI indicates that inflation from 2000 to 2020 was right at 50%, but if you look at price comparisons for stuff in 2000 and stuff now, they've generally gone up 100% or more. You can see these shenanigans represented in things like how the wholesale inflation index is currently 2-3% higher than the CPI rate. When your employer says "we're giving you a 2% cost of living because that's the CPI" and real inflation is actually 4%, this adds up over the years. Finally, even after accounting for everything, almost everyone is STILL getting screwed relative to inflation. We as devs think we have "the good life", but we're generally making LESS than median salary adjusted for inflation compared to programmers 30-50 years ago despite being massively more productive.

zaik 4y ago
> Rich people are paying for all those negative taxes and taking it out of YOUR paycheck. If somebody is able to get richer by lowering your pay they will eventually do so, taxes or not.
SahAssar 4y ago
> Related to welfare, 60% of people pay ZERO or NEGATIVE income taxes Are you against a progressive tax rate?
- InTheArena 4y ago
  Progressive tax rate implies that taxes actually being paid at some rate. That’s not the case here

rayiner 4y ago

https://en.wikipedia.org/wiki/Nixon_shock https://en.wikipedia.org/wiki/Nixon_shock > The Nixon shock was a series of economic measures undertaken by United States President Richard Nixon in 1971, in response to increasing inflation, the most significant of which were wage and price freezes, surcharges on imports, and the unilateral cancellation of the direct international convertibility of the United States dollar to gold.

Lammy 4y ago

See also: "An Interim Report to the President and the Congress from the Commission on Population Growth and the American Future" (1970). Copy and paste this link or it won't load properly: https://files.eric.ed.gov/fulltext/ED050960.pdf#page=10 https://files.eric.ed.gov/fulltext/ED050960.pdf#page=10 "The time has come to ask what level of population growth is good for the United States. There was a period when rapid growth made better sense as we sought to settle a continent and build a modern industrial Nation. And there was a period, in the 1930's, when a low birth rate was cause for concern. But these are new times and we have to question old assumptions and make new choices based on what population growth means for the Nation today. Despite the pervasive impact of population growth on every facet of American life, the United States has never developed a deliberate policy on the subject. There is a need today for the Nation to consider population growth explicitly and to formulate policy for the future." "The difference [between two-child and three-child American families] is important not simply because of the numbers but because it bears vitally upon a fundamental question about the Nation's future: Do we wish to continue to invest even more of our resources and those of much of the rest of the world in meeting demands for more services, more classrooms, more hospitals, and more housing as population continues to grow?"

CryptoPunk 4y ago

dionian 4y ago

Gold standard dropped

FunnyBadger 4y ago

Well, we went entirely off the gold standard and starting printing money. This was started by FDR but the nail in the coffin was Nixon. https://www.federalreservehistory.org/essays/gold-convertibility-ends https://www.federalreservehistory.org/essays/gold-convertibi... Probably related to this was US domestic Peak Oil was predicted to occur in 1970. Peak Oil merely means that 50% of a finite reserve has been used: there's another 50% still left but production will get more expensive and eratic. That was the year we largely switched to Saudi oil and the Arab Oil Embargo came only 3 years later. Before 1970, the US modulated the US dollar value with increasing or decreasing oil production/exports. In 1970 that strategy ended. Some believe that Saudi Arab and the countries that became OPEC realized they were now in control of the US dollar as reserve currency. Both the Six Day War and the Yom Kippur war combined with Arab nationalism led to flexing this power by OPEC doing the oil control the US had. https://en.wikipedia.org/wiki/Hubbert_peak_theory https://en.wikipedia.org/wiki/Hubbert_peak_theory Here's a data point on the inflation that caused: the in-store menu and prices of McDonald's in 1972. Nothing over $1. https://imgur.com/a/2lubC0D https://imgur.com/a/2lubC0D This is also related to how bread prices never changed FOR CENTURIES until the 20th century with the big rise happening in 1970. A lot of this also came from having no effective industrial competitors after WW2 and then being lazy through the 1950s and then screwing up with a very expensive wars in Korea, Vietnam and other places that were NOT funded by war bonds as in WW2 but were funded with deficit spending with no equivalent back-stop. In the 1950s and 1960s we were still using industrial technologies from the 1920s in terms of fundamentals like steel, aluminum, cars, etc. Germany and Japan had lost all their legacy infrastructure and had the advantage of starting from scratch. Basically a lack of monetary and fiscal self-discipline.

