Today is a crucial anniversary for the history of the economy. The August 15, 1971, from the Camp David residence, US President Richard Nixon announced the end of the convertibility of the dollar into gold, begun in 1944 with the agreements of Bretton Woods.
The monetary system born at the end of the Second World War foresaw a fixed exchange rate mechanism with the dollar as a point of reference, as it is in turn pegged to gold. The central banks of the various countries were therefore obliged to intervene on the market to maintain the established parities. The goal was avoid speculative excesses limiting the broader mobilization of capital. In this way, the US hoped to prevent systemic crises such as the one that began in 1929 and continued in the XNUMXs with the Great Depression in the United States.
By the early XNUMXs, however, the scenario had radically changed. The US Treasury was exhausted by spending related to the Vietnam War. To finance the conflict, the US had used 12 tons of gold, putting its gold reserves at risk. Nixon then decided to get out of the grip: by canceling the convertibility of the dollar into gold, the United States returned free to print money without the obligation to own an amount of gold equal to the greenbacks placed on the market.
From the point of view of American public coffers, Nixon's move was a godsend, while for the global currency system it proved to be an unprecedented earthquake: suddenly all certainties disappeared and exchange rates returned to fluctuate without restrictions.
The end of Bretton Woods thus marked the beginning of a period of great currency instability and financial speculation. It was a decisive change for Italy too, the consequences of which we are still suffering today: since that day 49 years ago, in fact, governments have once again been free to practice competitive devaluations some coins. The fundamental mechanism at the origin of the explosion of the Italian public debt.
Read the story of that August 15, 1971 in report signed by Ernesto Auci.
