Nixon Shock
About Nixon Shock
On August 15, 1971, President Nixon ended the convertibility of the US dollar into gold, effectively ending the Bretton Woods system. The dollar had been pegged at 35 per ounce of gold since 1944. By 1971, foreign governments held more dollars than US gold reserves could support. France and Britain were redeeming dollars for gold. Nixon also imposed a 90 day wage and price freeze and a 10 percent import surcharge. The dollar floated freely for the first time. The Nixon Shock created the modern system of fiat currencies whose value is determined by markets rather than metal. The price of gold soared from 35 to 800 by 1980.
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