New World Order Is Coming, Maybe in Helicopters

New World Order Is Coming, Maybe in Helicopters

It is 75 years since the developed world signed up for a new version of the gold standard at Bretton Woods, and almost 50 years since that peg to gold was abandoned.. Since then, the world has muddled through with a system anchored to the oil price, and relying on faith in central banks.. With the tie to gold gone, oil producers needed to hike prices to keep their buying power constant.. In dollar terms, oil suffered two immense shocks during the 1970s, which plunged the world into stagflation.. This 'Oil Standard' era ended in the early 1980s, at a point when markets - and everyone else - had lost faith in the ability of central banks to control inflation.. Bond markets signaled that inflation in the U.S. would average less than 0% over ten years.. The market has now abandoned that argument as well, finally accepting that bond yields this low only make sense if a drawn-out deflationary recession lies ahead, which would be terrible for stocks.. If a decade of desperate easy monetary policy by central banks was enough to avert the need to hammer together some new global financial order, markets are now indicating that this moment