This actually happened in 1965. De Gaulle, the president of France at the time, sent the French Navy over to America and took their reserve gold back home. This prompted other countries to do the same and by 1971 America had switched from a gold standard to a fiat currency.

https://en.wikipedia.org/wiki/Exorbitant_privilege

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somenameforme 21 hours ago | parent [-]

You're leaving out some really interesting context there. After the Great Depression the economic equilibrium the world settled into, with the Bretton Woods treaty, is that participating countries, which was most of the non-Soviet aligned world, would agree to base their currency's value on the USD.

That'd obviously give the US an immense amount of power, so in exchange the US would agree to make the USD convertible to gold at a fixed rate by other countries (as opposed to e.g. individuals). So the whole point here is that if the US tried to print a whole bunch of money to exploit our 'exorbitant privilege', countries would be able to take their now devaluing USD and exchange into a gold at a stable rate and make a whole bunch of money. So it was intended to be a self correcting system.

The problem is that the US did print a whole bunch of money anyhow, and when France and other countries said 'hey we'd like to convert our USD to gold' we just said 'nah' and defaulted on our obligations, bringing Bretton Woods to an end in 1971. That signaled the beginning of the modern completely fiat economic system, and led to some wild quotes from the time. For instance the Secretary of the Treasury under Nixon (who was president in 71) has a great quote of, 'The dollar is our currency, but your problem.'

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It's critical to understand this history to understand what's happening today with countries increasingly seeking to replace the dollar. Many want something akin to Bretton Woods 2.0, but without any country being given a win button. And that's not so easy to devise!

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JumpCrisscross 15 hours ago | parent | next [-]

> After the Great Depression the economic equilibrium the world settled into, with the Bretton Woods treaty

There was a big thing that happened between the Great Depression and Bretton Woods that's pretty critical to why that system emerged.

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marbro 3 hours ago | parent | prev | next [-]

Only fools like the management of Apple, Microsoft, and Google would lend money to the United States government. Government bonds have fallen 80% relative to gold in the past few years.

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xorcist 15 hours ago | parent | prev | next [-]

> most of the non-Soviet aligned world, would agree to base their currency's value on the USD

That seems like wild thing to agree to. Where can I read more about this?

	▲	vikramkr 13 hours ago \| parent [-]
		There was this thing where there was a world war and stuff that played a role

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tancop 14 hours ago | parent | prev | next [-]

> Many want something akin to Bretton Woods 2.0, but without any country being given a win button. And that's not so easy to devise!

The hard part is getting countries to agree on one system. Coming up with a good one is easy. You can either do EU style governance where countries vote on policy or go hands off and anchor everything to crypto.

	▲	JumpCrisscross 13 hours ago \| parent \| next [-]
		> hard part is getting countries to agree on one system To put it bluntly, America ended WWII with a global nuclear monopoly and then only industrial base on the planet that hadn't been bombed into smithereens. That put it in a unique position to set the terms of the peace. The only party that came out with any comparable leverage was the USSR on account of its massive army and willingness to maintain a wartime economy that would have been untenable in the democracies of the West. (Absent the USSR, it's again unlikely Bretton-Woods would have emerged–the Soviet threat created an incentive to coöperate.) More than that, the end of WWII saw American complete its then priority of decolonization. That meant there were lots of newly created countries, not quite peacefully but not at the level of violence that usually accompanies new-country formation (with obvious exceptions, e.g. Partition and Israel/Palestine), that could be wooed with riches and ideology.
	▲	cowlevel 12 hours ago \| parent \| prev [-]
		Why can't you just have many free floating currencies?

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corimaith 12 hours ago | parent | prev [-]

The alternative that was the ICU with an international reserve would punish surplus nations and help deficit nations. A Bretton Woods 2.0 thus would be advantageous to the US while neutralizing much of the advantageous the EU and China have as export based economies.