Richard Nixon ends U.S. dollar convertibility to gold

On August 15, 1971, U.S. President Richard Nixon announced a major shift in global economics by suspending the convertibility of the U.S. dollar into gold. This unilateral decision, made during a televised address, effectively ended the Bretton Woods system that had anchored international currencies to the dollar, which in turn was tied to gold at $35 per ounce.

The move was driven by economic pressures, including inflation and the high costs of the Vietnam War, which had led to U.S. gold reserves dropping significantly. To stabilize the economy, Nixon also implemented a 10% import tax and a 90-day freeze on wages and prices.

While described as a temporary measure, the suspension of the gold standard became permanent, leading to the era of floating exchange rates where currency values are determined by market forces rather than government decree.