Roosevelt's New Deal: breaking the restriction of gold on money, issuing a large number of money, stimulating the economy, and implementing monetary easing policy. In this way, the government or the Federal Reserve can have more money to lend to enterprises and individuals in need to help the economy recover.

1971August, the Nixon administration abandoned the "gold standard" of the US dollar and implemented the free floating of the gold and the dollar exchange rate. This shows that the foundation of the Bretton Woods system has been completely lost. The United States can realize the function of using the US dollar as the world currency, and the US dollar can be issued indefinitely. As long as the US government is willing, the rest of the world will pay for the depreciation of the US dollar, and the US can also enjoy the benefits brought by the US dollar.

2. The reasons are different:

Roosevelt's New Deal was Keynesian, which used government purchase to make up for the market shortage. The government has to print money to do this, and the gold standard limits the amount of money printed by the government. The two contradicted each other, so the gold standard was abolished.

197 1 year, American gold reserves could no longer support the increasingly rampant dollar, and the Nixon administration was forced to announce in August this year that it would abandon the "gold standard" of exchanging gold at the official price of $35 per ounce and implement the free floating of the gold and the dollar exchange rate.

Extended data:

The operation of the Bretton Woods monetary system is closely related to the credibility and status of the US dollar. In the 1960s and 1970s, the United States was mired in the Vietnam War, with a huge fiscal deficit and deteriorating international income. The credibility of the US dollar was greatly impacted, and several US dollar crises broke out. A large amount of capital fled, and countries sold dollars and snapped up gold, which greatly reduced the US gold reserves and led to the skyrocketing price of gold in London.

In order to curb the price increase of gold, maintain the exchange rate of the US dollar and reduce the loss of gold reserves, the United States and eight countries including Britain, Switzerland, France, West Germany, Italy, the Netherlands and Belgium established a gold pool on June 196 10, and the central banks of the eight countries each took out $270 million in gold, which was in the charge of the Bank of England.

In the late 1960s, the United States further expanded its war of aggression against Vietnam, the balance of payments further deteriorated, and the dollar crisis broke out again. In the first half of March 1968, the outflow of US gold reserves exceeded $654,380.4 billion. In March 14 alone, the trading volume of the London gold market reached a record figure of 350-400 tons.

The United States is no longer able to maintain the official price of gold. After consulting with members of the Ministry of Gold and Finance, it announced that it would no longer supply gold to the market at the official price of $35 per ounce. The market price of gold fluctuates freely, but the government or the central bank still settles at the official price. Since then, gold has begun the stage of dual price system.

But the dual-price system also lasted for three years, because the balance of payments in the United States was still deteriorating and the dollar was unstable; Second, western countries are dissatisfied with the self-interest principle of the United States, refuse to depreciate despite the dollar crisis, and forcibly maintain a fixed exchange rate. So some European countries have adopted the strategy of inviting you into the urn. Because the United States refused to raise the price of gold and the depreciation of the dollar, they exchanged dollars for American gold reserves.

When it was reported in August 197 1 that France and other western European countries wanted to exchange dollars for gold in large quantities, the United States had to announce on August 15 that it would stop fulfilling its obligation to foreign governments or central banks to exchange dollars for gold in the United States. 19711February marked by the Smithsonian agreement, the dollar depreciated against gold, and the Federal Reserve refused to sell gold to foreign central banks. So far, the system of linking the dollar to gold exists in name only.

The depreciation of the US dollar in March 1973 once again triggered a wave of selling US dollars and snapping up gold in Europe. The foreign exchange markets in western Europe and Japan had to be closed for 17 days. After consultation, an agreement was finally reached, and western countries abandoned the fixed exchange rate system and implemented the floating exchange rate system. At this point, the Bretton Woods monetary system completely collapsed and the reform process of non-monetization of gold began.

However, it was not until 1976 that the international community reached the "Jamaica agreement" with the legalization of floating exchange rate and the non-monetization of gold as the main contents. From the legal point of view, the non-monetization of gold in the international monetary system was not formally defined until 1978. The International Monetary Fund approved the revised agreement of the International Monetary Fund by a majority of 1978.

The agreement deleted all the previous clauses about gold, and announced that gold would no longer be used as the standard of currency valuation, the official price of gold would be cancelled, and gold could be bought and sold freely in the market;

Cancel the requirement that the International Monetary Fund (IMF) must pay in gold; Sell the 1/6 gold of the International Monetary Fund, and the profits will be used to establish preferential loan funds to help low-income countries; Set up special drawing rights instead of gold for some payments between member countries and IMF, and so on.

After the collapse of the Bretton Woods system, the International Monetary Fund and the World Bank still exist as important international organizations and play an important role.

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