Hi Ray, I think you do have a good point that the 1967 Mid east war, and then the ongoing hostilities that
went on culminated with the 1973 Yom Kippur War, created an incentive for the Arab countries to press the
OPEC cartel advantage, for all it was worth. In fact, I've been reading Walter Isaacson's Book "Kissenger, a
Biography" It's a tremendously well researched book that deals with his entire life, and I'm just getting to the
period of the early 1970's now.
It seems many of the Key issues then such as working with China, dealing with currency turmoil, and maneuvering
around a dicey, explosive Mid east situation are still policy concerns that are front and center, for the US and
the World to deal with.
I don't know that a Gold standard is essential for a sound currency, but the US and rest of the world did have
the worst economic times since the Depression of the 1930's, during the 1973-1974 recession and the very
bleak times of 1979-1982.
If this subsequent 18 year expansion in the US financial assets Turns out to be a blow-off top of the proportions
that some are indicating (and also considering what the Japanese have been able to with there bubble of the
1980's) We may be back to the drawing board in 5 or 8 years, looking for answers.
Has our 30 year experiment with floating rate currencies enabled us to build bigger and better financial bubbles,
I don't know. It's too early to tell.
I'm not sold on the idea that we are going to have a 10 or 20 year malaise that mirrors, or is worse than Japan's
experience of the 1990's. But I'm not going to say it categorically can not happen. If it does not rank as at least
a possible outcome, that would be the bubble mentality talking.
John |
