Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
On the other hand, David Graeber in Debt: the First 5000 years does set 1971 (Nixon abandons the gold standard) as the start of something new.

The abandonment of the Bretton Woods system is a consequence as much as it is a cause of the changes: The combination of Lower 48 Peak Oil, the recovery of the German and Japanese industrial plants and unprofitable colonial engagements in Indochina conspired to turn the US from a structural CA surplus country into a structural CA deficit country. This in turn forced the US to abandon the Bretton Woods system, since the BW system requires the structural CA surplus country or countries to recycle their surpluses into capital investment in the deficit countries. And the new CA surplus countries lacked the institutional capabilities, geopolitical incentives and occasionally, as we have seen in the German case, sufficient grasp of the economics of international trade to take on that role.

The following forty years of European exchange rate policy can be seen without great loss of generality as an attempt to recreate the BW system without the realisation (let alone the political will) by the incumbent surplus countries to recycle their surpluses into productive investments.

That these attempts have collapsed three times in four decades should not, in retrospect, have been a major surprise.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Mon Dec 19th, 2011 at 10:33:29 AM EST
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