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US Dollar and Gold

In July 1944, 44 countries sat together and drafted the infamous Brenton Woods Agreements. The unique features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate of its currency within a fixed value - plus or minus one percent in terms of gold.

On 1971-08-15, as the United States's economy was in trouble due to the Vietnam War, making itself impossible to act in accordance to the defined Brenton Woods system, the exchange of dollars on gold was terminated. The impact is that US dollar became the "reserve currency" - a currency which is held in significant quantities by governments and institutions as part of their foreign exchange reserves, it is also the international pricing currency for products traded on a global market namely the commodities products such as oil, gold etc.