British Finance ｜ Western economic crisis and gold price (US dollar chapter ‧ middle)

In the sharing of this issue, British Finance will answer three questions: how is the ingrained stagnation? What is the mysteries behind the central bank's policy errors? Why does Walker use extreme means to fight inflation? Based on the main points of historical materials, help novice old friends to further improve their ability.

Senior gold investors also understand: "Investment gold is a crisis in the US dollar", from the 1970s to the first term of Ren in the 1980s, it is believed to be an important mileage of one of the US dollar crisis in history. However, due to the market's nostalgia for the Bretton Forest system, and no another economic system that could threaten the United States at that time, it also provided a life -saving rope and panting space for the US dollar crisis. Lack of regrets.

Since the 1970s, the market will also doubt the credibility of the US dollar at any time, always pay attention to the changes of the US dollar, and continue to find assets that can replace the US dollar to avoid the risk of a sharp depreciation of the US dollar. Among them, gold is definitely an ideal choice. From The central banks of various countries can understand the holding of gold. In the new series of sharing, British Finance allows investors to learn more effective asset allocation through the history of the US dollar crisis, and master how to use the weak cycle of the US dollar to rely on the risk of depreciation of the US dollar to the US dollar!

Based on the ancient and present, it can be seen that the development of the same event in history has different opportunities, but how to affect market emotions and decision makers has the opportunity to be close. This is important to study historical materials. However, the materials on the development of gold and the development of the US dollar are not complete. If it is not complicated, it is not simple and not systematic, or it is not storytelling but lack of practicality. Commentary, insufficient help to investors. The author has more than 10 years of research on financial history. This series of articles is based on historical facts and practical co -use as the goal. I hope to use historical materials to help novice and old friends to further enhance their capabilities.

Advanced Financial Finance: The author is often asked by some novices: "Why are the market paying attention to the US dollar?" The author will start from the history of the Bretton Forest system, to the development of oil dollar and the development of the central bank, combined with economic figures for quantitative comparison comparison Explain how the US dollar step by step has become the world's most important trade and base currency.

However, if you know the importance of the US dollar, you need to understand the process of the development of the US dollar hegemony in the next step. A series of historical facts, political logic, and central bank strategies behind them. These experiences have the opportunity to influence so far. This is why investors need to pay attention.

Under the crisis of the US dollar in the 1970s, the price of gold was 10 times!

In the 1970s, the US dollar was an important watershed. In addition to entering the floating exchange rate from a fixed exchange rate, the US dollar also changed from representative to "purchasing American products" to "trading medium of monopoly major commodities". For the U.S. trade surplus country, the trade surplus purchase U.S. Treasury bonds to promote the US dollar in various countries.

US dollar index (blue/left label), gold price (green/right standard) (1971 to 1984)

From the chart, it can be seen that from 1971 to 1975, it was the weaker cycle of the dollar. During the termination of the Bretton Forest system and the shrinkage of trade revenue and expenditure, the price was gradually increased. From 1975 to 1977, the US dollar benefited from the help of petroleum dollars, and the price of gold slowed down. However, with the risk of oil crisis and stagflation in the later 1970s, the US dollar crisis was fermented again, and the price of gold also rose sharply again.

In fact, the gold price of this stage from 1971 to 74 has not yet really reflected the market conditions, because at that time, the United States still restricted private sale of gold. Until August 8, 1974, Nixon announced his resignation. On August 14, the new president Ford signed "Gold The Act "Act" only allows the US nationals to buy and sell and have gold in private. In the same year, COMEX also launched gold futures contracts.

Introduction to British Financial Advanced Tips: From Nixon's governance, you can also see a strong Monroeism, that is, actively use diplomatic means to fight for benefits for the United States, and intentionally and strategically, with the help of diplomatic management of international business, and developing the forces to the development to the forces to the forces to the development to the forces to the influence to the forces to the influence to the forces to the influence to the forces to the forces to the influence to the forces to the influence to the forces to the influence to the forces to the influence to the forces to the influence to the forces to In the area outside the Americas, the success of Nixon has greatly affected the decisions of US presidents in foreign policy, especially in Liegen and Trump, and maintaining the status of the US dollar with diplomatic means has always been a popular market. issue.

The background of the US dollar crisis in the dim year

In the 1970s, the United States faced issues such as Vietnam War, energy crisis, inflation pressure, economic recession, racial problems, rebellion cultural shocks. Coupled with the instability of the political situation at that time, some people described the "dim era" at the time. At that time, the US trade surplus gradually narrowed or even contracted. British and French crowded gold accelerated the gold loss of the U.S. Treasury. In 1971, Nick announced the suspension of gold exchanges. In disguise, the Bretton Forest Agreement was concluded. This was the first stage of the worsening of the US dollar at that time, and the beginning of the golden bull market in the 1970s.

