It is strangely apt that the stock market this week has been experiencing turbulence, in the wake of Standard & Poor’s downgrade of U.S credit and fears of a double-dip recession. After all, this week marks the 40th anniversary of Nixon’s removal of the United States from the last vestiges of the gold standard, an action that ushered in 40 years of fiat monetary instability. For four decades we’ve been in a state of almost constant financial crisis, from the stagflationary ‘70s through the savings and loan debacle and stock market crash of the ‘80s to the more recent dot-com and real estate bubbles and their messy aftermaths.
And now this. After 40 years of a “new normal,” the nations of the West are exhausted and bankrupt. Debt in Europe and the United States is spiraling out of control while economies stagnate, and all central bankers can think of is what they’ve been doing since the Nixon years (and, in truth, a lot longer than that): print more money.
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