Fifty years ago next month, at a secret weekend meeting at Camp David, President Richard Nixon and his top economic advisors decided to take the U.S. off the gold standard.
The dramatic move, announced by the president upon his return to the White House on August 15, 1971, suspended the most fundamental rules of the international monetary system, affecting the prices of all products, commodities and services in world commerce. No policy choice since World War II has done more to shape global exchange, with repercussions still visible in today’s economic and geopolitical rivalries.
Nixon’s decision overturned arrangements created by the U.S. and its wartime allies in 1944 at Bretton Woods, New Hampshire, where Washington had agreed to exchange dollars for gold at a rate of $35 per ounce.
Making the dollar convertible into gold, and pegging every other currency to dollars at a fixed rate, was meant to inject stability into international commerce.
The hope was to avoid the sort of competitive currency depreciations and rampant tariff increases that had worsened the Great Depression in the 1930s and helped to precipitate a world war.
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