The American Empire in a Changing World


Monday, August 13, 2012

''We’re Spectators To Europe’s Show''

From Wall Street Pit

''Back in the 1970s, we led the transition away from the Bretton Woods system of fixed exchange rates that were pegged to the U.S. dollar, which was then exchangeable by foreign governments for gold at the official rate of $35 an ounce. It was an economically brutal decade that included two oil price shocks, chronic inflation and a sharp U.S. recession in 1974-75. But the new system of floating developed-nation exchange rates allowed vast quantities of “petrodollars” to be recycled through the global banking system, fueling economic growth that then raised living standards for millions in Latin America and elsewhere. It also set up the system that brought China out of its economic and political isolation and fostered an enormous expansion of global trade.''

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