Course Curriculum: 1973 as the Economic Regime Break (US • Canada • Global)
Subject: Course Curriculum: 1973 as the Economic Regime Break (US • Canada • Global)
7 chapters
1. A) The Triffin dilemma (the structural contradiction)
[Verse 1]
Back in forty-four they made a plan so grand
Dollar backed by gold, stability at hand
But the world needs dollars for their trade each day
How do you supply what everyone needs to pay?
[Chorus]
It's the Triffin trap, the paradox we face
Supply the world's reserves but keep your gold in place
The more dollars you send, the weaker you become
When foreign claims pile up, the confidence is done
Triffin trap, Triffin trap
Something's gotta snap
[Verse 2]
Uncle Sam must run deficits to provide
Dollars flowing out like an endless tide
But every dollar sent is a claim on gold
And the vault's not growing as the story's told
[Chorus]
It's the Triffin trap, the paradox we face
Supply the world's reserves but keep your gold in place
The more dollars you send, the weaker you become
When foreign claims pile up, the confidence is done
Triffin trap, Triffin trap
Something's gotta snap
[Bridge]
France and Britain watching, doing the math
Foreign dollar claims on a dangerous path
More paper promises than gold can back
The system's bound to crack
[Verse 3]
By the sixties everyone could see the signs
Foreign dollars exceeded the gold line
Rational holders started to doubt
Can America pay when they want out?
[Chorus]
It's the Triffin trap, the paradox we face
Supply the world's reserves but keep your gold in place
The more dollars you send, the weaker you become
When foreign claims pile up, the confidence is done
Triffin trap, Triffin trap
Something's gotta snap
[Outro]
Seventy-three the window finally closed
The contradiction everybody knows
Triffin saw it coming from the start
You can't play both parts
2. B) Why “just buy more gold” doesn’t solve it
[Verse 1]
When the market wants gold higher than your fixed price
You can't just buy more, that won't roll the dice
If the pressure builds up and the gold wants to flee
You need to sell gold to defend what you see
But selling gets harder when reserves run thin
That's when the real trouble begins
[Chorus]
You can't buy your way out of this mess
When sellers won't sell, you're under duress
Three choices remain when the system breaks down
Revalue the price or your economy drowns
Or cut off convertibility
That's your reality
[Verse 2]
Picture a dam with water rising high
Buying more sandbags won't keep it dry
You need to release pressure or strengthen the wall
Or watch the whole system completely fall
When gold flows away and won't come back home
Your fixed price stands all alone
[Chorus]
You can't buy your way out of this mess
When sellers won't sell, you're under duress
Three choices remain when the system breaks down
Revalue the price or your economy drowns
Or cut off convertibility
That's your reality
[Bridge]
Austerity's harsh, surpluses hurt
Tightening policy makes things worse first
Change the gold price, admit you were wrong
Or break the link, that's Nixon's song
Seventy-three was the year it all changed
The golden chains were rearranged
[Chorus]
You can't buy your way out of this mess
When sellers won't sell, you're under duress
Three choices remain when the system breaks down
Revalue the price or your economy drowns
Or cut off convertibility
That's your reality
[Outro]
More gold won't save you
When the market's against you
Face the hard choices
Listen to those voices
3. C) Why “just lend dollars” doesn’t fix it
[Verse 1]
Back in seventy-three, the world was changing fast
Gold convertibility couldn't last
When foreign nations came knocking at our door
Saying "Trade our dollars for the gold you store"
[Chorus]
You can't just lend dollars, it won't solve the pain
Different flow channel but the problem's the same
Capital account or trade account route
Those dollar claims will still cash out
Stock problem, stock problem, lending can't repair
More dollars flowing means more claims out there
[Verse 2]
Treasury said "We'll lend instead of trade"
Thought they found a clever financial grade
But every dollar that we send their way
Creates a claim that they can cash someday
[Chorus]
You can't just lend dollars, it won't solve the pain
Different flow channel but the problem's the same
Capital account or trade account route
Those dollar claims will still cash out
Stock problem, stock problem, lending can't repair
More dollars flowing means more claims out there
[Bridge]
Flow versus stock, you've got to understand
It's not about the pathway, it's about demand
Foreign dollar claims keep growing every year
Under gold standard, that's what Nixon feared
[Verse 3]
Whether goods or loans cross the border line
Every dollar claim could form a waiting line
At the Treasury window demanding precious gold
That's the story that history told
[Chorus]
You can't just lend dollars, it won't solve the pain
Different flow channel but the problem's the same
Capital account or trade account route
Those dollar claims will still cash out
Stock problem, stock problem, lending can't repair
More dollars flowing means more claims out there
[Outro]
So remember this lesson from seventy-three
Lending dollars won't set the system free
The break was coming, clear as day
Flow can't fix what stock gave away
4. A) Define “rent” correctly
[Verse 1]
When a business makes some money from the things that they sell
There's revenue coming in, and that's going well
But there's costs to pay for workers, for materials too
Normal profits for the risk, that's what owners are due
[Chorus]
Rent is what's above and beyond
More than normal costs, it's the extra you've won
Not just revenue flowing in
It's surplus when the dust settles thin
Rent, rent, above the line
Economic surplus, now you shine
[Verse 2]
Picture a oil well on premium land
Costs ten dollars per barrel, that's what was planned
But the market price is twenty, so what do you see
Ten dollars extra profit, that's rent for free
[Chorus]
Rent is what's above and beyond
More than normal costs, it's the extra you've won
Not just revenue flowing in
It's surplus when the dust settles thin
Rent, rent, above the line
Economic surplus, now you shine
[Bridge]
