50th anniversary of Nixon shock: story of a scam
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50th anniversary of Nixon shock: story of a scam


On August 15, 1971, President Nixon unpegged the US dollar from gold, signing a new are of fiat money. The 50th anniversary of this event is a good opportunity to remember what exactly happened and how it affects our present days.

The after-war Bretton-Woods agreement, championed by the US, was supposed to bring monetary order: member countries sold their gold to the US at $35/ounce, and the US dollar would become world’s reserve currency, redeemable for gold at any time. However, US economic struggles and later need to finance the war in Vietnam made it impossible to keep its word. So Nixon unilaterally threw the US promise out of the window, all while keeping the gold of course.

Without gold redemption the Fed could print as much as it wished – and it printed plenty, to distribute mostly among the well-connected and powerful figures, bringing big money and politics closer than ever.

US diplomats have been excelling in their art, trying to keep the dollar as the dominant reserve currency across the globe, which motivated the Fed to print even more. Some countries with rebellious ideas of replacing dollar with other currencies saw American troops landing on their soil, others – economic hurdles. To this day dollar is the universal unit of account and the most popular reserve currency, which makes other countries so dependent on the USA and the Fed in particular.

The Covid signed another stage of fiat money history, unleashing dollar-printing machines to unprecedented levels. And while average Americans have a small chance to grab a piece of a pie before the inflation gets out of control (like investing their stimulus checks into real assets), other countries have absolutely no control over their dollar reserves that lose value day by day. Some, like Russia or China, have been exchanging dollars for gold for several years already. El Salvador bet on Bitcoin. Others, however, are more like silent spectators of their fortune dilapidation (corruption really comes to mind when trying to find the reasons).

Luckily, Bitcoin has no borders, no decision-makers, no politics. It cannot be invaded in the name of peace, and it cannot be imprisoned under whatever pretext. To us it is the ultimate store of value, and its fast-increasing adoption proves the point much better than confusing attempts to justify unlimited money printing.