ABSTRACT
In a fundamental sense, the international monetary crisis precipitated by President Nixon’s announcement of his ‘new economic policy’ on August 15, 1971 has been on the cards for at least as long as since 1958, when Professor Robert Triffin of Yale began to warn his academic and official colleagues of the dangerous instability of the IMF system of organizing international currency relationships. But the focal point for a potential crisis has changed over the intervening period, with the evolution of techniques for and the practice of international monetary co-operation among the leading countries. Moreover, while the focal point of the current crisis – the relative exchange values of other major currencies against the dollar – was predictable for at least five years in advance, most harbingers of gloom, including myself, predicted that the crisis would be precipitated by other countries exasperated with the behaviour of the dollar rather than by a U.S. Administration exasperated with the behaviour of other countries. Further, those in the United States, again including myself, who had been advocating for approximately a decade that the United States should take the action on the international monetary front that President Nixon has in fact taken – i.e. demonetization of gold in the United States, or more accurately ‘de-dollarization’ of gold – never intended that action to be accompanied by threats, coercive measures, and a major retreat into protectionism.
