In Gold / 1971
A Sound-Money Calculator · The Pillar
1971: the year the dollar left gold
Everything on this site is downstream of one Sunday evening broadcast.
of the US dollar's value, gone — measured in gold — since August 15, 1971.
Gold was $40.62/oz that year. It is $4,043/oz today: 99.5×.
The system before
At Bretton Woods in 1944, the world's currencies were pegged to the US dollar and the dollar was pegged to gold at $35 an ounce. Only foreign central banks could actually redeem — Americans had been barred from owning bullion since 1933. The arrangement made the dollar the world's reserve currency on a simple promise: it was as good as gold.
The strain
The promise was broken quietly before it was broken publicly. Deficits from the Great Society and Vietnam multiplied dollar claims against a gold stock that did not grow. Through the sixties the London Gold Pool — eight central banks selling metal — defended the $35 line until it collapsed in March 1968, leaving a two-tier market: an official price for governments, a truthful one for everyone else. France, on Jacques Rueff's advice, sent ships for its gold. By the summer of 1971, the run on the window was open.
August 15, 1971
On a Sunday evening, interrupting Bonanza, Nixon announced a 90-day wage and price freeze, a 10% import surcharge, and — in a sentence built to sound technical — the closure of the gold window: the United States would "suspend temporarily the convertibility of the dollar into gold." Temporarily. The window never reopened. The Smithsonian Agreement that December repriced gold to $38, then $42.22 in 1973, and by March 1973 the pretence of fixed parities was abandoned altogether. Americans were finally permitted to own gold again on December 31, 1974 — at a market price already three times the old peg.
The receipts
Run the site's own engine on the year the anchor was cut. $100 in 1971 bought 2.46 oz of gold at $40.62/oz. Today:
| Measure | $100 from 1971, today | Multiple |
|---|---|---|
| Official story — CPI | $827 | 8.3× |
| Money created — M2 | $3,418 | 34.2× |
| In gold — honest weight | $9,954 | 99.5× |
The price of gold didn't get more expensive. The value of the dollar fell — and the three rulers stopped agreeing the moment the anchor was cut. Wages, house prices, savings: everything measured in dollars after 1971 is measured with a shrinking ruler.
Why it matters now
Every debasement figure on this site that begins in 1971 — the year page, the entire Australian series — measures the consequences of that single decision. The half-century since is the first experiment in history in which every major currency floats against nothing. The results are on the year pages, one year at a time.
Continue: $100 in 1971 · the 1980 crescendo · the Australian story · methodology.
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