Re:WTF Happened in 1971? (2019)
by runeks on Tuesday November 24, 2020 @05:59AM
(#25197327)
> Some do blame the loss of the gold standard, but the leading theory is the OPEC oil crisis.
The latter is a consequence of the former. The US defaulting on its gold obligation is equivalent to trading oil in exchange for paper rather than gold. Of course the OPEC countries were reluctant to sell their oil for irredeemable pieces of paper rather than something redeemable in gold.
Talking about the “oil price” as one thing before and after 1971 doesn’t even make sense, as the US gold default constituted a change in the unit of measurement for USD-denominated prices (gold versus irredeemable paper notes).
The latter is a consequence of the former. The US defaulting on its gold obligation is equivalent to trading oil in exchange for paper rather than gold. Of course the OPEC countries were reluctant to sell their oil for irredeemable pieces of paper rather than something redeemable in gold.
Talking about the “oil price” as one thing before and after 1971 doesn’t even make sense, as the US gold default constituted a change in the unit of measurement for USD-denominated prices (gold versus irredeemable paper notes).