Читать книгу Financial Cold War. A View of Sino-US Relations from the Financial Markets онлайн

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The better known of these financial shocks was the suspension of the dollar's convertibility to gold in 1971. This effectively brought an end to the Bretton Woods system.

Though the US had been running a current account surplus of around one percent of GDP throughout the 1950s, it was running an overall balance of payments deficit due to the flow of American capital into investments overseas. By the latter part of the decade, foreigners saw that the dollar was overvalued and began to exercise their rights to convert their dollar holdings into gold. Between the end of 1957 and the end of 1959, US gold reserves fell by around 15 percent. Fears of inflationary government spending under a Kennedy presidency led to a further nine percent decline in US gold reserves in 1960.ssss1 In short, more and more dollars were being backed up by falling reserves of gold.

When the London gold price jumped to almost $40 per ounce in October 1960, the Federal Reserve and the Bank of England were forced to intervene to bring the dollar back in line with the official exchange rate of $35. Thereafter, the US undertook a number of measures to stem the balance of payments deficit and discourage the outflow of dollars. These included the IET to discourage American purchases of foreign securities; the issue of Treasury bonds in foreign currenciesssss1 to discourage Europeans from calling in gold; and coercion of European allies to help stabilise the value of the dollar.