posted on Feb, 26 2009 @ 05:54 AM
Gold standard ended August 15th 1971 with Richard Nixon.
The gold standard broke down during World War I, as major belligerents resorted to inflationary finance, and was briefly reinstated from 1925 to 1931
as the Gold Exchange Standard. Under this standard, countries could hold gold or dollars or pounds as reserves, except for the United States and the
United Kingdom, which held reserves only in gold. This version broke down in 1931 following Britain’s departure from gold in the face of massive
gold and capital outflows. In 1933, President Franklin D. Roosevelt nationalized gold owned by private citizens and abrogated contracts in which
payment was specified in gold. Between 1946 and 1971, countries operated under the Bretton Woods system. Under this further modification of the gold
standard, most countries settled their international balances in U.S. dollars, but the U.S. government promised to redeem other central banks’
holdings of dollars for gold at a fixed rate of thirty-five dollars per ounce. Persistent U.S. balance-of-payments deficits steadily reduced U.S. gold
reserves, however, reducing confidence in the ability of the United States to redeem its currency in gold. Finally, on August 15, 1971, President
Richard M. Nixon announced that the United States would no longer redeem currency for gold. This was the final step in abandoning the gold standard.