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I am of the understanding that a balance of payments always sums to 0, and that the sentence should thus be changed to read current account deficit. I'm no economist though, so seeking a second opinion. Smazza ( talk) 14:30, 2 January 2012 (UTC)
The article mentions "The return to a gold standard is supported by many followers of the Austrian School, Objectivists, libertarians,[7] largely because they object to the role of the elected government in issuing fiat currency through central banks."
The source does not provide the kind of evidence that would justify mentioning "many followers" of the very broad schools of Objectivism (an ethical philosophy with economic implications that are not at all necessarily supportive of the gold standard) and Libertarianism (a political philosophy based on personal freedoms and a free market economic system of capitalism, not gold standards).
If an adequate citation can be presented that suggests a sizable portion of either of these schools (in an international sense, not only reflecting the nature of specifically American adherents) advocates the gold standard and that it is relevant to the central concepts of their philosophies, then I think they should be added in. Until then I think it's best the article not list them.
-- 96.231.134.137 ( talk) 12:20, 2 September 2011 (UTC)
The gold standard and not fiat is a central tenet of libertarians. Google Ron Paul or whomever you wish. — Preceding unsigned comment added by 74.240.255.227 ( talk) 03:57, 13 October 2011 (UTC)
Does anyone know how this effected the economy at the time? Chuy1530 ( talk) 18:09, 24 June 2008 (UTC)
Hell, its hurting the economy now. I think someone should expand the criticism section to include why it hurts the economy today. ron paul had a very good comment on the nixon shock if i only could find it... — Preceding unsigned comment added by 69.246.119.186 ( talk) 22:36, 10 December 2011 (UTC)
The opening paragraph end by saying that the phrase "Nixon Shock" is also used to describe Nixon's visit to China (in addition to the economic policy). This isn't mentioned at all in the rest of the article, and Google is none the wiser. I'm sure it was a shock; but was it the Nixon Shock? - Ashley Pomeroy ( talk) 11:49, 8 October 2008 (UTC)
"By the early 1970s, as the Vietnam War accelerated inflation", war doesn't cause inflation. Printing more money causes the existing money to inflate, lowering the value of all the currency. This statement doesn't seem correct. Packetdrop ( talk) 00:38, 12 November 2008 (UTC)
–I won't pretend to be an authority, but there are certainly many other means by which inflation increases beyond the printing of physical currency. In this instance the US involvement in Vietnam required the Federal Government to spend money on the war effort (produce arms and other supplies, pay wages, etc). War is expensive so the Government engages in deficit spending. This means more capital is injected into the market, devaluing the dollar, and increasing inflation. Emancipated ( talk) 08:01, 18 February 2009 (UTC)
Why is Shock capitalized? Where did the name "Nixon Shock" come from? Mike R ( talk) 18:54, 31 October 2009 (UTC)
This whole article is based on pseudo economics such as the Austrian School. Wikipedia is an encyclopedia and we cannot use pseudo sciences and studies to back up arguments. The Austrian School does not us mathematical tools of analysis, does not believe in many of the core precepts of economics and is based on broad assumptions. It is therefore akin to a belief. I suggest that we delete large part of this page and stick to the historical narrative. Leave the economics to the Economic History of the United States or the Economic History of the 20th Century. —Preceding unsigned comment added by 65.24.133.184 ( talk) 23:03, 20 February 2010 (UTC)
I guess by Pseudo Economics, you mean economic ideas that actually have predictive value, a capital theory (which other schools lack), an explanation of the boom, and actually predicted the very event that this Wikipedia entry is about! Not to mention that it is the oldest school of economic thought still in existence. See the book "will Dollars Save the World" by Austrian School economist Henry Hazlitt. If that's Pseudo Economics, I'll take that over the standard mainstream nonsense any day. —Preceding unsigned comment added by 153.26.241.6 ( talk) 01:13, 16 March 2010 (UTC)
If in doubt, toss the word/words 'pseudo' into the title, and then for extra measure toss in 'pseudo-science' to appeal to a consensus rather than any hard evidence. Your rant has more to do with frustration from your own ignorance concerning Austrian economics (which is nothing more than a commonality toward supply-and-demand economics) and general economics then it does about the article and it's alleged non-objectivity. As an aside-- David Frum is a political journalist, not an economist. I have no idea why this article, based on economic theory, would be scripted from a political journalist's book. TheObserverEffect ( talk) 14:53, 29 April 2011 (UTC)
Nutbags should give a heads up before posting. Never heard anyone call the gold standard pseudo-economics... — Preceding unsigned comment added by 74.240.255.227 ( talk) 03:56, 13 October 2011 (UTC)
The "Later Ramifications" section of this article is terrible. While the argument could be, and admittedly has been, made that the removal of the Bretton-Woods system did indeed have some part in causing the events of 2007-2009, you would be hard pressed to find a significant number of economists willing to make this point. It would be far more appropriate to include it in a section entitled "Criticism," or, better yet, included in the Bretton Woods article rather than here. I've removed it, as I feel uncomfortable with the current near factual status accorded to it by its position, feel free to revert and fix it if you think anything can be salvaged. (Aeon221, posting from hotel without logging in) 12.50.196.130 ( talk) 04:29, 6 June 2010 (UTC)
I'm not debating that this is indeed a minority opinion among a certain kind of economist -- I won't go into why I think this has more to do with a specific political viewpoint, and how that viewpoint tends to ignore the many tangible benefits that arose from the removal of the Bretton-Woods system, as much of that is probably covered on the Bretton-Woods page. I do, however, contest the inclusion of this minority viewpoint on a low traffic page where the majority viewpoint is not given similar billing.
