Why did we abandon the gold standard?
In: Economics
For the US the gold standard was abandoned because France realised that the USA had printed too many dollars to fund the Vietnam war. This left france with a pile of dollars and an opportunity for profit. The French began to convert their US dollar reserves into gold and shipping it to France. This left the US in a horrible position if the french emptied fort knox the US Dollar would be proved worthless and the US could no longer import any goods. The french likely believed the US would devalue the Dollar against gold, or seize gold from US citizens again, but instead the US suspended gold convertibility to buy time while they worked to set up a new Fiat based international currency system and eventually the Eurodollar system took over. Later the Gold standard was officially abandoned.
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