Back in the 1970s, a decade in which the U.S. introduced to a world on the dollar standard its own version of currency mis-management, “oil shocks” were common. “Oil shocks” are placed in quotes simply because there weren't any during the malaise decade, nor was there booming economic growth. Commodities measured in shrunken dollars surged across the board in the ‘70s, as did an always unreliable GDP print that gave the false illusion of booming growth measured in those same weakened dollars.
Notable is that equity markets revealed an actual, slow-growth truth that commodities and GDP obscured. While the Dow Jones Industrial Average reached a then all-time high of 1,000 in 1966, the U.S.'s commitment to a good dollar wavered in the subsequent years, followed by the dollar's decade-long plummet beginning in 1971 when President Nixon implicitly devalued the greenback with his explicit sever of its link to gold. Investment in new ideas is the source of economic growth, but investors are less likely to put money to work when governments are busy devaluing it. Stocks flatlined in the ‘70s to reflect a lousy investment environment fostered by a weak dollar.
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