Very interesting article, here's a fun tidbit:
The world of 2011 is very different to that of 1980.
In 1980, the US was the world’s largest creditor nation. Today, it is the world’s largest debtor nation – the largest debtor nation the world has ever seen.
In 1980, China was a communist country whose citizens were banned from owning gold. Today, there are 1.3 billion Chinese people and a growing middle class who can buy gold.
The Chinese central bank did not have any currency reserves in 1980, today they have $3.2 trillion in foreign exchange reserves.
Similarly, India, China, Brazil and other emerging markets were debtor nations in 1980 today they are creditor nations with massive foreign exchange reserves denominated primarily in dollars.
In 1980, the much of the world was coming out of a period recession and stagflation. Today, we appear to be on the verge of a recession or Depression possibly involving stagflation again.
In 1980, there was no banking or sovereign debt crisis and no risk of global financial and economic contagion.
