by James Rickards
Daily Reckoning
Before 1914, the global monetary system was based on the classical gold standard. But over the past century, monetary systems change about every 30 to 40 years on average.
Sure enough, 31 years after the end of the classical gold standard, in 1945, a new monetary system emerged at Bretton Woods. The dollar was officially designated the world’s leading reserve currency — a position that it still holds today.
Under that system, the dollar was linked to gold at $35 per ounce. But 25 years later, in 1971, Nixon ended the direct convertibility of the dollar to gold. For the first time, the monetary system had no gold backing.
Today, the existing monetary system is nearly 50 years old, so the world is long overdue for a new monetary system.