Time for a new Bretton Woods system
On August 15th 1971 President Richard Nixon addressed the nation on a new economic policy. Given its relevance today it is worth spending 18 minutes watching it in full. As outlined the measures undertaken were temporary in nature. All attempts to reform the Bretton Woods system failed and within 2 years it was replaced by our current free floating fiat currencies regime. While it brought a close to the Bretton Woods system the global institutions created under the 1944 Bretton Woods agreement remained in place. This chain of events shaped much of the world we find ourselves living in today.
Last weeks internal IMF report marked the latest in a growing list of damning reports on global institutional failures. The 2008 financial crisis marked the end of an era for the Bretton Woods institutions which are no longer relevant in a multi polar world. The World Bank, IMF, central banks and the multitude of organisations they have spawned are now frantically trying to change the narrative. After pursuing a number of failed monetary experiments over the last 8 years they are now publicly talking about rethinking their orthodoxy for a new economic era.
On the 45th anniversary of the Nixon Shock the Dow, Nasdaq and S&P 500 closed at all times high. Global markets have become completely distorted by central bank actions. It is time for a new Bretton Woods system to herald a shift towards a new prosperity for humanity. Money creation for the pursuit of growth and accumulation of wealth is a thing of the past. While a lot of energy has gone into resisting the status quo those immune to elephant and stake syndrome (aka TINA) have been quietly working away on alternatives whose time has come. And that is something I very much welcome.