# Nixon Shock The **Nixon Shock** was a set of economic measures [[Richard Nixon]] announced in a televised address on **August 15, 1971** — the most consequential of which **suspended the convertibility of the U.S. dollar into gold**. By "closing the gold window," Nixon unilaterally ended the core mechanism of the postwar Bretton Woods system, under which the dollar was fixed to gold and other currencies were fixed to the dollar. The package also imposed a 90-day wage-and-price freeze and a 10% import surcharge, but it is the break with gold that reshaped the financial system. Treasury Secretary John Connally captured the posture toward allies blindsided by the move: "the dollar is our currency, but it's your problem." The decision was driven by a balance-of-payments squeeze: foreign governments (notably France) were increasingly demanding gold for their dollars, and U.S. gold reserves could no longer cover the dollars in circulation. The temporary Smithsonian Agreement (December 1971) tried to patch the fixed-rate system; it failed, and by 1973 the major currencies were floating freely. The dollar became, and remains, a pure **[[Fiat Currency]]** — money backed by government decree and confidence rather than by metal. For the KB, the Nixon Shock is the **origin point of the modern monetary order** the right-wing money debate revolves around. Cutting the gold link gave the [[Federal Reserve]] far wider latitude over [[Monetary Policy]] — the discretionary money creation that the [[Austrian School]], the "[[Sound Money]]" movement, and gold-standard revivalists have attacked ever since as a license for inflation and debasement. It is the event "End the Fed" populism, [[Hard Money]] advocacy, and the Bitcoin-as-digital-gold pitch all implicitly date themselves from: the moment, in this telling, that the dollar was untethered from anything real. Whether 1971 was a liberation that enabled flexible crisis response or the start of a long erosion of the dollar's value is one of the cleaner fault lines between mainstream and hard-money economics. ## See Also - [[Fiat Currency]] - [[Gold Standard]] - [[Monetary Policy]] - [[Federal Reserve]] - [[Financial System Timeline]] - [[Financial System Hub]]