“This is the gold standard” is still widely used nowadays, but many people don’t realize its irony. Fifty-four years ago, humankind started a global economic experiment.

In 1944 after world war 2, an agreement was made between 44 nations to enable the convertibility of their currencies to the dollar with the promise of having gold backing it. That agreement lasted until 1971 when former US President Richard Nixon responded with a series of measures known as the Nixon Shock in response to a domestic economic crisis. Among these measures was the end of the dollar's convertibility, meaning that other nations couldn’t redeem gold for the dollars they had anymore.

The French used to call the Bretton Woods system "America's exorbitant privilege" as it resulted in an "asymmetric financial system" where non-US citizens "see themselves supporting American living standards and subsidizing American multinationals." After the great depression of 1930, the US government became much more inclined to intervene in the economy to increase economic well-being and avoid social unrest. After all, they had control over issuing new dollar supply.

In 2025 we see a continuation of the same trend after the global pandemic, where the American federal reserve printed money at a pace never seen before, effectively exporting inflation to countries holding dollar reserves while protecting its local economy. Once more the American government tries to protect its economy with the tariffs, but will it have the intended effect?

The image below is one of many you can find on the wtfhappenedin1971.com website picturing many observed effects of the end of the gold convertibility. How much of a causal relationship between those events can be arguable, but all of them in conjunction make for a compelling argument that some relationship must exist.