🚪 Bretton Woods & the Nixon Shock
The 1944 agreement, and the 1971 broadcast that ended it.
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A single televised address
On August 15, 1971, in a single televised address, the world's money changed forever.
Most people watching had no idea.
The 1944 agreement
44 allied nations agreed to the Bretton Woods system:
- the U.S. dollar was pegged to gold at $35 an ounce
- every other currency was pegged to the dollar
One anchor, and everything else tied to it.
The dollar becomes the world's anchor
This made the dollar the world's reserve currency — backed indirectly by gold, through the U.S. commitment to redeem dollars held by foreign governments.
Holding dollars was, functionally, holding a claim on American gold. Countries did so by the billion.
The pressure builds
Through the 1960s, heavy U.S. spending and a growing pool of dollars held abroad put real pressure on U.S. gold reserves.
More dollars existed than there was gold to back them at the promised rate.
The promise still held on paper. It just couldn't survive being tested — and other countries had started testing it.
The Nixon Shock
On August 15, 1971, President Nixon suspended the dollar's convertibility into gold — the "Nixon Shock" — closing the gold window.
It was framed as temporary.
It never reopened. Every currency you have ever held has been on the other side of that decision.
Try it: The gold window
Tap through 1944 to 1971 and watch the claims overtake the gold.
Walk from Bretton Woods to August 15, 1971 and watch dollars held abroad climb past the gold behind them. Nothing is stolen and no law is broken — a promise simply stops being honoured, and the world keeps using the currency anyway. Open the The Gold Window tool →
Quick check: What was the Bretton Woods system?
- A 1944 agreement pegging the dollar to gold, and other currencies to the dollar ✓
- A treaty banning the private ownership of gold
- The founding agreement of the Federal Reserve
One currency anchored to gold, and the rest of the world anchored to that currency.
Quick check: What happened on August 15, 1971?
- The U.S. returned to a full gold standard
- Nixon suspended the dollar's convertibility into gold, ending the last formal link between money and gold ✓
- The dollar was devalued against gold but stayed convertible
Announced as a temporary measure. It has now been temporary for over fifty years.
Next up
That single decision changed what was actually possible with government debt.
Here's what happened next.