If the section were rewritten to indicate that this is but one of many theories as to the cause of the recent crisis, that if it were a cause, it would only be a minor one, and that much of the material for that claim is from an extremely limited (and, in the opinion of another, much larger group of economists, theoretically suspect) number of sources, I'd be much happier.
However, I'm still of the opinion that the better solution would be for this section to be removed, and for it to instead include a blurb saying "According to some economists, the removal of the Bretton-Woods system was one of many precipitating elements in the Financial Crisis of 2007-2009," with a link to these higher traffic pages where a more complete summary of both sides could be provided. To put it plainly, there's no reason for a debate of monetary theory -- as complex a subject as you can find in economics -- to be occurring on a page concerned with a non-standard historical term. Especially when it's a biased portrayal of the debate! (Aeon221, posting from coffee shop without logging in, including this to make it clearer that both different IPs are the same person) 174.49.194.90 ( talk) 16:41, 6 June 2010 (UTC)
McNally is certainly a legit source, but as the section is written right now he's the only source. I just came across this article and until more sources are added, we should probably avoid weasel words like "analysts" and make sure that McNally is pretty much the only source we have here so far. —Preceding
unsigned comment added by
75.109.251.83 (
talk)
23:25, 9 June 2010 (UTC)
Though I think that the focus on sources is great, this misses that the argument about ramifications is inferential, not theoretical. One could probably find scholarly papers on the effectiveness of using horoscopes to predict market outcomes, but that hardly makes this kind of work worthy of mention. The reason why the closing of the gold window is relevant to today's recession is that it allowed the US fed to print much more money than it previously could. The article itself indicates this when recalling that earlier attempts at overprinting were halted by demands for convertibility -- this is what precipitated the shock after all. Furthermore, it is quite universally accepted that the present recession was brought on by sustained ease of credit and investment into unprofitable enterprise, heavy leveraging, etc. The root cause of these is, undisputedly, easy money from the fed. The link is not some hypothesis, it is equivalent to saying that flooding is caused by an excess of water. Too much money now, and a decision made in the 70s to allow the printing of virtually unlimited amounts of it. One does not need to cite sources to make such an obvious connection. And the section title is horrible, it should be something like "Controversy" or "Criticism"
173.34.55.254 (
talk)
04:25, 8 July 2010 (UTC)
I've recently been irritated by this section of the article as well. Listen, if your going to extensively quote a Marxist scholar using materialistic dialectic, you should either 1) type that David McNally is a Marxist scholar of the New Socialist Group (something to the effect "According to Marxist scholar") or 2) add other fringe views of economists. I'm not partial to 2) because then we would have to include the views of goldbugs, anarcho-capitalists, Objectivists, Austrian school economists, freshwater/Chicago school economists, saltwater economists, the history of why the US didn't go off the gold standard sooner, what various ecnomists of history thought of the gold standard, who in the various political discourses throughout the world look at the end of the gold standard as the end of civilization (a group I thought was limited to goldbugs and Austrian schoolers). The problem with this is it is beyond the scope of this article as a whole. Just about every major economy is off the gold standard now and is using a fiat currency. For "Later Ramifications", maybe just link to "fiat currencies" where this debate could properly take place. As of now, it sounds like David McNally is expressing mainstream economic/political thought, when I cannot think of an academic economist (even in the Chicago school) who believes this. It's fundamentally misleading to the reader. My suggestion: Either rename this section "Controversy" and point out this is Marxist thinking or just delete the section entirely. —Preceding unsigned comment added by 209.2.222.241 ( talk) 14:21, 20 July 2010 (UTC)
In May 1971, inflation-wary West Germany was the first member country to leave the Bretton Woods system — unwilling to deflate the Deutsche Mark to prop up the dollar.[1] In order to prevent the dumping of the Deutsche Mark on the open market, West Germany did not consult with the international monetary community before making the change. In the next three months, West Germany’s move strengthened their economy; simultaneously, the dollar dropped 7.5% against the Deutsche Mark.[1]
