WTF Happened in 1971? (2019) • Hacker News Board

Re: WTF Happened in 1971? (2019)

#31

Post by djur » Mon, Nov 23, 2020, 4:58 PM UTC

triangleman wrote: post #9

Love the charts, then scroll to the bottom and "oh, Bitcoin". Sorry but there are other ways. Did you know that the Balanced Budget Amendment (proposal) failed by a single vote in 1995?

Yes, we narrowly averted disaster. Did you know that amendment required a supermajority to raise taxes?

Re: WTF Happened in 1971? (2019)

#32

Post by pjc50 » Mon, Nov 23, 2020, 4:58 PM UTC

bobcostas55 wrote: post #26

Nothing, these charts are just the result of picking the wrong deflator. This chart shows what happens when you use the (correct) GDP deflator: https://worthwhile.typepad.com/.a/6a00d83451688169e20134878d...

There's definitely still a divergence, starting in .. 1975?

Re: WTF Happened in 1971? (2019)

#33

Post by beachwood23 » Mon, Nov 23, 2020, 4:58 PM UTC

shortandsweet wrote: post #17

JohnJamesRambo wrote: post #6

“The government held the $35 per ounce price until August 15, 1971, when President Richard Nixon announced that the United States would no longer convert dollars to gold at a fixed value, thus completely abandoning the gold standard.” These graphs are why I invest in Bitcoin. I see so many similarities to assignats and the lead up to the French Revolution, from the wiki- “The economy did poorly in 1790–96 as industri…

How does bitcoin solve this? Last time I checked there's no fixed bitcoin price either. The currency is so volatile on news, it's sagging and spiking all over the place.

You are correct that there is no fixed price. However, you might be assuming that the US Dollar has a fixed price too. The US Dollar is fixed at the price of the US Dollar, which is of course only a relative value.

Likewise, a Bitcoin is worth what a Bitcoin is worth.

The difference between the two, what the OP is pointing out above you, is that Bitcoin currency has a limited supply and so can't be devalued. Relative to each other, a Bitcoin will increase its value to the USD because the supply of the latter is always increasing.

Re: WTF Happened in 1971? (2019)

#34

Post by bluedino » Mon, Nov 23, 2020, 4:58 PM UTC

Would increases in computers and automation have anything to do with it?

And have wages really gone down? As a whole, we're richer than ever. We own more possessions, have bigger houses, spend more money on luxuries, etc.

Re: WTF Happened in 1971? (2019)

#35

Post by beamatronic » Mon, Nov 23, 2020, 4:59 PM UTC

wyldfire wrote: post #22

Some of these graphs are laughable and are candidates for "Spurious Correlations" [1]. Childhood obesity is not due to the US getting rid of the gold standard. [1] http://archive.is/9VFmh

It could be related to the increase in both parents working. No mother at home to provide nutritious meals. And both parents working is due to the already explained economic factors.

Re: WTF Happened in 1971? (2019)

#36

Post by jnwatson » Mon, Nov 23, 2020, 4:59 PM UTC

Finnucane wrote: post #3

I guess that explains the unending poverty and economic decline we've faced for the last 50 years.

It was really that 1940-1969 was the exceptional period in US economic growth. We had war manufacturing that transitioned into the only major world economy unincumbered with getting their factories blown up, fueled with inexpensive fossil-fuel energy, before large-scale automation/IT took hold.

This, plus powerful unions, provided a unique period where real wage growth for the bottom quartile improved.

Re: WTF Happened in 1971? (2019)

#37

Post by coliveira » Mon, Nov 23, 2020, 5:00 PM UTC

The US was forced to stop paying gold for its international debts in 1971, otherwise it would have not enough gold to continue. But this had little consequence because gold was not really the basis in the international currency system since the Breton Woods agreement in which the US forced everyone in the capitalist world to use the dollar as the basis for currency transaction. The Breton Woods agreement was the necessary step for things like the Marshall Plan and the IMF. In summary, the Breton Woods agreement was the piece of financial sorcery used to revive the capitalist world destroyed by WW2.

Re: WTF Happened in 1971? (2019)

#38

Post by wffurr » Mon, Nov 23, 2020, 5:00 PM UTC

It's more like WTF happened between 1945 and 1971. I think that was an ahistorical period of low income inequality, and now we're back to "normal" such as it is.

Re: WTF Happened in 1971? (2019)

#39

Post by matthewbauer » Mon, Nov 23, 2020, 5:00 PM UTC

I don't see how 1971 is significant for any of these graphs. Looks like 1979 is when productivity / compensation really start to diverge. What happened in 1979?

Re: WTF Happened in 1971? (2019)

#40

Post by novia » Mon, Nov 23, 2020, 5:00 PM UTC

ZacharyPitts wrote: post #10

Amazed that the site does not call out Nixon completely abandoning the gold standard in 1971. Financial investments thusly did not need to be backed by actual assets anymore, to the point of today where the whole of money is loans against loans against loans.

Not only that, but the war on drugs was started in 1971 as well.