Nixon Ends the Gold Standard

On August 15, 1971, President Richard Nixon announced that the United States would no longer convert dollars to gold at the fixed rate of $35 per ounce — effectively ending the Bretton Woods system and the last link between money and precious metals. The "Nixon Shock," as it became known, was intended as a temporary measure to combat inflation and a trade deficit, but it became permanent. The world transitioned to floating exchange rates and pure fiat currency — money backed not by gold but by government decree and public trust. The consequences were profound: governments gained the ability to expand the money supply freely, enabling both stimulus spending and inflation. The price of gold, freed from its peg, rose from $35 to over $2,000 by the 2020s. Nixon's decision remains one of the most consequential economic acts in modern history.