I am not an expert, but there seems to be some contradiction (or unclarity?) in these two sentences. Was Germany afraid of deflation (of the Deutschmark) or inflation? Did leaving Bretton Woods result in deflation or inflation? Perhaps someone who understands this could either clarify in the article or just leave a message here pointing out to me why this is correct as written (if you would be so kind)? —Preceding unsigned comment added by 82.12.240.77 ( talk) 10:04, 31 October 2010 (UTC)
The article claims that "In 1971, the U.S. government again printed more dollars (a 10% increase)[1] and then sent them overseas, to pay for the nation's military spending and private investments." To my knowledge, the federal reserve is prohibited from printing money and sending it directly the treasury, and almost all money that's printed is simply loaned out via banks (the current quantitative easing being an exception). It's directly sourced to the David Frum book that almost everything in the article seems to point towards, but I ctr-f'd the book and searched for "print" and "printed", and nothing validating this claim came up. Does anyone have any more valid sources for this? If not, I'm going to delete it. 98.95.154.85 ( talk) 18:51, 16 June 2011 (UTC)
Why is only this viewpoint presented? Why aren't other competing analyses presented? — Preceding unsigned comment added by 64.223.88.93 ( talk) 03:37, 29 May 2012 (UTC)
Is this really on topic here? The article is about the event in 1971. Krugman's statement is a general defense of fiat and discussion of floating currencies. Maybe this should be deleted. SPECIFICO talk 23:45, 22 February 2013 (UTC)
The events of 1971 and 1997 may be inextricably linked, but I doubt it! Fotoguzzi ( talk) 01:54, 5 April 2013 (UTC)
Volunteer Marek called the terms "costless dollars" and "forcing other countries to accept them" as "POV nonsense" [2]. Well, in the Bretton Wood System accepting US dollars as payment for good was mandatory for the signatories of the agreement, not optional... And costless dollars is a indirect quotation: "it costs only a few cents to produce $100, but other countries had to pony up $100 dollars of actual goods and services in order to obtain one." [3] You can disagree with the wordings, and I'm not opposed to cosmetic changes. But these are facts, not "pov-nonsense"... Blaue Max ( talk) 01:25, 9 December 2014 (UTC)
The article jumps right into the fact that the United States had a mismatch between the gold it had and the dollars that existed without explaining that it printed more money than it had in gold. Hackwrench ( talk) 05:41, 14 August 2015 (UTC)
Citation 1 gives the 1958 figure for Bretton-Woods. The [Marshall Plan] was in 1948 and not part of citation 2, but this Wikipedia article actually tones down citation 2's claims that Bretton Woods, to which is added system, worked "perfectly" "For the first years after World War II". The article substitutes appeared for seemed, and was unclear as to the start and duration of this. Hackwrench ( talk) 01:28, 6 September 2015 (UTC). Also, the Marshall plan was Europe only, Japan could not participate. Hackwrench ( talk) 05:29, 7 September 2015 (UTC)
In "Background" section: "Countries now settled their international accounts in dollars that could be converted to gold at a fixed exchange rate of $35 per ounce, which was redeemable by the U.S. government. Thus, the United States was committed to backing every dollar overseas with gold. Other currencies were fixed to the dollar, and the dollar was pegged to gold." A fixed exchange rate is not a peg. I could see no way to fix this other than deleting the final phrase. But I am uncertain whether it is true that "other currencies were fixed to the dollar" or whether they were pegged to the dollar, so someone with more knowledge than I needs to look at this. Baon ( talk) 16:44, 4 December 2017 (UTC) I found a very clear indication on the Wiki page titled "the History of the United States Dollar that the result of Bretton Woods was that other currencies were pegged to the dollar (not "fixed") so I went ahead and made the change. Baon ( talk) 21:30, 4 December 2017 (UTC)
Why is there no paragraph calling what the US did in 1971 as the biggest ever known sovereign default in the history of capitalism? There is a lot of literature and economists out there calling it with what this was. Can we please get more transparency even if it hurts to certain POV pushers? 217.68.187.29 ( talk) 21:42, 14 January 2018 (UTC)
Quoting from the article: "and monetary inflation by the Federal Reserve caused the dollar to become increasingly overvalued in the 1960s". How can increasing the supply of a currency cause it to be overvalued? 206.72.58.57 ( talk) 02:21, 13 May 2019 (UTC)