When the United States stopped backing Dollars with Gold in 1968, that change unleashed an explosion of Credit that fundamentally altered the nature of our economic system.
In 1968, $1.4 trillion of Credit had been extended in the United States. By the end of last year, that figure had soared to $94.5 trillion.
That $93 trillion increase in Credit has made the US economy many times larger than it would have been had credit growth remained constrained.
Today’s Macro Watch On Substack video explains why such an astronomical surge in Credit could not have occurred if the US had continued to back Dollars with Gold.
It also shows that Credit Creation replaced Savings as the country’s primary source of funding after Dollars ceased to be backed by Gold, and that Credit Creation and Consumption replaced Saving and Investment as the dynamic that drives economic growth.
In short, by detailing the transformation of the country’s credit structure, this video describes how Capitalism evolved into Creditism.
This video is the sixth in the Creditism 101 series.
Credit Creation Drives The Economy Now