Triffin’s Dilemma, Reserve Currencies, and Gold

Triffin’s Dilemma, Reserve Currencies, and Gold → aier.org/research/briefs/975 … s-and-gold

Might be of interest to some of you in light of the “currency wars”.

Ka-Poom Theory Update Two – Part I: Bang or a whimper - Eric Janszen → itulip.com/forums/showthread … post227292

How Dangerous Is U.S. Government Debt? → cfr.org/financial-crises/dan … ebt/p22408

en.wikipedia.org/wiki/File:USDebt.png

Why was the debt flat in real terms from 1950 to 1980?

Inflation! Inflation! Inflation!

The debt had been growing all along but the debasement of the dollar (inflation) means it does not show, Jimmy Carter for instance went from 40 billion to 74 billion deficit at the end of his term. Carter also bought in Paul Volker at the end of his term who proceeded to jack up interest rates to curb inflation. 20%+ interest rates will do that, so once they achieved that the debt expansion because more obvious.

Reagan then came into power and let loose three competing factions, monetarists (Beryl Sprinkel), Keynesians from the Nixon era (William Niskanen, Bob Dole, James Baker and George Bush Snr) and supply-siders (Jack Kemp) who all fought to put their ideas forward. The Keynesians and supply-siders formed an alliance and the monetarists soon found themselves out the door. They increased the deficits and the taxes (inflation meant people moved into the higher tax bracket), the period also saw the appointment of yes man Alan Greenspan at the federal reserve and also began a period that continued through the Clinton era where they adjusted the CPI and employment indices to fiddle the statistics.