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stretched out and had few options in response to demands by the French for payment in Gold, and the West German removal from Breton Woods.
President Wilson signing the Federal Reserve Act in 1913. the iPod, stealth,
satellites, and most
importantly, the internet •
Society: Roughly 2 Billion
people on the planet compared to today’s 6.7 Billion. Hitler was coming to power.
• Health: Life expectancy of the
average American (male and female) was 59, compared to today’s 76. Since 1980, there has been a greater than 30% decrease in deaths due to Stroke in Heart Disease, presumably due to advances in medicine.
•
exist, markets were not electronic and real-time, and credit cards didn’t exist, nor did check cashing and instantaneous international payment.
You wouldn’t drive an automobile made in 1933 unless you are an antique collector. Most people wouldn’t drive a car that’s more than 10 years old.
Painting by Wilbur G. Kurtz Sr
Most users wouldn’t use a computer that’s more than 5 years old. Banks are using state of the art supercomputers to run a 75 year old system – with origins over 200 years old. In fact, the leading banking computer is the mainframe system IBM System Z, originally developed as System/390 in 1964. While the Federal Reserve Act was enacted in 1913, its origins of design are much older, as the bankers who designed the Fed were influenced by the European system, dominated by the British Bank of England, originally established in 1694.
Finance: The derivative didn’t History of Forex
How many people know why Forex exists at all? Tey know about the “Nixon Shock”, but why did Nixon float the dollar, who suggested it, and how does that
impact modern
Forex? Te simplest solution being the most likely would indicate the US Administration was politically
According to the Wikipedia entry, “by the early 1970s, as the costs of the Vietnam War and increased domestic spending accelerated inflation, the U.S. was running a balance of payments deficit and a trade deficit, the first in the 20th century. Te year 1970 was the crucial turning point, which, because of foreign arbitrage of the U.S. dollar, caused governmental gold coverage of the paper dollar to decline 33%, from 55% to 22%. Tat, in the view of Neoclassical Economists and the Austrian School, represented the point where holders of the U.S. dollar lost faith in the U.S. government’s ability to cut its budget and trade deficits.
In 1971, the U.S. government again printed more dollars (a 10% increase) and then sent them overseas, to pay for the nation’s military spending and private investments. In the first six months of 1971, $22 billion dollars in assets leſt the U.S. In May 1971, inflation-wary West Germany was the first member country to leave the Bretton Woods system — unwilling to deflate the deutsche mark to prop up the dollar. In order to prevent the dumping of the deutsche mark on the open market, West Germany did not consult with the international monetary community before making the change. In the next three months, West Germany’s move strengthened their economy; simultaneously, the
FX TRADER MAGAZINE April - June 2012 33
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