- Financial Survival Network
- Posts
- From Bretton Woods to Banking Crises with Alasdair MacLeod
From Bretton Woods to Banking Crises with Alasdair MacLeod
Alasdair McLeod brilliantly explains the financial history required to know why things are now careening off the rails.
by Dr. Chris Martenson Chris Martenson’s Peak Prosperity
In this week’s Off The Cuff interview, Alsadair MacLeod and I dive into the topic of Bretton Woods, a financial mechanism that, for a time, seemed as unbreakable as Fort Knox. Initially, the U.S. was sitting atop a mountain of gold, roughly 26,000 tonnes if memory serves. This stockpile not only instilled confidence, but it was the bedrock of global finance.
Yet, as with all things, human mismanagement took its toll.
Wars, from Korea to Vietnam, alongside trade deficits, particularly with a booming Germany, saw the US’s gold reserves dwindle. The London Gold Pool of the 1960s, established as a lifeline for the dollar, eventually succumbed to the same pressures. Notably, France grew weary of the dollar’s hegemony, signaling a preference for tangible gold over the greenback. This cascade of events culminated in a crisis in 1971 when the U.S. gold reserve plummeted to a mere 8,500 tonnes, prompting President Nixon to ‘temporarily’ suspend the Bretton Woods agreement. It remains suspended to this day.