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  • Originally posted by zraver View Post
    Hardly, but he was the one who had the ability to sway both the Kaiser and the Reichstag.
    It was the Kaiser's megalomania and delusions of grandeur that lead to the High Seas Fleet, Tirpitz was a manager who implemented the Kaiser's wishes to rival his Uncle Bertie
    sigpic"If your plan is for one year, plant rice. If your plan is for ten years, plant trees.
    If your plan is for one hundred years, educate children."

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    • America is so rich because it's awesome.

      I love that country, bloody nice hard working people there.
      Originally posted by GVChamp
      College students are very, very, very dumb. But that's what you get when the government subsidizes children to sit in the middle of a corn field to drink alcohol and fuck.

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      • Originally posted by Shek View Post
        Iain,

        The fatal flaw with your scenario is that under BW, USD weren't fiat - they were backed by gold. Once USD weren't backed by gold, BW collapsed.

        A second major problem is that in presenting a mercantilist viewpoint based on relative wealth, then the US shouldn't have even created a system that would have encouraged trade - this would have kept the depressed economies of Europe down and kept America "rich."
        Well to be honest I think we're talking two different things here. I was referring to the notion of the US dollar being used as the default medium of exchange on international markets post WWII, the World Reserve Currency, and as far as I am aware that was the purpose of Bretton Woods. Obviously you have far more knowledge in these areas, where am I going wrong? Also I wasn't aware that being backed by gold precluded a currency from being Fiat or vice versa, I always thought it was based on the notion of the Sovereign being trustworthy?
        As for the mercantilist assumption, we both know the US wouldn't have maintained that interpretation of 'so rich' beyond a few years, therefore it's unlikely that would be what I was meaning, yes?
        Originally posted by Shek View Post
        The final hurdle that you need to leap is to explain why 44 countries signed up for BW if it wasn't advantageous for them to do so?
        i answered that here

        Well no it's not, because the original question was Why is America so rich? We're all agreed that its geographical location and layout plus its human capital were all contributors to its rise. We seem to be in agreement that the massive influx of capital during WWII contributed to that growth. I still adhere to the statement that it was further chosen as the worlds reserve currency during Bretton Woods as it was best placed for the reasons above to act as a counter to the rise of the Soviet Union, strategic depth in the battle of capitalism vs communism.
        The quote goes on, I've just picked out the pertinent part in answer to your question.
        In the realm of spirit, seek clarity; in the material world, seek utility.

        Leibniz

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        • Iain,

          1. BW was set up so that the USD was explicitly NOT fiat money. The USD was convertible into gold, with the rate beginning at $35/oz gold. It did not dictate reserve currencies or the exchange medium.

          2. I guess I don't understand what you were meaning, although my point still stands - Bretton Woods was a step to close the gap faster since it was designed to improve other countries at the same time as it would help the US in terms of opening markets.

          3. BW was negotiated at a time when the USSR was not considered a threat (not a friend, but at least an ally). The first inklings of a cold war to come was the Yalta conference, held half a year after BW, and even then, that requires hindsight bias to see. The US doesn't begin cobbling together a post-World War Two Soviet policy until 1946, after BW was ratified and in effect.

          4. In the end, BW reflects in essence what the natural order was at the end of World War Two. In terms of helping American growth, it was the stable exchange rate system that facilitated any growth, and this was small and grew slowly while BW was in effect. The evolution of the USD into a preferred reserve currency existed just prior to BW and is responsible for little growth. However, we must be careful in only assigning causality of growth of trade to BW, because there are numerous other agreements that could have been made and there have been agreements since that are responsible for a more accelerated growth in the past four decades (and following the demise of BW).

          5. Your scenario of the ability to borrow large amounts of money is tied to BW2 and China, and doesn't make a country "so rich." I'd agree that someone can live beyond their means when they borrow, and I would agree that the US government, who is the one borrowing this money, has not used this money responsibly with how they have spent this money over the course of the last decade.
          "So little pains do the vulgar take in the investigation of truth, accepting readily the first story that comes to hand." Thucydides 1.20.3

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          • Originally posted by Shek View Post
            I asked the question to establish that citing more USD outside the US doesn't establish some kind of special power.
            Yeah, i will agree with that.

            The other point i was wondering about was because those $$ are out there that it makes it easier to borrow but your Krugman link indicates that the advantage this offers is quite small, $14 billion which is minuscule in comparison to the economy and not that significant vis-a-vis others. WHat makes borrowing cheap is a good credit rrating, start defaulting and that rating wil go down and the rates will go up. Any country with a good credit rating is going to get good rates.

            So are we to understand the $$ as a reserve curency offers only marginal advantage to the US ?

            If there's more $$ out there than inside, it means those $$ are not returning in the form of investments back to the US, presumably the place that would offer the best return for them.

            Come to think of it it was Henry Liu's article in the atimes some years back that gave me this idea of dollar hegemony, but this was a repeat of earlier themes i'd heard elsewhere.

            Originally posted by Shek View Post
            How many USD are traded between mafia/gang-type organizations - these USD are essentially lost to true circulation but are reflected in the outside vs. inside figure.
            I was curious why you mentioned gangsters because i did not figure they would be significant compared to white money flows between countries and international trade. krugman also talks about the Russian mafia'a role with the euro. I'm unsure why mafia outfits would have much effect here.

            Originally posted by Shek View Post
            Also, you answer your own earlier question about the role of the USD in a world without Bretton Woods. It was the de facto reserve currency by the time Bretton Woods was negotiated/ratified.
            ok so this leaves me what what i begun this thread with. WW2, and the fact the US was not as adversely affected as the other grat powers PLUS the fact they had to start from a point lower than pre-WW2 giving the US a good headstart of a cpl of decades which would give it a good lead over the others.