luxuryballs 4y ago
Interesting to note that Nixon essentially did nothing more than come clean by making official what the US had already been doing for years, printing money they didn’t have gold for.
blablabla123 4y ago
> Well, we went entirely off the gold standard and starting printing money. Germany had a similar dynamic actually speaking about proportionally less money in employees' bank accounts. And the explanation is simple and I think already mentioned, due to the reconstruction efforts after the war the economy expanded a lot and many people could raise their standards of living easily. Surely that couldn't continue until forever. At the same time this paved the way for more hawkish politics both in the US and in Europe. IMHO this doesn't have much to do with decoupling from Gold. I think only the Money supplies M0 and MB were coupled to it but the others M1-M3 which are larger by several orders of magnitude can even be created by commercial banks. The curve of M2 isn't changing much in direction during 1970: https://en.wikipedia.org/wiki/Money_supply#/media/File:CPI_vs_M2_money_supply_increases.png https://en.wikipedia.org/wiki/Money_supply#/media/File:CPI_v...

llamaLord 4y ago

First state to legalise no-fault divorce was in 1969 and in the late 1960's was when birth control was becoming widely available. I suspect a lot of this is to do with the effective doubling of the full-time workforce. To be clear, I'm NOT saying women being able to work full-time is a bad thing. But I DO think that average people have been totally fucked by the transition to 2 person incomes economically. Prior to the 1970's, one middle class partner could bring in enough money to support a family, own a home, pay all the bills etc. Whilst at the same time having one person at home meant cost of living was lower and everyone had SIGNIFICANT amounts more free time. Now, the average middle class family struggles to survive on two incomes and once mum and dad have both completed their 40hrs a week each at work, they both have another 20hrs a week of domestic responsibilities to complete in "their own time" that originally would have been done by the stay at home partner.

alophawen 4y ago
A whole lot of other s-t went down that messed up the economy.
deleted 4y ago
[deleted]
confidantlake 4y ago
This is so strange to me. The workforce doubled, twice as much is being produced. You would think that means the average family would be twice as well off. Instead they have to work twice as long for the exact same amount. This makes no sense at all, until you realize that a tiny percentage at the top took all that extra value.
- Gigachad 4y ago
  For the exact same amount? The amount of stuff people have today has absolutely exploded. The amount of content, products, quality and sophistication of these products has skyrocketed as well. Things like an overseas holiday was described as once in a lifetime because it would literally only be affordable to do once. Modern computers would be impossible without the boost to the workforce. Peoples expected standards of living has skyrocketed which has kept them working the same amount. And scarce things like land has gone up because you are bidding against other groups who will work two full time jobs.

Threeve303 4y ago

Most of these graphs can be explained by the Nixon shock as other people have mentioned. This also factored into what is considered backing a currency, in this case the global reserve currency. Leading up to the “Nixon shock” there was a decades long move away from direct gold to dollar conversion. The replacement was the petrodollar combined with the move to more of a fiat reserve currency. Then you had a geopolitical struggle over the 1970s with oil producing countries that exists to this day. By 1979, Iran’s revolutipn happened which pushed the U.S. closer to the Saudis, cementing the defense agreement that had been in place for decades, itself mirroring one the British had with the House of Saud. The petrodollar concept underpinned much of the next few decades and we have only begun moving away from it. Since the debate at the end of WW2 that led to Bretton Woods, which currency or the Bancor would handle reserve currency functions, in addition to the petrodollar, the U.S. bond and treasuries specifically have been closely tied to this system. Also during the 70s, you had China begin opening up, then as a way to kind of solve the trifflin dilemma, the U.S. would grow the world economy being an importer, so long as the money found its way back with treasuries and other foreign investments. Japan began playing a bigger role here too and as everyone continued industrualizing and globalizing, the U.S. economy grew along with it because of this system. It was also a great way to sort of export inflation along the way too. A big problem in the 70s that we are seeing again today. So if a big crash is coming, expect another Bretton Woods type agreement first with an attempt to control the strength of the dollar. The difference this time is that there really isn’t another China to bring into this system, and in fact, many foreign countries have looked to avoid using USD all together. Just ask Russia about that. Of course, these are just a few reasons for all of this. There are many factors, like the increase in productivity from computing, and advances in other industries that increased productivity and output. Historically you will see patterns like this, similar ones exist between 1929-1945, 1864-1918, and so on. Unfortunately, everytime this system is challenged, a sort of global reordering, there are economic crashes, and often large wars. We might be seeing another example of this now…

SahAssar 4y ago
How does that explain why only medium/lower class incomes have stagnated?

