What changed in 1980
- Thread starter StarDust9182
- Start date
PCs were being introduced. But it is unclear to me if they had had time to have a big impact by 1982.
One event is that the shah died and the US lost an important ally. In the 70s there was the oil crisis, so perhaps the loss of the control of the oil price as a monetary policy tool was part of it. I think oil price rises are highly deflationary in an consumption-driven economy that requires cheap distribution of goods. I think oil policy drove a lot of wars.
Thanks for the input.
Some great answers here that I need to research more. I appreciate your inputs.
Imo, CC played a very large role.
Back in the day our parents had to save up to make a large purchase. Well they established a habit. Saving up for a rainy day, for a special purchase. They'd make the purchase and kept saving out of habit.
CC changed all that. "Buy now, pay later". The CC became the rainy day fund. The emergency fund.
Also, the CC (mc and visa) were portable. No longer did you have to shop only at Sears or Montgomery Wards (In house receivables). They were the only creditors in town. With a MC or Visa, you could shop at any retailer on credit.
Back in the day our parents had to save up to make a large purchase. Well they established a habit. Saving up for a rainy day, for a special purchase. They'd make the purchase and kept saving out of habit.
CC changed all that. "Buy now, pay later". The CC became the rainy day fund. The emergency fund.
Also, the CC (mc and visa) were portable. No longer did you have to shop only at Sears or Montgomery Wards (In house receivables). They were the only creditors in town. With a MC or Visa, you could shop at any retailer on credit.
There are Eras
As one ends another begins.
There are several Principles that are in play as well.
You will find out how some Premiums disappear and others slide into place.
Wealth building is a steady process for those participating.
Baby Boomers. new generation, someone born after 1946 would be 34 , new family
prior generation losing control
between 1965 and 1982 the DJIA had basically gone sideways, 82 was the year it
took off breaking thru 1000 and continuing up
interest rates decline - phew !
employment boom, from 10% in 82 to 5.5% by 89
Reagonomics accompanied it and there was a new optimism; Reagan was shot on
March 30/81, 69 days into the presidency - to Nancy Reagan -
"Honey, I forgot to duck" - he lived
"Mr Gorbachev, tear down this wall !", June 12/87 , Berlin wall went down Nov 9/89
big hair
see: http://en.wikipedia.org/wiki/1980s
prior generation losing control
between 1965 and 1982 the DJIA had basically gone sideways, 82 was the year it
took off breaking thru 1000 and continuing up
interest rates decline - phew !
employment boom, from 10% in 82 to 5.5% by 89
Reagonomics accompanied it and there was a new optimism; Reagan was shot on
March 30/81, 69 days into the presidency - to Nancy Reagan -
"Honey, I forgot to duck" - he lived
"Mr Gorbachev, tear down this wall !", June 12/87 , Berlin wall went down Nov 9/89
big hair
see: http://en.wikipedia.org/wiki/1980s
I highly recommend Harry Dent's book "The Great Depression Ahead".
He makes some pretty outlandish claims at times, and I don't pay any attention to his price targets, but he has some very good explanations of demographics and how they forecast price cycles, such as deleveragings, inflation, prosperity, etc.
He makes some pretty outlandish claims at times, and I don't pay any attention to his price targets, but he has some very good explanations of demographics and how they forecast price cycles, such as deleveragings, inflation, prosperity, etc.
Republicans decided it was wise to borrow more than was coming in.
National debt was 800 billion in 1980
When reagan left it was 2.6 trillion
Debt has averaged 25% increase every year under republicans since 1980 except for 88-92
Under obama so far it has averaged 15% a year.
Borrowing is not the answer and this is going to turn out ugly in the end.
National debt was 800 billion in 1980
When reagan left it was 2.6 trillion
Debt has averaged 25% increase every year under republicans since 1980 except for 88-92
Under obama so far it has averaged 15% a year.
Borrowing is not the answer and this is going to turn out ugly in the end.
Maybe Typhoid Mary / ground zero was 10 years prior. Big government spending leading
to rational purchase of USD and exchange for gold. French 747 cargo filled with gold leaving New York. Nixon ends gold standard . Tick....Tick...ever since and maybe as simple as that.
Or.....those damn currency speculators.
to rational purchase of USD and exchange for gold. French 747 cargo filled with gold leaving New York. Nixon ends gold standard . Tick....Tick...ever since and maybe as simple as that.
Or.....those damn currency speculators.
I have indeed also wondered about the 1971 gold standard change by Nixon, which seemed to be followed by huge inflation culminating in Volker decimating inflation by rising interest rates.
But I wonder, how would rising interest rates so high (tripling them) not blow up the debt bubble back then. Today if they took interest rates from 2% to 6% in one year, what happens to the world economics, in particular international trade settled in currencies. But it worked in 1982 didn't it?
But I wonder, how would rising interest rates so high (tripling them) not blow up the debt bubble back then. Today if they took interest rates from 2% to 6% in one year, what happens to the world economics, in particular international trade settled in currencies. But it worked in 1982 didn't it?