Dr. Atip Asvanundไทย
Money, Empire & the World's Reserve Currency

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10:41YOUTUBE

Summary

Bretton Woods made the dollar the world’s reserve currency and handed the United States what the French called an exorbitant privilege.

President de Gaulle answered by converting dollars into gold, at one point sending a warship to carry it.

The pressure accumulated until 1971, when Nixon closed the gold window and Bretton Woods ended.

Key points

  1. The privilege was real

    The issuer of the world’s reserve currency borrows more cheaply and runs deficits longer than anyone else can.

  2. The first challenge came from an ally

    France was on the same side throughout, which is exactly what made it hard to answer.

  3. The instrument was the system’s own rules

    De Gaulle broke nothing. He exercised the right of conversion the system granted, all the way to its limit.

  4. It ended on a promise that could not be kept

    The Nixon Shock was the admission that the gold reserve no longer covered the dollars already issued.