Isamu 4y ago

I didn’t see any discussion of the beginning of globalization, the decline of American manufacturing jobs, the decline of union jobs. The 70s were the beginning of the end for heavy industries in Pittsburgh.

mdnahas 4y ago
Agreed. Also, the US was one of a handful of countries not bombed during WWII and had to be very profitable from 1945 to 1960s. We were shipping cars and factory parts everywhere. By the 1970s, that advantage was disappearing.

troon-lover 4y ago

hemreldop 4y ago

SkipperCat 4y ago

Unix epoch was 1970-01-01T00:00:00Z. So basically we can safely say that once Unix was invented, everything went to pieces....

vlark 4y ago

I'd say it was two things: the gold standard was dropped, as many other commentators have already remarked. But Milton Friedman's editorial about the primacy of the shareholder's interest in business decisions -- what has become known as the Friedman Doctrine -- was published in The New York Times in September 1970 and immediately had an impact in the first quarter of 1971 and eventually lead to the rise of 1980s-style venture capitalism and the plundering/asset-stripping of successful companies by private equity firms after sweetheart buy-outs or hostile takeovers that continue to this day. When we place the value of a business purely on the amount of money it can make for the shareholders/stakeholders/owners, all other considerations -- including fair and livable wages, environmental concerns, and even the well-being of the communities in which the businesses are located -- go out the window.

boppo1 4y ago
I'm with you, but how do we measure those other things without corporations gaming the measures? ESG is already turning out to be a farce.

trixie_ 4y ago

Yea a lot of the inflation increases across the board are pretty easily attributed to depegging the dollar from $35 an ounce. If that never happened then you could still buy an ounce of gold today for $35 instead of $2,000. The dollar has lost so much value in the last 50 years.. Allowing the government to have control of the currency has allowed them to low key flat tax us with most people not realizing it. Maybe crypto can save us, but it will take probably 1000x the adoption for it to begin to stabilize it.

Maursault 4y ago

The tl;dr of these hn comments: 1) It was women. 2) It was abandoning the Gold Standard The first is absurd on its face, and I will prove it to you with counterexample: ridiculous as it sounds, imagine there were no women, only men, and procreation occurred by some other means, and instead of women entering the workforce in 1971 and toppling the economy, it was just a previous population boom coming to age, a bunch of men, the exact same number of men as there were women in reality, entering the work force. I'm not even going to spell it out, but it should be obvious that women entering the workforce only benefitted the US economy and GDP. The second reason given is more complicated, but it is offered like it is a simple fact, like "duh! It was the gold standard!" But it really is not so simple and I strongly suspect there is a lot of bias. I'm not an MBA, so I'm just going to paste some of the wiki article, only to show that it really is not at all as simple as those claiming such, and I also suspect leaving the Gold Standards is not a boogyman, as some of its advantages are really disadvantages, and some of its disadvantages are somewhat compelling. But my only point here is it is not as simple as that. Advantages According to Michael D. Bordo, the gold standard has three benefits: "its record as a stable nominal anchor; its automaticity; and its role as a credible commitment mechanism." A gold standard does not allow some types of financial repression. Financial repression acts as a mechanism to transfer wealth from creditors to debtors, particularly the governments that practice it. Financial repression is most successful in reducing debt when accompanied by inflation and can be considered a form of taxation. In 1966 Alan Greenspan wrote "Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Long-term price stability has been described as one of the virtues of the gold standard, but historical data shows that the magnitude of short run swings in prices were far higher under the gold standard. Currency crises were less frequent under the gold standard than in periods without the gold standard. However, banking crises were more frequent. The gold standard provides fixed international exchange rates between participating countries and thus reduces uncertainty in international trade. Historically, imbalances between price levels were offset by a balance-of-payment adjustment mechanism called the "price–specie flow mechanism".Gold used to pay for imports reduces the money supply of importing nations, causing deflation, which makes them more competitive, while the importation of gold by net exporters serves to increase their money supply, causing inflation, making them less competitive. Disadvantages The unequal distribution of gold deposits makes the gold standard more advantageous for those countries that produce gold. In 2010 the largest producers of gold, in order, were China, Australia, the U.S., South Africa, and Russia. The country with the largest unmined gold deposits is Australia. Some economists believe that the gold standard acts as a limit on economic growth. According to David Mayer, "As an economy's productive capacity grows, then so should its money supply. Because a gold standard requires that money be backed in the metal, then the scarcity of the metal constrains the ability of the economy to produce more capital and grow." Mainstream economists believe that economic recessions can be largely mitigated by increasing the money supply during economic downturns. A gold standard means that the money supply would be determined by the gold supply and hence monetary policy could no longer be used to stabilize the economy. Although the gold standard brings long-run price stability, it is historically associated with high short-run price volatility. It has been argued by Schwartz, among others, that instability in short-term price levels can lead to financial instability as lenders and borrowers become uncertain about the value of debt. Historically, discoveries of gold and rapid increases in gold production have caused volatility. Deflation punishes debtors. Real debt burdens therefore rise, causing borrowers to cut spending to service their debts or to default. Lenders become wealthier, but may choose to save some of the additional wealth, reducing GDP. The money supply would essentially be determined by the rate of gold production. When gold stocks increase more rapidly than the economy, there is inflation and the reverse is also true. The consensus view is that the gold standard contributed to the severity and length of the Great Depression, as under the gold standard central banks could not expand credit at a fast enough rate to offset deflationary forces. Hamilton contended that the gold standard is susceptible to speculative attacks when a government's financial position appears weak. Conversely, this threat discourages governments from engaging in risky policy (see moral hazard). For example, the U.S. was forced to contract the money supply and raise interest rates in September 1931 to defend the dollar after speculators forced the UK off the gold standard. Devaluing a currency under a gold standard would generally produce sharper changes than the smooth declines seen in fiat currencies, depending on the method of devaluation. Most economists favor a low, positive rate of inflation of around 2%. This reflects fear of deflationary shocks and the belief that active monetary policy can dampen fluctuations in output and unemployment. Inflation gives them room to tighten policy without inducing deflation. A gold standard provides practical constraints against the measures that central banks might otherwise use to respond to economic crises. Creation of new money reduces interest rates and thereby increases demand for new lower cost debt, raising the demand for money. The late emergence of the gold standard may in part have been a consequence of its higher value than other metals, which made it unpractical for most laborers to use in everyday transactions (relative to less valuable silver coins). [1] [1] https://en.wikipedia.org/wiki/Gold_standard#Advantages https://en.wikipedia.org/wiki/Gold_standard#Advantages

