Mark Moss traces how the 1944 Bretton Woods Agreement pegged all currencies to a gold-backed dollar, then collapsed when the US printed too much money. Nixon ended gold convertibility in 1971, defaulting on the commitment and unleashing unchecked money supply expansion that continues today.
In 1944, the whole world got together and agreed to something called Bretton Woods Agreement. And the Bretton Woods Agreement is that the dollar would be backed by gold and then all the currencies of the world would peg to the dollar. So that system worked for a few decades. But of course, the government did what the governments do, which is they printed way too many dollars. And the rest of the world started realizing this and they're like, hey, wait, wait, wait, wait, hang on. We don't want these paper dollars. We'll take the gold. And so each nation started redeeming the paper dollars for the gold until the US was running out of gold. France sent over their warships to the United States to collect the gold, President Richard Nixon in 1971 said, hang on, hang on.
I have directed Secretary Connally to suspend temporarily the convertibility of the dollar into gold.
So they basically defaulted on the debt that they had. That officially ended the gold-backed currency. And so since 1971, we've seen this money supply just continue to expand at a parabolic rate because there's no longer that gold backing to hold it there.
