Dollar and Gold examines the Bretton Woods system, the post-World War II international monetary system established in 1944. It argues that inherent flaws, such as the fixed exchange rates and the U.S. dollar's role as the reserve currency convertible to gold, ultimately led to its collapse. The book explores how the system, while initially fostering stability, became unsustainable due to growing U.S. trade deficits and the economic pressures of the 1960s. This economic history reveals how the commitment to gold convertibility created immense pressure on the US dollar as the global economy evolved.
The book chronicles the key phases of the Bretton Woods era, analyzing the growth of the U.S. economy and the increasing trade deficits that undermined confidence in the dollar. A pivotal moment examined is President Nixon's 1971 decision to suspend the dollar's convertibility to gold, ending the system. Dollar and Gold utilizes primary and secondary sources, offering a nuanced perspective, neither glorifying nor condemning the system, but highlighting both its achievements and limitations.
The narrative progresses chronologically, from the system's inception to its demise, drawing parallels to contemporary challenges in the global economy. It delves into the political and economic factors shaping this period, providing a valuable resource for understanding current debates about international finance and the role of the dollar. The book’s structure provides a comprehensive understanding of this historical period, establishing context, detailing key phases, and culminating with an analysis of Nixon's decision and its consequences.