(If you are interested in knowing more, you can refer to "British Finance: Western Economic Crisis and Gold Price (10)! Golden Bulls during the Great Depression? : Western economic crisis and gold prices (USD ‧ above)! History of US dollar hegemony? The US dollar crisis under gold, the conspiracy behind the US dollar? ")

In order to stimulate the weak economy in the 1970s, in 1971, Nixon chose to dismiss the Bretton Forest Agreement. On the one hand, the US dollar depreciated and re -stimulated exports. Essence However, many historical materials also refer to this series of operations for the 1972 election. In order to implement more economic stimulus solutions, Nixon also publicly forced the then Federal Reserve Chairman Berns to adopt a loose monetary policy. Advanced Financial Finance: Under the fundamental factors of the United States, the administrative policies of the governors often have a significant impact on the US dollar and the financial market, especially in the mid -term selection and election period. As investors, it is not possible to ignore.

In order to allow readers to feel the economic situation at that time, Britain compiled the important economic data of the time, so that readers can further understand the economic situation before and after the US dollar crisis:

US trade shrinkage fell to the US dollar and the US economy

Trade revenue and expenditure balances Germany (Blue/Left Black) and the United States (dotted line/right ash) (1970 to 1980)

The US trade surplus gradually narrowed or even contracted mainly because of the post -war recovery of Germany and Japan. The economic stimulus under the low exchange rate of the Bretton Forest Agreement, and the industrial innovation gradually surpassed the United States at that time. In addition, there were emerging markets and four Asia. The intensified competition of cheap labor such as Xiaolong, as well as the aging of the United States at that time, caused a decline in export competitiveness and lost market share.

Advanced Financial Finance: From the US dollar crisis in the 1970s, we can understand why American governors' dedication to trade control, because the balance of trade revenue and expenditure is one of the lifeblood of the US dollar and the US economy.

Employment issues forced the Federal Reserve to adopt a loose policy

Beauty unemployment (blue / left) and US government liabilities (deficiency / right) (1965 to 1980)

It can be seen from the unemployment rate that the U.S. economic issue has significantly emerged in 1970. As the US dollar lost its competitive advantage in the later stage of the Bretton Forest Agreement, the United States lost its international market trade share, and at the same time, labor positions gradually lost, and the unemployment rate rose.

The two major responsibilities of the Federal Reserve are to solve employment problems and keep prices stable. However, in the 1970s, the Federal Reserve Chairman Berns said in the US Congress hearing that the Federal Reserve's loss of structural positions can be used. However, due to the pressure of the election year, Nixon forced the Federal Reserve to adopt a loose monetary policy to stimulate the economy.

Introduction to British Financial Advanced Tips: The central bank's monetary policy is not a universal. For example, the epidemic is made of a supply chain, and the concept of staying at home to promote consumption, and geopolitics, to supply inflation and demand inflation pressure. Very limited. If the governor does not take the right medicine, obvious economic problems will only ferment.

Federal Reserve's ruling and government liabilities increasing trigger stagflation

American inflation (blue / left standard) and the central bank interest rate (dotted line / right) (1973 to 1980)

Due to the depreciation of the US dollar in 1971, oil production countries began to appreciate oil prices in 73 years, bringing pressure on inflation. At the same time, the depreciation of the US dollar and the increasing liabilities of the US government have also caused currency to depreciate inflation pressure.

Bernus term from 1970 to 1978. The market has a more negative evaluation of Bernes of Keynes believers, mainly because Burns has adopted a loose monetary policy during the Federal Reserve Chairman, and it has not hit inflation. At that time, the governor at that time cooperated with the political interests of the central bank's policy to make the deep -rooted inflation problem in the 1970s.

During the early administration of Berns, Nixon implemented price restrictions in response to inflation, but this violation of market mechanism measures, if the government did not reduce liabilities or the central bank's interest rate policy did not cooperate, inflation will naturally react through the price other than restrictions. And become a market psychological consensus. In 1978, Bernus left his office, and the successor Miller raised the federal interest rate in a short time, but did not have a significant effect, further exacerbating the market to adapt to high inflation.

As the market continues to rise into consensus on inflation, it naturally becomes inflation spiral, and the power that needs to be paid to suppress inflation needs to be enlarged. Only by effectively cracking down on the market psychology, it can achieve results. This is why Walke, who took over in 79 years to take an aggressive interest rate hike.

Advanced Financial Finance: The independence of the Federal Reserve is not certain. In the end, it is necessary to depend on the political philosophy of the governor and the morality of the owner. When the Fed becomes part of the political policy, it is often more realistic to evaluate the future market environment with political purposes.

Examples about the central bank's governance for the interests of governors are not uncommon. How the Bank of Japan in the 1980s created a bubble economy is a modern classic example.

