Nixon Ends Dollar-Gold Convertibility
A Sunday-night television address severs the last formal link between money and gold
Quick facts
- Announcement date
- August 15, 1971
- Prior gold peg
- $35 per ounce (set at Bretton Woods, 1944)
- Common name
- The Nixon Shock
- Result
- End of Bretton Woods; shift to floating exchange rates
What happened
Under the Bretton Woods system, the U.S. dollar had been convertible into gold at 35 dollars per ounce for foreign governments, but by the late 1960s persistent U.S. balance-of-payments deficits and rising foreign holdings of dollars had put growing pressure on America's gold reserves, as more countries requested conversion than the U.S. Treasury could comfortably sustain. On August 15, 1971, President Richard Nixon announced in a televised address a set of emergency economic measures that included suspending the dollar's convertibility into gold, ending, without formal international negotiation, the arrangement that had anchored the postwar monetary system since 1944. The move, quickly nicknamed the Nixon Shock, effectively ended the Bretton Woods system, and within a few years the major world currencies moved to floating exchange rates determined by markets rather than fixed pegs to gold or to the dollar.
Why it matters
August 15, 1971 marks the point at which every major world currency became fiat money, meaning its value rests entirely on government decree and public confidence rather than on convertibility into a physical commodity, a structural change in the nature of money itself that remains the basis of the entire modern global financial system.
How we know
Nixon's August 1971 television address is a matter of the public record, preserved on film and in the U.S. government's own archives, and the resulting collapse of fixed exchange rates and shift to floating currencies is documented in the exchange-rate policies every major economy adopted in its immediate aftermath.
Sources
- U.S. Department of State, Office of the Historian. Bretton Woods-GATT, 1941-1947 · Reputable sourcehistory.state.gov · The domain "history.state.gov" is on our Reputable source registry. · Link is live and its text matches the event's key terms (Jul 2026)
- Richard Nixon Presidential Library and Museum (U.S. National Archives). August 15, 1971 · Primary source (author-declared)nixonlibrary.gov · Cited as a "primary" source (no stronger domain match). · Link is live and its text matches the event's key terms (Jul 2026)
See something wrong? . Corrections with a source get fixed fastest.
Part of a timelineHistory of Money26 events · Clay tablets that recorded debt before coins existed, a Chinese dynasty that printed the first paper money, and a currency divorced from gold in a single televised announcementView all →