The failure to realign currency values in the face of fundamental eco-
nomic change spelled the beginning of the end for the gold exchange stan-
dard of the Bretton Woods agreement. By the late 1960s the foreign dollar
liabilities of the United States were much larger than the U.S. gold
stock. The pressures of this “dollar glut” finally culminated in August
1971, when President Nixon declared the dollar to be inconvertible and
provided a close to the Bretton Woods era of fixed exchange rates and
convertible currencies.