The 1970s All Over Again? Part 1: The Middle East Explodes

By: John Rubino





For most Americans the geopolitical/financial crises of the 1970s happened so long ago that they’re about as relevant as the Revolutionary War or the Reformation.

But for seasoned citizens who were around back then and paying attention, the similarities to today are becoming both eerie and scary. Consider:

In the early 1970s the Middle East was a hotly contested part of the world, with Russia (then called the Soviet Union) and the US (backed by Europe) maneuvering for control of the region’s oil. Israel was a source of outrage for its neighbors, with war always a real possibility. The Sunni/Shia rift was in danger of tearing the Islamic world apart. AND government spending was soaring in the West, leading to highly experimental (read desperate) monetary policy at the Fed.

Given all those lit fuses, it’s no surprise that the powder keg eventually blew up, producing local wars, broader confrontations between nuclear powers, spiking oil prices and inflation. Here’s oil and US inflation during the decade:


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