            In the end 'so rich' is always relative to the the rest.
            Last edited by Double Edge; 05 Dec 10,, 15:30.

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            • Originally posted by Shek View Post
              3. BW was negotiated at a time when the USSR was not considered a threat (not a friend, but at least an ally). The first inklings of a cold war to come was the Yalta conference, held half a year after BW, and even then, that requires hindsight bias to see. The US doesn't begin cobbling together a post-World War Two Soviet policy until 1946, after BW was ratified and in effect..
              Shek, I'll reply to the others when I have more time but the cold war was effectively up and running long before WWII. As you say, the US didn't have an effective Soviet policy until post WWII, the Capitalist west did, as did the Soviets toward the 'west'.
              In the realm of spirit, seek clarity; in the material world, seek utility.

              Leibniz

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              • A very cool video, probably deserving of its own thread, but I'll post it here since it demonstrates economic performance across the globe over the same time period.

                "So little pains do the vulgar take in the investigation of truth, accepting readily the first story that comes to hand." Thucydides 1.20.3

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                • Rossling has done a few presentations on TED talks some time back.

                  Program he uses is called gapminder

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                  • We were not a free country upto WW2 ?
                    And I guess that's Uncle Sam's fault too?

                    Ask CCP
                    I would if they still existed.

                    Would have taken much longer for their 'time was over' without WW2.
                    Theirs were over BEFORE WW2 started.

                    Look, WW2 certainly benefited the US. But it doesnt mean without WW2 the US would have been worsen off compared to others. Your 'assumption' is way too simple and linear. Ask even the dumbest in a history class and he would tell you that WW2 is one of the, maybe the, most important event of the 20th century. It shaped the world as how it is today. Had WW2 not happened, the world would be MUCH different from it is, and no one can tell for sure what it would look like.

                    Without WW2, the US may have been less a military superpower, less intervention. There might not be Vietnam War, no Korean War. Major European powers may have been at war several more times, like they always did. The list can go on and on. And, I'd say again, the world would be much different and there's no way one can tell exactly what it would be.

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                    • Originally posted by drhuy View Post
                      Theirs were over BEFORE WW2 started.
                      Prove it.

                      Germany had no more colonies after WW1. France & the UK did. As it is many African & Middle eastern countries only became independent in the 50-60s. Without WW2, it would have taken much longer. The output from the dependencies flowed back to the colonials.

                      Originally posted by drhuy View Post
                      Look, WW2 certainly benefited the US.
                      Yep because they suffered the least from it. Were steadily growing for well over a century prior. to it.

                      Originally posted by drhuy View Post
                      But it doesnt mean without WW2 the US would have been worsen off compared to others.
                      No, i said the others would have been less worse off, less behind the US without WW2. The US was going to be the richest anyway but would the gap be as large with the others, maybe not.

                      Originally posted by drhuy View Post
                      Your 'assumption' is way too simple and linear. Ask even the dumbest in a history class and he would tell you that WW2 is one of the, maybe the, most important event of the 20th century. It shaped the world as how it is today. Had WW2 not happened, the world would be MUCH different from it is, and no one can tell for sure what it would look like.
                      The others would have been less worse off and the gap with the US would have been less.

                      Originally posted by drhuy View Post
                      Without WW2, the US may have been less a military superpower, less intervention. There might not be Vietnam War, no Korean War. Major European powers may have been at war several more times, like they always did. The list can go on and on. And, I'd say again, the world would be much different and there's no way one can tell exactly what it would be.
                      Without WW2, european powers would have been less at war because that's what kicked it off in the first place :)

                      I'm not saying there could not be smaller wars but those would not have had the same impact that WW2 did.
                      Last edited by Double Edge; 06 Dec 10,, 10:30.

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                      • Originally posted by drhuy View Post
                        Ask even the dumbest in a history class and he would tell you that WW2 is one of the, maybe the, most important event of the 20th century. It shaped the world as how it is today. Had WW2 not happened, the world would be MUCH different from it is, and no one can tell for sure what it would look like.
                        More and more I am failing to see the periods between the wars as anything but a pause to regroup. The whole era from roughly the Crimean War of 1853 to the end of the Serbian wars should simply be considered a European Civil War. The major acts are WWI and II but the sheer number of other wars precludes any idea of peace. Crimean War, Italian Unification, Austro-Prussian war, Franco-Prussian War, Paris Commune, First Balkan war, Second Balkan War, WWI,German Revolution, Greco-Turkish,Finnish Civil war, Estonian War of Independence, Russian Civil War, Turkish War of Independence, Riff War, Russian-Polish War, Spanish Civil War, Winter War, WWII, Greek Civl War, Fifth Republic, French war in Algeria, Cold War, fall of communism and the Serbian Wars.

                        Europes not a big area, and we have over 140 years of turmoil that has roughly sketched out who is entitled to modern EU membership.

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                        • Getting our start with a dominant culture descended from the Brits and having such a great buddies to our north helped a lot!
                          sigpicUSS North Dakota

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                          • Zraver,
                            Pick most regions of the world and close analysis will reveal a series of regional wars, revolutions, civil wars, tribal conflicts, pongroms, insurrections and general mayhem. Europe is not different in that respect from any other region - a close look at the American continent for example would reveal a similar series of conflicts as would an examination of Africa and South East Asia. I suspect most "Wabits/Wabers" are Eurocentic for cultural reasons and as a result we tend to be more focused on European history.
                            If you are emotionally invested in 'believing' something is true you have lost the ability to tell if it is true.

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