dERtuTOR 4y ago

Please take note of the number of graphs that lack a zero on the y-axis[1]. Please explain each graph; otherwise, the wiggly lines are fascinating. Reference: [1] Huff, Darrell. How to Lie with Statistics. Reissue edition. New York: W. W. Norton & Company, 1993.

infradig 4y ago

I blame Glam Rock. Specifically T-Rex's appearance on Top Of The Pops in March of 1971. It was all downhill from there.

jafo 4y ago
You might be on to something here...."Who needs TV when I have T-Rex?"

KWxIUElW8Xt0tD9 4y ago

Novus Ordo Missae 1968/1969

dragonwriter 4y ago

Corresponds pretty well to the 1969 Tax Reform Act reducing the drag taxes put on compounding of inequality from differences in labor income (1971 is the first year all the cuts were in effect for the full year, though the cap gains increases, which had less impact on labor-income-driven inequality, weren’t fully phased in.)

mdnahas 4y ago

I’m an economist and have noticed a lot of the trends identified by WTF 1971. But the thing is the date “1971” is not specific in any of the trends. They start somewhere between 1970 and 1990 or so. Also, the gold standard had been abandoned prior to 1971, it was only in 1971 that it could stop being denied by the legal system. My best hypotheses for the origins of the trends are (1) the change to how the US nominates presidents following the 1968 presidential election, (2) the aging of people who went through WWII together and felt a debt to the working-class people who fought the war, or (3) the SAT test, which allows smart working-class children to move into the professional class, rather than having them running unions and working-class social organizations. My best guess is #1. The nominees for higher office are now chosen by popular primaries rather than by the party machine in a “smoke-filled room”. The party machine wasn’t perfect by a long shot, but it nominated qualified centrist candidates who could win the general election. Now, we have a “popular” election where only a small segment of the population votes, It is easier for special interests to influence. (Listen to the “No Compromise” podcast for how they do it.) Theory #1 doesn’t explain everything, but it does explain how the US’s unfair healthcare system can cost almost twice as much as other developed countries and we struggle to fix it. The lack of a gold standard does not.

adamrezich 4y ago
> The nominees for higher office are now chosen by popular primaries rather than by the party machine in a “smoke-filled room” for the Republican Party perhaps (assuming you trust the integrity of their primaries)—the Democratic Party (highly ironically, given their name) has a "superdelegates" system that means in practice that the nominees for President are in fact chosen by "the party machine in a 'smoke-filled room'".
dTal 4y ago
You're blaming... Jimmy Carter, the first president to be nominated under the new system? What specifically did he do, and why did the trends start before his presidency? Presidents don't change frequently enough, or have enough effect on things, to have such a profound and immediate broad-spectrum impact.

simne 4y ago

Have author checked world birth rate change? You will see, that approx in 1975 was finished trend of exponential grow of world population. Why this is important - from ~1920s, Western countries conduct politics of use Poncy scheme to feed governments budgets and because of rapid grow of population, it was possible to fulfill promises. But in 1970s, with end of exponential grow, this bubble collapses, and now next generations of politics have to work in new world, where they cannot fully avoid to pay for their predecessors claims, but have much more limited resources.

hamstergene 4y ago

For starters, US dollar was taken off gold standard in 1971, which unlocks printing money and the corresponding inflation and unnatural wealth reallocation. There many theories in other comments that essentially boil down to “it was no one’s fault”, but I’d first like to see the data for other countries, particularly those not too interdependent with US.