‘Nixon shock’ can help us to make the meaning of Trump

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The author is Oliver Wyman and Deputy Financial Companies of Former Global Banks and Morgan Stanley and Diversified Finance Director

What will be the longer term financial results of Trump’s tariffs? There may be a 90-day break, but the question remains urgent. In 1971, Richard could look back on the experience of Nixon and help us understand what could happen next to investors.

Of course, the latest events share some signs with Nixon Shock, which occurred in the gold standard of the President, implemented 10 percent import tariffs and applied temporary price control. This de-board of the regime resulted in a period of global economic instability and uncertainty. This did not cause loss of business alone, but caused to be stopped. The price and salary of Nixo helps to trigger product failure, to trigger the product failure and help the salary. The whole episode was a contribution based on the great inflation of ’70s.

In connection with Trump’s tariffs, Nixon got acquainted with Cudgel countries to change the terms of trade to reduce US trade shortages. His biggest concerns were in Japan and Germany. “My philosophy, Mr. President, is our work to say that all the foreigners are screwed and first,” he said.

In today’s hyperfinancial world, we have already seen that the bond markets can force politicians more quickly. In 1971, Nixon’s tariffs took four months in 1971 were removed under the Smithsonian agreement. However, the interest rates and hedge currency risk, including shock, FX futures and options, to make emergency changes to create new tools related to the risk of emergencies and hedg currency risk.

The pain of stagnation in the banking system made a great change in financial behavior and financial regulation. Investors transferred to gold and real assets to protect the value of assets. Meanwhile, corporations and depositors have increased their activities to bond markets from banks. As the share of total debts in the economy, the bank lending has been since today. In short, in the early 1970s, modern finance was fabricated.

There are currently parallels for countries worried about tariffs. Returning in 1971 was a shock treatment for the closest allies of the United States. Nixon has already hit the tariffs of Canada in spite of the floating currency. Today, as Prime Minister Mark Carney, Canadians returned, and the tariffs eventually were removed. It could even be worse: Connally, also wanted to withdraw from a pact that lasted a long time with Canada with US cars and car parts. However, according to Paul Walkker, according to the memory of a state department, each press release that inspires the last page of a state department for tears.

As a result, the need to stabilize international relations with allies helped to move away from the balance. Henry Kissinger, then the National Security Counselor, “which is concerned about the violation of the confrontation against allied relations.”

Nixon has also put great pressure on Fed for expansion to replace shock. William Safiriter, the Nixon’s speech area, a proposal to expand the size of the federal reserve, including a proposal to expand the size of the federal reserve, as well as a proposal to expand the size of the federal reserve, including a proposal, including Nixon’s supportive members, calculates a continuous flow.

At the end of this, Nixon’s four-month tax can help simplify the revaluation of the dollar, but it fell short of the desired goals and no effect on imports. Economic shocks of the action, but are broken for decades. The creation of the euro is even stems. Can there be a digital euro or a deeper European capital markets? It is not clear yet, but history suggests that the enemy of this last shock is felt for years.