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End of the gold standard
Before Aug. 15, 1971, foreign investors and central banks could buy gold from the U.S. government for $35 per ounce. On that day, Nixon ended this gold standard, and the government no longer traded its gold for dollars.
Part of the reason Nixon did this was the feds wouldn’t be able to give every dollar-holding foreigner enough gold if they all wanted to trade in their dollars at the same time, according to Businessweek.
Without gold suppressing the number of dollars the U.S. can print, the Federal Reserve has been able to make more dollars at a faster pace than before.
In August 1971, the monetary base ($69.89 billion) was more than five times what it was 40 years prior, according to Federal Reserve economic data. Forty years after the gold window closed, the monetary base had grown by more than 37 times. The Consumer Price Index in August 1971 was about 2.5 times what it was 40 years prior. And 40 years after 1971, the index has grown by more than 5.5 times.