WTF Happened In 1971?” focuses on the pivotal economic changes following President Nixon’s suspension of the dollar’s convertibility into gold, effectively ending the gold standard and marking a significant moment in modern economic history. This shift has been linked to rising inequality, soaring debt levels, and the growing influence of the financial industry, contrasting sharply with the economic stability and prosperity of the pre-1971 era. The narrative explores the Bretton Woods system, designed to regulate international trade by pegging currencies to the US dollar, which ultimately led to an imbalance favoring the US and resulted in tensions, particularly regarding gold reserves.
The summary leans into a clear “gold standard → fiat money → inequality” storyline. It’s a useful lens, but it needs to be complemented with energy-price dynamics, labor-market shifts, globalization, policy changes, and international comparisons to give a fully balanced picture.
While oil‐price spikes drove up costs across the board, the severity of inflation and output declines was amplified by loose money and delayed rate hikes—rather than the mere absence of a gold peg. For instance, the IMF finds that energy shocks alone cannot account for the magnitude of the ’70s stagflation without also considering policy reactionsIMF, and mainstream accounts emphasize how deficit spending on Vietnam‐era and social programs, paired with a Fed reluctant to choke off growth, fueled the inflation spiral