Nixon closes the gold window
Facing dwindling US gold reserves (down from 20,000 tonnes in 1950 to roughly 8,100 tonnes) and foreign central banks lining up to redeem dollars, Nixon announced in a televised Sunday-evening address that the Treasury would no longer convert dollars to gold at $35 per ounce. He also imposed a 90-day wage and price freeze and a 10 percent import surcharge. Bretton Woods ended that evening. The world was now on pure fiat, and stagflation followed for the rest of the decade.
The announcement came during a half-hour televised address, sandwiched between a speech about the Vietnam War. Most Americans did not immediately understand what had happened. Most currency traders did.
06 · Fiat & Petrodollar
On August 15, 1971, Nixon ended the dollar's convertibility into gold. Every major currency in the world became pure fiat — backed by nothing but the taxing power and political stability of its issuer. Two years later, a US-Saudi agreement priced oil in dollars, giving the dollar one more thing to stand on: the global energy trade.
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