History of Money & Markets · Modern crises
Bretton Woods to 1971: the dollar standard
How the dollar became the world's reserve currency, and why Nixon ended gold convertibility.
Step 1 of 4 · Overview15 min read ·
July 1944
Bretton Woods: currencies pegged to USD
USD → gold
$35 per ounce
1960s
deficits; gold drains from US
Aug 15, 1971
Nixon closes the gold window
1973
floating exchange rates
After WWII, the IMF and World Bank were created and other currencies were pegged to the dollar, which was convertible to gold at $35/oz for foreign governments. As US spending grew, there were more dollars than gold to back them.
Key idea
Crypto tie-in: much of Bitcoin's "hard money" narrative points back to 1971 as the start of pure fiat money.Next: Practice