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The Nixon shock was the effect of a series of economic measures, including wage and price freezes, surcharges on imports, and the unilateral cancellation of the direct international convertibility of the United States dollar to gold, taken by United States president Richard Nixon on 15 August 1971 in response to increasing inflation. [1] [2]
The drain on US gold reserves culminated with the London Gold Pool collapse in March 1968. [2] On August 15, 1971, US President Richard Nixon unilaterally suspended the convertibility of US dollars into gold. The United States had deliberately offered this convertibility in 1944; it was put into practice by the U.S. Treasury.
That valuation remained in effect until August 15, 1971, when President Richard Nixon announced that the US would no longer value the US dollar with a fixed amount of gold, thus abandoning the gold standard for foreign exchange (see Nixon Shock).
The United Kingdom slipped into a gold specie standard in 1717 by over-valuing gold at 15 + 1 ⁄ 5 times its weight in silver. It was unique among nations to use gold in conjunction with clipped, underweight silver shillings, addressed only before the end of the 18th century by the acceptance of gold proxies like token silver coins and banknotes.
This system continued until 1971 when President Richard Nixon, in what came to be known as the "Nixon Shock", announced that the United States would no longer convert dollars to gold at a fixed value even for foreign exchange purposes, thus abandoning the gold standard.
By the summer of 1971, Nixon was under strong public pressure to act decisively to reverse the economic tide. On August 15, 1971, he ended the convertibility of the U.S. dollar into gold, which meant the demise of the Bretton Woods system, in place since World War II. As a result, the U.S. dollar fell in world markets.
January 19, 1971 129 11580: Establishing a seal for the National Credit Union Administration January 20, 1971 130 11581 Amending Executive Order No. 11248, placing certain positions in levels IV and V of the Federal Executive Salary Schedule January 20, 1971 131 11582: Observance of Holidays by Government agencies February 11, 1971 132 11583
1971 – President Richard Nixon ends the United States Gold standard monetary policy, known as the Nixon Shock; 1971 – A ban on radio and television cigarette advertisements goes into effect in the United States; 1971 – The landmark situation comedy, All in the Family, premieres on CBS. 1971 – The 26th Amendment is ratified, allowing 18 ...