In 1971 United States monetary policy changed in a major way. President Richard Nixon announced that the US dollar would no longer be redeemable for gold or other reserve assets. This effectively ended the Bretton Woods system and with the end of that system came a new period in US and global history.
This was an important moment in history, but it’s also important to understand not just what happened, but how the instruments at the center of the story, gold and US dollars, operate. By understanding their functions, as well as their limitations, we can begin to look forward with a plan to overcome their shortcomings.
This video dives into what exactly happened in 1971, and what compelled the US government to take the bold action they did. It also discusses the advantages and disadvantages of gold and dollars as both long term stores of value and mediums of exchange.
We still have gold and dollars. But this summer, we will have something that learns from their failures. We will have the first synthetic commodity money: Amples. Please check out our website and Red Book to learn more!