What is the gold standard?
The gold standard is a system where all money (dollar bills) are backed up by gold. This makes it so the paper dollar is always steady. We now have the monetary system where it is now backed up with nothing.
When did the U.S.A. get off the gold standard?
On August 15, 1971 President Nixon officially took the United States off the Gold Standard. In his speech, President Nixon claimed to have asked Treasury Secretary John Connally to defend the US Dollar by closing the convertibility of the dollar into gold. According to President Nixon this was done to protect the United States and the US Dollar against speculators and is remembered as “Nixon Shock”.
“In recent weeks, the speculators have been waging an all-out war on the American Dollar. The strength of a nation’s currency is based on the strength of that nation’s economy – and the American economy is by far the strongest in the world. Accordingly, I have directed the Secretary of the Treasury to take the action necessary to defend the dollar against the speculators. I have directed Secretary Connally to suspend temporarily the convertibility of the American dollar except in amounts and conditions determined to be in the interest of monetary stability and in the best interests of the United States.”
Quote from Nixons famous speach
As always, speculators or those who understand economics and recognize economic bubbles are blamed. People didn’t short the US Dollar or convert their US Dollar holdings into gold on unfounded rumors. The United States ran significant deficits that couldn’t be finance through direct taxation. The cost of the Vietnam war amongst other unfunded expenses would not be paid through direct taxation but through inflation. Since Bretton Woods of 1944, the value of the US Dollar was tied at a fixed ratio of 35 dollars to one ounce of gold. Still claiming to be on the gold standard the United States had to redeem US Dollars for physical gold. In the months leading up to President Nixon’s famous speech, France correctly assumed that the United States devalued their paper currency . In an effort to continue fooling the world the United States made good on the promise to exchange physical gold at the 35:1 ratio. This temporarily restored some faith in the US Dollar but having inflated the paper dollars beyond the promised gold backing was a limited and unsustainable strategy. It was on August 15, 1971 that President Nixon officially took the US Dollar off the gold standard but nobody really knows the exact date that the US Dollar was no longer backed by gold at $35 per 1oz. according to the agreed Bretton Woods agreement. Fact remains that any currency speculator that shorted the dollar assuming that the US had more paper dollars in circulation than gold backing was correct. It wasn’t the currency speculators that devalued the dollar, it was runaway government spending.
"Nixon shock" definition
Definition of 'Nixon Shock'A term used to describe the actions taken by former U.S. President Richard Nixon in 1971 that eventually led to the collapse of the Bretten woods system. The policies imposed and the actions taken by President Nixon included imposing a 90-day wage and price freeze in America, a 10% import surcharge and, most notably, closing the gold window, effectively making the U.S. dollar inconvertible to gold.
"Nixon shock"
By closing the gold window, the United States made it impossible for other nations to peg their currency to the gold standard, which was the underlying principle behind the Bretton Woods system. As a direct result of the economic policies imposed by the United States at the time, the gold standard was all but abandoned and the world's major currencies began to float.
How has the end to the gold standard effected the U.S.A.
How the end of the gold standard effected america is the amount of what the dollar is worth is always changing because there is not the steady 1 price that there was with the gold standard. With it always changing the price on shipping to other countries can be different prices because the dollar might be worth more or less than the amount that are dollar bill is. This doesn't only effect america, it effects China, Japan, and a lot more of the countries in the world.