Podcast summary
Nixon Shock: How the U.S. Abandoned Bretton Woods
Nixon ended gold convertibility to stop runs
Bretton Woods relied on confidence that dollar holders could redeem dollars for gold, but mounting deficits and inflation undermined that promise. Nixon’s 1971 suspension removed convertibility to prevent a cascading gold run.
Bretton Woods failed through dollar asymmetry
The system was structurally one-way: other countries had to accept dollars because there was no credible alternative, making U.S. domestic policy outcomes external constraints. Confidence collapsed when gold coverage fell.
Private capital made “speculators” a trigger
Bretton Woods underestimated fast cross-border capital, especially Eurodollar markets where unregulated dollars circulated. Nixon framed speculators as the enemy, but they accelerated market pressure once the gold promise looked non-credible.
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