WTF Happened in 1971?

When you go off the gold standard and inflation really kicks in (really though, the money is worth so much less), the NUMBERS go up and everybody thinks they're doing well.

However, PURCHASING POWER rapidly falls away even as the NUMBERS are increasing.

The lack of purchasing power in later years is why back in the 50s and 60s, a factory worker who was the sole breadwinner for the family could afford a house, car, holidays and other middle-class goodies. To day however, families need both parents working and just manage to struggle along.

Did you know that you could buy a Rolex Oyster Watch in 1970 for $210? That same watch today will set you back about $9000-$10000.

Did you realise that $210 in 1970 was the cost of six ounces of gold? Those same six ounces of gold today is around $11000-$12000.

So the 1970 dollar was worth roughly $52 in today's money, or conversely today's dollar is worth less than 2 cents in 1970 money.

If you assume a guy in a factory was earning $50 a week back then, that same factory guy should be earning over $2600 a week now, or over 130 grand a year.

https://wtfhappenedin1971.com/podcast-discussions-in-order-o... has links to discussions about the graphs.

https://en.wikipedia.org/wiki/Nixon_shock also has more info but fewer graphs.

Let's say the USD/gold devaluation was the cause of everything. What would be the mechanism to cause stagnation of real wages while real GDP keeps climbing steadily?

we went off of the gold standard in 1971.