Geopolitics becomes a black swan in the US economy decline

International oil price (1970 to 1980)

After the fourth Middle East war broke out in 1973, the influence of the oil group gradually expanded. In addition, the US dollar signed a valuation agreement with the oil group in 1975 to allow the appreciation of oil prices to consolidate the market demand of the US dollar.

However, at the end of the 1970s, the Iranian revolution broke out, Iran exported oil interruption, and a new round of oil crisis broke out, which pushed the price of oil and caused a new round of stagnation crisis and economic recession. A new round of crisis also broke out.

Democratic Party President Carter took over the regime in 1976. After taking office's honeymoon period, he immediately faced a series of economic recession pressures. In fact, Carter also had a series of reforms at the time, while promoting economic stimulus plans. U.S. government liabilities have also increased sharply, but they were eventually dragged down by the Iranian revolution and lost the president's throne. Advanced Financial Finance: The impact of high oil prices on the economy affects the development of the economic cycle. Often, high oil prices exacerbate the risk of economic recession, which will help gold prices. However, after the economic recession broke out, it is often stressed that after the economic recession broke out, and the economic recovery brought pressure to the price of gold.

Hunter Brothers monopolized silver

In 1971, the Bretton Forest system disintegrated. In 1974, the United States re -allowed the purchase and selling gold. In 1976, the Yaocai Agreement was implemented. The foreign exchange market and the commodity futures market subsequently became a popular investment target at that time. At that time, many U.S. rich people also invested in the commodity futures market and used the regulatory gap at the time to profit and control market circulation. The Hunter brothers from the Petroleum Family Family continued to buy silver in the late 1970s to control market prices with the help of family wealth.

During 1979, Hunter brothers once held 53%of the New York Commodity Exchange and 69%of the silver futures contracts of the Chicago Trading Commission. It was to make a profit, and it was a hit, and through the liquidation, this was the reason behind the US dollar crisis and economic recession at the time, and the price of gold and silver pushed the gold price to the peak.

Although the price of gold and silver has repeatedly reached high, the Hunter brothers had had funding pressure at that time. At the same time, the price of gold and silver has risen sharply, attracting eye -catching gold and silver ore production and government reduction of arbitrage. In addition, the exchanges intend to suppress the fried wind and chaos, and increase the level of margin. Inflation, the implementation of Walker's impact on borrowing, and the reason for the failure of the Hunter brothers' monopoly silver market, which also caused the pressure of gold prices at that time after the rise was high.

Introduction to British Financial Advanced Tips: Often, in the latter stage of the commercial bull market, the price of gold will also be affected by the stir -fry. When this stage is entered, the rising or falling of gold prices is mainly due to market emotions and funds. Not the most important link. And market greed and fear is the core.

After the disintegration of the Bretton Forest system and the establishment of the oil dollar system, in addition to reflecting economic operations, the US dollar trend is even more reflected in the policy concept of the owner of the White House and the decision -making of the Federal Reserve deacon at that time. In the future, Britain will discuss the story of the President Reagan and the Federal Reserve legend Greenpan, the story of the US dollar and gold price, and hope that our sharing can help everyone.

Gold and silver's value preservation capacity has received long historical support. Therefore, whenever the financial market has a crisis or unstable geopolitical situation, the recognition of the local currency or capital market will have the opportunity to decline, and the decline in currency purchasing power will have a chance to trigger inflation and inflation and inflation and inflation and the decline in currency. In order to fight inflation, investors will sell local currency or assets in order to fight inflation. Instead, they will hold gold and silver. With the support of risk aversion, anti -inflation, and investment and speculation, gold and silver prices will be further supported. The influence of the central bank is not to be ignored. This is why investing in gold and silver needs to pay attention to changes in the central bank's policy.

British financial trainer Wayne Lai Share: After reading history to check the performance of the past gold prices, it can further enhance the understanding of international finance and politics. Although the same incident or low -character opportunities appear again, the human nature and decision logic of modern deacons can be possible. Finding clues through history, and in the process of seeking truth, you need to have diversified thinking. It is necessary to rule out false information. At the same time, it is a training logical thinking and analytical ability. It is very helpful for friends who are interested in financial or commercial decisions.

The author (right) and former Federal Reserve Chairman Greenspan (middle) and product expert Jeffrey Christian (left) exchange photos

Disclaimer: The content of this article is for reference only, and does not constitute an offer, suggestion or promoting anyone to submit or subscribe for any securities. Structural products can rise or fall sharply, and investors may suffer a full loss. Past performance does not reflect future performance. Before investing, investors should understand risks and consult professional consultants and consult relevant listing documents. Any content in this article does not constitute investment, law, accounting or tax opinions, and there is no statement that any investment or strategy is suitable or in line with individual situations.

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