Nixon: End the Gold Standard (1971)
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Facing inflation and gold outflows, Nixon ended the dollar's convertibility to gold, effectively ending the Bretton Woods system. This created the era of floating exchange rates and fiat currencies.
End Gold Convertibility (Nixon Shock)
1971
year
Fiat currency, floating exchange rates
monetary system
Dollar devalued, inflation rose
short-term effect
Chosen — fiat system still in place today
outcome
Defend Gold Standard
1971
year
Dollar pegged to gold at $35/oz
monetary system
Deflation, recession to maintain peg
short-term effect
Not chosen — US gold reserves were insufficient
outcome
Revalue Gold Higher
1971
year
New gold price, maintain convertibility
monetary system
Temporary fix
short-term effect
Not chosen — would need constant readjustment
outcome
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