For over a century, the dollar has evolved, always adapting to the changing demands of the global economy. When one era ends, as it did for the gold-backed dollar in 1971, a new chapter begins.
President Nixon severed the dollar's link to gold in 1971 to among other things, protect shrinking gold reserves. The markets were thrown into a frenzy. Nations across the world were forced to reassess their economic strategies. The U.S. explored new avenues to maintain dollar hegemony. The fall of the gold standard gave way to the rise of the “petrodollar” in 1974, whereby oil sales were conducted in dollars – helping to cement the U.S. dollar as the world’s reserve currency.
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