Global Meet-Up #2 (Los Angeles) The End of the World US Tour

So let me give some historical background as to how we got to this point.

So the year is 1944, and America is about to win this war against Japan and Germany.

They organize the Bretton Woods Conference in New Hampshire, and the idea is to establish the US dollar as a world reserve currency.

The logic of this is very simple.

World War II, America had to build a lot of factories to supply armaments for its war machine.

Now that the war is coming to an end, what do you do with these factories? And the answer is you turn these factories from manufacturing munitions and weapons to manufacturing TVs, cars for the global market.

Problem is, the entire world is destroyed because of World War II.

So what America did was lend the world the money in order to buy cars and washing machines and television sets.

And this became the basis for Pax Americana, as well as the U.S. dollar system.

Now, because America was lending so much money to Europe and to Japan, it needed collateral for this financing.

And this collateral, of course, was gold.

So the agreement was that US dollars would always be pegged to gold.

We call this a gold standard.

And it worked great for the first 10 years, first 10, 20 years, because it allowed the average American middle class person to live like a Roman emperor.

If you were a white male in 1950s, you were in paradise.

You had maybe a factory job, but with a factory job, you could have your wife work at home.

You could raise three kids and have them all go to college.

You could go on vacation twice a year.

You had two cars.

It really was the best life.

But unfortunately, America started to waste a lot of this what we call exorbitant privilege, the right to print U.S. dollars.

And so America started to do stupid things like, for example, the war in Vietnam, the space race, the Great Society.

And at this point, the world recognized that maybe America is spending too much money.

At the same time, the rest of the world is catching up to America industrially.

So Germany and Japan, they were devastated in the war, but they're working really hard.