February 19

Ep. 0052: A History of the US Dollar Part 5: Ticking Timebomb of the Petrodollar

Finally, we conclude our non-consecutive series on the history of the history of the US dollar with part 5, looking at the story of the dollar following the breakdown of the Bretton Woods system.  (This podcast was actually recorded over the course of 2 commutes — the first half in the morning commute to work, and the second one in the afternoon commute home.)

Join Prof CJ as he discusses:

  • How the ending the ‘gold window’ in 1972 led to high inflation, which led to negative consequences (including some not purely economic) for society
  • The approaches of the Ford and Carter administrations to dealing with inflation
  • How, under first Carter and then Reagan, Federal Reserve Chairman Paul Volcker (appointed in 1979) used high interest rates to staunch (though not completely stop) the erosion of the US dollar’s value in the early-1980s
  • The reasons that the dollar still (mostly) operates as the world reserve currency despite its obvious flaws and vulnerabilities, including the meaning of the term ‘petrodollar’
  • How things will go wrong, sooner or later, with this system, and how the remedy used previously by Volcker (high interest rates) could not realistically be used today by the Fed, even if they wanted to do so
  • A few thoughts on ways to prepare for this eventuality

Links to Previous Episodes in this Series:

(“Business Graph with Dollar Stock Photo” courtesy jscreationzs at freedigitalphotos.net)

External Links

Prof CJ’s Picks (buy from Amazon via these links to help support the show at no additional cost to you)



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Posted February 19, 2015 by profcj in category "American History", "Economic History", "Podcasts

1 COMMENTS :

  1. By profcj (Post author) on

    All the books listed in the Amazon affiliate links for this episode and for episode 34 (which was part 4 of the series) influenced my presentation in one way or another, so any of them are worth checking out if you really want a big picture (including lots of things I didn’t cover, of course.)

    Probably the most important overall in influencing how I framed the story, and in giving me some good data, was Robert Samuelson’s The Great Inflation and Its Aftermath.

    One other source that informed a lot of this episode & the last one, and that I didn’t include in the Amazon links for either show, is Ch. 19 of the book Reassessing the Presidency. The chapter, entitled “From Kennedy’s New Economics to Nixon’s New Economic Policy:Monetary Inflation and the March of Economic Fascism” was written by Joseph Salerno; the book is edited by John Denson. It’s a great book.

    Reply

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