
WTF Happened in 1971? - sxp
https://wtfhappenedin1971.com/#1
======
simonblack
When you go off the gold standard and inflation really kicks in (really
though, the money is worth so much less), the NUMBERS go up and everybody
thinks they're doing well.

However, PURCHASING POWER rapidly falls away even as the NUMBERS are
increasing.

The lack of purchasing power in later years is why back in the 50s and 60s, a
factory worker who was the sole breadwinner for the family could afford a
house, car, holidays and other middle-class goodies. To day however, families
need both parents working and just manage to struggle along.

Did you know that you could buy a Rolex Oyster Watch in 1970 for $210? That
same watch today will set you back about $9000-$10000.

Did you realise that $210 in 1970 was the cost of six ounces of gold? Those
same six ounces of gold today is around $11000-$12000.

So the 1970 dollar was worth roughly $52 in today's money, or conversely
today's dollar is worth less than 2 cents in 1970 money.

If you assume a guy in a factory was earning $50 a week back then, that same
factory guy should be earning over $2600 a week now, or over 130 grand a year.

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sxp
[https://wtfhappenedin1971.com/podcast-discussions-in-
order-o...](https://wtfhappenedin1971.com/podcast-discussions-in-order-of-
appearance/) has links to discussions about the graphs.

[https://en.wikipedia.org/wiki/Nixon_shock](https://en.wikipedia.org/wiki/Nixon_shock)
also has more info but fewer graphs.

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aazaa
Let's say the USD/gold devaluation was the cause of everything. What would be
the mechanism to cause stagnation of real wages while real GDP keeps climbing
steadily?

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justinzollars
we went off of the gold standard in 1971.

~~~
elliekelly
And Nixon declared the war on drugs:
[https://en.wikipedia.org/wiki/War_on_drugs#Socio-
economic_ef...](https://en.wikipedia.org/wiki/War_on_drugs#Socio-
economic_effects)

