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Entry 226 of 240Reform

Nixon Ends Gold Convertibility

1971 CE/North America/United States
Today The United States (and the global monetary system)Span Fiat money era · 1971 onward

President Nixon cut the last link between the U.S. dollar and gold, ending the system that had anchored world money and putting the entire globe on 'fiat' currency — money backed by nothing but confidence in the governments that print it. It was meant as a temporary fix; it became the permanent architecture of modern finance. The logic of Rome's denarius and Song China's paper is now planetary: the value of money rests, everywhere, entirely on trust.

◆ Worth knowingEvery dollar, euro, and yen in your accounts is backed by nothing physical at all — just collective belief — an arrangement barely 50 years old, and the one every earlier debasement had been feeling its way toward.
◆ The mechanismMonetary debasement

A money's intrinsic or backed value is diluted to fund obligations; confidence in it erodes, often into inflation.

Also: Debt / credit cycle · Trade-route shift

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