The changes in the global monetary system, both from the center and from the periphery, will have as deep an impact on the global economy and the markets as the last major change, in 1971, when the U.S. closed the gold window, ending the last vestige of the gold system. These impacts are likely to be similar to those that followed then: higher inflation, a weaker dollar, and a stagflationary environment, with oil, gold and other commodities performing well, along with emerging market stocks and bonds, while developed stock and bond markets will mostly languished. We are already seeing some of these effects play out.

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