Don't confuse it with the money that you pay each month
For your apartment or your store, that's a different hunt
Economic rent's the bonus when you beat the game
Returns above normal, that's how you stake your claim
[Verse 3]
Monopoly power, special location
Patents and licenses, market domination
When barriers keep competitors away from your door
The extra profits earned, that's rent to explore
[Chorus]
Rent is what's above and beyond
More than normal costs, it's the extra you've won
Not just revenue flowing in
It's surplus when the dust settles thin
Rent, rent, above the line
Economic surplus, now you shine
[Outro]
Revenue minus normal costs and capital too
What's left over is the rent coming through
Economic surplus in your hand
Now you understand
5. B) Define “government take” correctly
[Verse 1]
When oil flows from the ground below
And companies strike it rich
The government takes its rightful share
Through a well-designed system switch
It's not just one simple payment
But a bundle wrapped up tight
Let me break down all the pieces
To make this picture bright
[Chorus]
Government take, government take
Six different ways the revenue flows
Royalties first, then income tax
Property payments, the total grows
Payroll taxes, land lease fees
Special levies when needed most
Government take, government take
From the resource-rich coast to coast
[Verse 2]
Royalties come from what's extracted
A percentage of the oil
Corporate income tax hits profits
From the company's honest toil
Workers pay their payroll taxes
Personal income gets its share
Each piece adds to the total
But compare them with some care
[Chorus]
Government take, government take
Six different ways the revenue flows
Royalties first, then income tax
Property payments, the total grows
Payroll taxes, land lease fees
Special levies when needed most
Government take, government take
From the resource-rich coast to coast
[Bridge]
Never take just royalties alone
And compare them to the gross
That's not the total public share
It's a mistake that matters most
Add them all together properly
Each tax and fee and levy
That's the real government take
And it can get quite heavy
[Chorus]
Government take, government take
Six different ways the revenue flows
Royalties first, then income tax
Property payments, the total grows
Payroll taxes, land lease fees
Special levies when needed most
Government take, government take
Now you know how the money goes
[Outro]
From nineteen seventy-three onward
This system changed the game
Understanding government take
Will never be quite the same
6. C) Why royalties can look “near zero” on gross revenue
[Verse 1]
Back in seventy-three the world changed its ways
Oil shocks hit and prices went crazy for days
But here's something tricky about oil sands deals
The royalty numbers aren't always what's real
[Chorus]
Near zero on gross but that's not the whole story
Pre-payout means waiting for the real glory
High capex projects need time to break even
Then profit-based royalties start the retrievin'
Don't judge by the gross when the game's just beginning
Post-payout is when the real money starts winning
[Verse 2]
Oil sands are expensive, billions to start
Heavy machinery, plants torn apart
Governments know that these projects take time
So they structure the deals with a two-part design
[Chorus]
Near zero on gross but that's not the whole story
Pre-payout means waiting for the real glory
High capex projects need time to break even
Then profit-based royalties start the retrievin'
Don't judge by the gross when the game's just beginning
Post-payout is when the real money starts winning
[Bridge]
Phase one is recovery, getting costs back
Gross royalties tiny, staying on track
Phase two is the payday, profits roll in
That's when the government's real take begins
[Verse 3]
So when headlines scream about pennies per barrel
Don't get caught up in that media quarrel
The regime's designed with a longer view
Pre-payout sacrifice for revenue true
[Final Chorus]
Near zero on gross but that's not the whole story
Pre-payout means waiting for the real glory
High capex projects need time to break even
Then profit-based royalties start the retrievin'
Two-phase system, it's all by design
First pay the costs back, then profits are mine
[Outro]
Seventy-three taught us energy's power
Royalty structures built for the long hour
7. D) The politics
[Verse 1]
In nineteen seventy-three the old rules broke apart
A turning point in history, a brand new economic start
But when the system's changing, who gets to call the shots?
The provinces and federal gov, they're tied up in some knots
[Chorus]
It's a tug of war, tug of war
Provinces want the rent and more
Federal wants to stabilize
Keep the prices from their rise
Tug of war, tug of war
Who controls the economic store?
Autonomy versus central plan
That's the fight across the land
[Verse 2]
The provinces they're sitting on resources in the ground
Oil and gas and minerals, there's money to be found
They want to capture all the rent, keep profits for their own
But Ottawa's got different plans for how wealth should be grown
[Chorus]
It's a tug of war, tug of war
Provinces want the rent and more
Federal wants to stabilize
Keep the prices from their rise
Tug of war, tug of war
Who controls the economic store?
Autonomy versus central plan
That's the fight across the land
[Verse 3]
Federal government's trying to manage the whole show
Redistribute the wealth around, keep macro numbers low
They need to smooth the business cycle, keep inflation tight
But provinces resist control, they want their sovereign right
[Bridge]
Federalism's built this way, conflict by design
Provincial independence clashing with the federal line
When economic systems shift, the tension's bound to grow
Who decides the nation's fate? That's what we need to know
[Chorus]
It's a tug of war, tug of war
Provinces want the rent and more
Federal wants to stabilize
Keep the prices from their rise
Tug of war, tug of war
Who controls the economic store?
Autonomy versus central plan
That's the fight across the land
[Outro]
Built-in conflict, that's the game
In federalism's name
Seventy-three showed us all
How the mighty powers fall
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