Why Richard Nixon torpedoed the global monetary system
The Story of Money
Manuela Saragosa
4.4 • 397 Ratings
🗓️ 3 June 2026
⏱️ 39 minutes
🧾️ Download transcript
Summary
A century ago, when depositors lost confidence in a bank, they’d rush to withdraw their cash. In 1971, US president Richard Milhous Nixon faced a similar dilemma. But his problem wasn’t ordinary citizens fearing for their savings. Instead, it was America’s closest allies who were nervously eyeing the dwindling supply of gold in Fort Knox at a time when the dollar’s value was tied to gold and allies’ currencies were in turn tied to the dollar. And just like a beleaguered bank manager of yore, Nixon chose to shut America’s doors to further withdrawals. His decision threatened to pull the plug on the entire international monetary system established at Bretton Woods in 1944. It was so unexpected and outrageous, it became known as the “Nixon Shock”. In the first of two episodes on the topic, hosts Gillian Tett and Robin Wigglesworth get the story from economist and ex-financier Jeffrey Garten – a man with a CV so long that he once even worked for the Nixon administration himself.
Further reading:
Three Days at Camp David: How a Secret Meeting in 1971 Transformed the Global Economy, by Jeffrey E Garten (2021)
Gold and the dollar crisis, by Robert Triffin (1960)
Credits: Getty Images, the Richard Nixon Presidential Library
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Hosts: Gillian Tett and Robin Wigglesworth
Producer: Laurence Knight
Executive Producer: Manuela Saragosa
Original music: Breen Turner
Broadcast engineers: Bianca Wakeman and Petros Gioumpasis
Podcast Development: Laura Clarke
Video editor: Kristen Kenyon and Josh Divney at Podcast Discovery
Learn more at www.ft.com/tsom or get in touch at thestoryofmoney@ft.com.
Read a transcript of this episode on FT.com
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Transcript
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| 0:00.0 | In 1955, for example, the U.S. had 165% more gold than it needed to redeem all the dollars outside the U.S. |
| 0:11.0 | But by 1970, 1971, it only had 25%. |
| 0:16.7 | There was a fear in the U.S., and actually in other countries too, that they would come to the U.S. say, |
| 0:22.9 | here are dollars we want gold, and the U.S. wouldn't be able to redeem it. |
| 0:27.1 | Germany alone had more dollars than there was gold in Fort Knox. |
| 0:31.2 | So, drum roll. |
| 0:32.2 | I have directed Secretary Connolly to suspend temporarily the convertibility of the dollar into gold. |
| 0:46.6 | Today, on the story of money... |
| 0:49.0 | What happens when the President of the United States of America makes a shocking unilateral decision to torpedo the entire post-war global economic order. |
| 1:00.0 | And nope, this time we're not talking about Donald Trump. |
| 1:03.0 | Let us take you back instead to 9pm East Coast time on the 15th of August, |
| 1:10.0 | 1971. US President Richard Milhouse Nixon is making a |
| 1:15.5 | surprise appearance on the major TV networks, elbowing aside the scheduled viewing of Bonanza. |
| 1:22.4 | That was then the biggest TV show in America at the time. American audiences had actually grown pretty used to these kind of unscheduled addresses. |
| 1:30.6 | Nixon typically used them to explain his latest moves in Vietnam, for example. |
| 1:34.3 | But this time, he had a very, very different subject on his mind. |
| 1:38.5 | The time has come for a new economic policy for the United States. |
| 1:43.6 | Its targets are unemployment, inflation and international speculation. |
| 1:48.1 | Unemployment and inflation are big concerns for American voters. |
| 1:53.1 | These are the early days of 1970s stagflation, and both are on the rise. |
| 1:59.2 | So Nixon lays out a radical set of new measures to tackle this stagflationary problem. |
| 2:06.0 | That's when inflation is really high and growth is stagnant. |
... |
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