Bretton Woods dollar-gold peg
At Bretton Woods, New Hampshire, 44 Allied nations signed the agreement on July 22, 1944 that established the postwar international monetary system. The U.S. dollar was pegged to gold at $35 per ounce. All other currencies were pegged to the dollar. The system was designed to avoid the competitive devaluations and monetary chaos of the interwar period. It worked for about 25 years — a period of historically low monetary volatility — before the U.S. began issuing dollars faster than it could realistically redeem in gold, setting up the collapse of 1971.
Keynes, representing Britain at Bretton Woods, proposed an international clearing union with a supranational reserve currency (the 'bancor') to replace gold. Harry Dexter White, representing the U.S., rejected the proposal in favor of a dollar-gold system. The U.S. position won because the U.S. held roughly two-thirds of the world's gold reserves in 1944 and the system formalized that dominance.
05 · Hyperinflation Century
With gold constraints effectively removed after World War I, the 20th century produced the most spectacular currency collapses in recorded history. Weimar Germany, Hungary, Greece, China, Yugoslavia, and dozens of lesser-known cases all reached true hyperinflation — monthly inflation above 50 percent, continuing for months or years. The Hungarian pengő collapse of 1946 remains the worst on record, with prices doubling every 15 hours at its peak. The era ended with Nixon's closure of the gold window in August 1971, which made every major currency in the world fully fiat for the first time in history.
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