The "Nixon shock" remembered 50 years on | September 2021

 

 

 

Fifty years ago President Nixon took the US off the gold standard, ushering in a new era of monetary policy. This has helped the US economy through the pandemic but may come with a sting in its tail.

Once President Nixon had abandoned the gold standard, the US could expand its money supply without being constrained by its holdings of bullion. This made it easier to issue debt to finance growth.

This ability has been important in supporting the economy during the pandemic. Unprecedented monetary stimulus saw the pandemic-led recession last just two months, the shortest ever, but as financial markets grow increasingly dependent on the waves of central bank liquidity, there may be aftershocks as it is withdrawn.

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This episode was recorded on 31/08/2021

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Podcast information:

The Pulse from Smith & Williamson

Investment Show: The "Nixon shock" remembered 50 years on

Episode 24

Broadcast on Smith & Williamson at 09:00, 31st of August 2021

Available online from 10:00 on the same day.

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