📅 1971: The Year Money Changed
The day the dollar quietly stopped being backed by anything.
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Paper promises
For most of the 20th century, dollars were claims on gold. The paper was just a receipt; real gold sat in vaults behind it.
Other countries could even redeem their dollars for physical gold. The system had an anchor.
August 15, 1971
The U.S. had printed more dollar claims than it had gold — spending on wars and programs. Countries noticed and started redeeming.
So President Nixon announced the gold window was closing. "Temporarily."
It never reopened. Since that day, the dollar — and every currency on Earth — is backed by nothing but trust. This is called fiat money, from the Latin for "let it be done." Money by decree.
Quick check: What has backed the dollar since 1971?
- Gold in Fort Knox
- Oil reserves
- Trust in the government — nothing physical ✓
"Fiat" means by decree. It has value because the state says so and we all agree to use it. That works — until the supply grows faster than the trust.
What happened next
Since 1971, with the anchor gone:
- The dollar lost ~87% of its purchasing power
- House prices went from ~2× a yearly wage to 7×+
- Wages flatlined while productivity soared
- Savings accounts stopped preserving wealth
A whole website — WTF Happened in 1971? — just charts these breaks. Once you see the kink in every chart, you can’t unsee it.
Quick check: Why does 1971 matter to YOUR paycheck today?
- It doesn’t — ancient history
- Unanchored money can be expanded endlessly, diluting wages and savings ever since ✓
- It made gold illegal
Every "why can’t I afford what my grandparents could?" traces back, in part, to money that can be expanded without limit. You’re living inside the experiment. Next: how the printing actually works.