The next five weeks will mark one of the most significant transformations in the international monetary system in over 30 years.
Since the dollar is still the lynchpin of this system, the dollar itself will be affected.Whatever affects the dollar affects you, your portfolio and your personal financial security. It is vital to understand the changes underway in order to protect your net worth, and even prosper in the coming transition.
Such radical transformations of the international monetary system have happened many times before, including the dual “accords” of the 1980s. These were the Plaza Accord in 1985, and the Louvre Accord in 1987 — named respectively after the Plaza Hotel in New York, and the Louvre Museum in Paris where the key meetings took place.
At the Plaza Accord, the top financial officials from the U.S., U.K., West Germany, France and Japan agreed on Sept. 22, 1985, to devalue the dollar. The dollar plunged 30% in the next two years.
The damage was so bad that a second meeting was called at the Louvre on Feb. 22, 1987. That meeting was attended by the top financial officials from the U.S., U.K., West Germany, France, Canada and Japan. Participants at that meeting agreed to halt the dollar’s devaluation. The dollar was relatively stable in the years following.
It’s a mistake to believe the dollar’s value is set by market forces.
That may be true in the short run, but in the longer run, the dollar is worth whatever governments want it to be worth.The more powerful the government, the more they can call the shots.
Since the dollar is still the lynchpin of this system, the dollar itself will be affected.Whatever affects the dollar affects you, your portfolio and your personal financial security. It is vital to understand the changes underway in order to protect your net worth, and even prosper in the coming transition.
Such radical transformations of the international monetary system have happened many times before, including the dual “accords” of the 1980s. These were the Plaza Accord in 1985, and the Louvre Accord in 1987 — named respectively after the Plaza Hotel in New York, and the Louvre Museum in Paris where the key meetings took place.
At the Plaza Accord, the top financial officials from the U.S., U.K., West Germany, France and Japan agreed on Sept. 22, 1985, to devalue the dollar. The dollar plunged 30% in the next two years.
The damage was so bad that a second meeting was called at the Louvre on Feb. 22, 1987. That meeting was attended by the top financial officials from the U.S., U.K., West Germany, France, Canada and Japan. Participants at that meeting agreed to halt the dollar’s devaluation. The dollar was relatively stable in the years following.
It’s a mistake to believe the dollar’s value is set by market forces.
That may be true in the short run, but in the longer run, the dollar is worth whatever governments want it to be worth.
