When USA Abandoned Gold.
On 15 August 1971, Richard Nixon President of USA signed an executive order repudiating the decades old Bretton Woods Treaty that promised to pay in gold for dollars presented to it. This is a dramatic presentation of the moment when it happened. It is inspired by his memoirs.Camp David – August 15, 1971
11:47 PMNixon sat alone in the Lincoln Sitting Room, yellow legal pad in his lap, trying to make sense of what he’d just done. The speech was over. The cameras were gone. Now it was just him and the weight of decisions he wasn’t entirely sure he understood.
Connally was right, he thought, tapping his pen against the pad. We had to do something. Congress was breathing down my neck. The press was calling me weak. Every Republican senator I talked to was screaming about the economy.
He looked at his notes from the weekend. Wage and price controls. Import taxes. Investment tax credits. All of it made sense as politics. But that gold thing…
Burns looked like I’d shot his dog when I said we’re closing the gold window.
Nixon got up and walked to the window, looking out at the darkness. Somewhere out there, markets in Tokyo would open in a few hours. Then London. Then New York. By tomorrow morning, the whole world would know that America wasn’t going to convert dollars to gold anymore.
What does that even mean, really?
He’d asked that question three times during the weekend meetings, and each time he got a different answer. Connally said it would give them flexibility. Burns said it was dangerous. Volcker mumbled something about exchange rates.
I used to sell haberdashery. At least I understood that business.
The truth was, he’d made the decision mostly because Connally seemed so sure about it. And because the British asking for $3 billion in gold had spooked him. What if everyone started doing that?
Better to end it now than wait for a run on Fort Knox.
But sitting here now, Nixon felt like he’d just signed something he couldn’t take back. Like when you’re a kid and you dare someone to do something stupid, not thinking they’ll actually do it, and then they do.
What if this breaks everything?
He walked back to his desk and picked up the phone, then put it down. Who was he going to call? Connally would just tell him it was brilliant. Burns would say “I told you so.” Pat was asleep.
The stock market will tell us tomorrow. If it goes up, I’m a genius. If it crashes, I’m the president who destroyed the global economy.
Nixon looked at his legal pad again. At the top, he’d written “New Economic Policy.” It sounded important. Presidential. But underneath, in smaller handwriting, he’d scribbled a question: “What happens next?”
He still didn’t have an answer.
Maybe that’s what being president really is, he thought. Making decisions you don’t fully understand, with information that doesn’t quite make sense, under pressure from people who all want different things.
He thought about Truman, dealing with the atomic bomb. Eisenhower, sending troops to Little Rock. Kennedy, with the Bay of Pigs.
Did they know what they were doing? Or were they all just winging it like me?
Outside, a helicopter passed overhead. Secret Service, probably. The world kept spinning. Tomorrow, people would wake up and go to work and buy groceries and fill up their cars, and they’d have no idea that the guy in this room had just changed how money worked for the entire planet.
Hell, I’m not even sure I know what I changed.
Nixon closed the legal pad and headed toward the bedroom. Pat would ask him how it went, and he’d tell her it went fine. Presidential. Under control.
But lying there in the dark, he’d be wondering the same thing he was wondering now: What the hell did I just do?
And somewhere in the back of his mind, a nagging thought he couldn’t quite shake: This is going to be bigger than I think it is.