Why Did Nixon End the Gold Standard | Milton Friedman

Milton Friedman explains why the dollar in your pocket has lost 85% of its purchasing power since 1971 — and it wasn't an accident. On August 15, 1971, President Nixon closed the gold window, severing the dollar from gold and handing the Federal Reserve unchecked discretion over the money supply. What was the Bretton Woods system, and why did its collapse matter more than almost any other economic event of the past fifty years? How did a single, unvoted decision on one Sunday evening reshape the value of every dollar you've ever earned? Milton Friedman walks through the balance-of-payments crisis that forced Nixon's hand, the secrecy at Camp David that kept markets from reacting in advance, and the arithmetic consequence that followed: a dollar today buys what fifteen cents bought in 1971. This video also breaks down why healthcare, housing, and college tuition have inflated far faster than electronics or clothing, what the k-percent rule was designed to fix, and why the financial industry has little incentive to explain any of this clearly. If you've ever wondered why your savings account never seems to keep up with prices, this is the explanation no one gave you in school. Do you think a rules-based monetary policy could actually work today? Or is central bank discretion here to stay? Let us know in the comments. Subscribe for more where economic history meets the questions that shape your financial future — new videos every week. Sources referenced: Milton Friedman, Capitalism and Freedom; Milton Friedman, Free to Choose; U.S. Bureau of Labor Statistics CPI data. milton friedman, economics, inflation, gold standard, federal reserve, monetary policy, nixon 1971, dollar purchasing power, bretton woods, economic history, personal finance, k-percent rule, stagflation, free to choose, capitalism and freedom #miltonfriedman #economics #Inflation #goldstandard #FederalReserve #monetarypolicy #Nixon #economy #personalfinance #investing #economichistory #dollarvalue #capitalism #FreeMarket #financialeducation