1970s & OPEC Revisited
Welcome To The 1970s
Welcome Back, a theme those old enough to remember is associated with Kotter and his students. For those who are a little older, it is reminiscent of the 1970s, inadequate and abysmal decision making by Fed Chairmen Burns and Miller, planned detrimental actions by OPEC, and our la ck of reaction to the stagflation it created. Shame, shame, we know your name.
This was the effect of OPEC and it was not good; inflation surged, the United States entered into a recession. We were controlled by OPEC; as titled “were back” with OPEC now being controlled by other world powers; the Chinese.
The recession ended; stagflation became the watchword. The worst was over, or so they thought. GDP surged but inflation, a by product of lowering rates and higher gas prices remained in charge. The stage was set for the next two years. Growth could not be maintained.
Miller replaced Burns and at least had the gumption to raise rates but not enough. The Carter administration, seeking to be reelected, put a good foot forward as the inflation rate simply would not drop.
Voelker took over from Burns in August 1979 and despite increases in interest rates inflation continued to ramp; it was time for a presidential change; one where actions to bring down inflation, once and for all took center stage.
I’ll save further dissertation about Voelker and the coordinated actions of Reagan and Treasury Secretary Regan for another time, perhaps when Powell wages a successful and long ranging battle emulating how Voelker acted. Given that will take years, I will probably draft something sooner.
The real reason for today’s article revolves around OPEC, how it is now influenced by the Chinese why their target is a change is the world currency from Dollars to Yuans. The handwriting is on the wall as spoken of in my War With No Bullets post.
We’re is uncertain times based upon actions, or inaction was have taken over the last several decades.
Hope you enjoyed this post. I’m just a young 68 years old; my Dad became a broker when I was 13. It’s time for me to ‘give back’ to all of you what’s in my head. It’s not always pretty but it’s based on history . . . and history, unchecked, repeats itself.
Everyone learns at their own pace. If you pick everything up the first time through, great but if not email me at dzimmer@substack.com so we can further help.
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Gabe Kaplan deserves a mention here through the theme song to his hit television show “Welcome Back Kotter” . . . welcome back to the 1970s; OPEC is back.