A System Under threat
The Bretton Woods scheme was largely responsible for “the 27 glorious years” of capitalism, an era in which the greatest economic growth in human history was achieved up to that point, along with levels of welfare and equity that had never been known before, nor would ever be seen again. But in the 1970s the system began to crack.
The new monetary standard had caused the demand for dollars, which were a substitute for gold, to grow worldwide. This progressively increased its value, which was a problem for US trade. In a context of stagflation, President Richard Nixon decided to devalue. From $ 35 an ounce, it went first to 38 and then to 42.