In the post-war decades, the USA acted as
the main engine of world growth, importing
more goods and services than it exported. The
resulting surfeit of dollars around the world
was the near-exclusive source of international
liquidity. The problem was that if dollar supply
was perceived as excessive, confidence in the
currency became weaker, and so did its gold
peg. After a succession of currency crises in the
late 1960s, the US government on 15 August
1971 unilaterally lifted the fixed peg between
the dollar and gold. The lifting of the gold
exchange standard discipline triggered an era
of uncontrolled printing of US dollars, leading
to quick inflation and effective devaluation
and the dollar had lost about 100 per cent of
its value against gold by 1972.