Gold Wars: the US versus Europe During the Demise of Bretton Woods

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After the collapse of Bretton Woods in 1971 several European central banks tried setting up a new gold pool to stabilize the price and move to a quasi gold standard. The US wanted to phase out gold from the system and enforce a dollar standard on the world.

What frightened the US was that Europe held the most gold and alluded to raising the gold price periodically to create liquidity, giving them the dominant means of creating reserves. Through its military presence in Germany, protecting it from the Soviet Union, the US was able to pressure the Germans not to cooperate with the gold pool. Without Germany the other European countries couldn’t materialize the pool and gold lost its anchor role in the monetary system. In the meantime, the US made a secret deal with Saudi Arabia to recycle oil dollars into US government bonds.

The United States didn’t manage to phase out gold from the system altogether, but it did succeed in establishing a global dollar standard which yielded them unprecedented power.
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Gold Wars: the US versus Europe During the Demise of Bretton Woods

Long read with numerous citations covering the history of gold, Bretton Woods and the petrodollar.