Daniel Lacalle Profile picture
Aug 13, 2021 8 tweets 2 min read Read on X
This year marks the 50th anniversary since Nixon suspended the convertibility of the USD into Gold.

This began the era of global fiat money debt-fueled economy.

Since then, crises are more frequent but also shorter and always "solved" by adding more debt and printing.
Since the end of the gold standard, massive debt build and risk-taking have made financial crises more frequent albeit shorter.
The balance sheet of central banks has soared to unimaginable levels, disguising risk but not eliminating it.
Interest rates have been artificially depressed and more countries implement negative rate policies and financial repression measures.
Global debt has reached a record 350% of GDP in times of peace.
The suspension of the gold standard was a catalyst to trigger credit expansion and cement the position of the US dollar as the world's reserve currency that de facto substituted gold as the reserve of the main central banks.
The gold standard was a limit to the monetary and fiscal voracity of the states, and breaking it brought more indebtedness and the perverse incentive of the states to pass on the current imbalances to future generations.
The end of the gold standard. 50 years of monetary insanity.

dlacalle.com/en/the-end-of-…

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Daniel Lacalle

Daniel Lacalle Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @dlacalle_IA

Dec 10, 2021
Spain industrial production down 0.9% yoy in October.

"Robust recovery" Image
Spain added value by sector.

"Robust recovery" according to the government. Image
Spain retail sales.

"Robust recovery" according to the government. Image
Read 6 tweets
Aug 22, 2021
The same people that defend no-growth demand endless public expenditure growth.

Predictions are estimates, not proven facts. Just as economist predictions tend to fail the longer the predicted date, same happens with scientists. Ignoring technology, efficiency and productivity.
Climate alarmism is counterproductive. Generates a backlash against environmental investment and destroys the credibility of otherwise valuable and interesting works.
Most governments do not benefit from technology innovation, energy efficiency, and substitution. Why? Because those are disinflationary factors and they benefit from inflation while creative destruction hurts so-called strategic industries, which they aim to preserve at all cost
Read 4 tweets
Dec 10, 2020
The ECB dangerous bubble in five charts. Thread:

1) Excess Liquidity soars to €3.4 trillion

A problem of solvency is not solved with more liquidity
The most aggressive monetary policy with one of the poorest results:

2) The ECB balance sheet is almost twice the Fed's vs GDP
Massive monetary intervention for diminishing returns:

3) The ECB balance sheet vs Economic Activity. Eurozone Manufacturing and Service Sectors PMI and Eurozone consumer confidence
Read 5 tweets
Jul 28, 2020
The USD is not at risk of losing reserve status.

1) No contender. Use of other currencies is much weaker.
2) The US Dollar is UP vs most emerging currencies.
3) There is no Gold-backed currency out there

Gold is money. Fiat money is credit.

Thread:

1) No contender: Global use of the USD is highest and rising since 2008. Euro has a redenomination risk. Feel free to substitute the USD.
2) The US Dollar is up vs most emerging market currencies.

Other central banks are destroying purchasing power much faster and worse than the Fed.
Read 10 tweets
Mar 19, 2020
The @ecb PEPP program is very different from the previous repurchase programs. It allows the ECB all flexibility and in essence it’s a guarantee for the massive deficits that member states will have (1)
In summary, the @ecb is going to sell euros massively at the same time as the Eurozone trade surplus, that keeps the euro stable, collapses (2)
Risking a massive euro devaluation with economic recession that could lead to years of stagnation, the @ecb bet on a V-shaped recovery is very clear. The eurozone non-euro area export growth has been disappointing and losing market share since the launch of QE. (3)
Read 5 tweets
Sep 27, 2019
Economic freedom is the only guarantee of environmental protection. #ClimateStrikes

(Yale & Columbia Environment Protection Index, Frasier Institute Economic Freedom Index)

Open Thread:
Interventionism and socialism have never protected the environment. They always subsidize the most polluting sectors and raise taxes on citizens with the excuse of the weather.

Heritage

#ClimateStrikes
The most polluting industries are state or semi-state owned or managing state resources in countries where economic openness and freedom is minimal. #ClimateStrikes

(Climate accountability report)
Read 10 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us!

:(