"It all ended on August 15, 1971, when Nixon closed the gold window and refused to pay out any of our remaining 280 million ounces of gold. In essence, we declared our insolvency and everyone recognized some other monetary system had to be devised in order to bring stability to the markets."Amazingly, a new system was devised which allowed the US to operate the printing presses for the world reserve currency with no restraints placed on it – not even a pretense of gold convertibility, none whatsoever! Though the new policy was even more deeply flawed, it nevertheless opened the door for Dollar hegemony to spread."Realizing the world was embarking on something new and mind-boggling, elite money managers, with especially strong support from US authorities, struck an agreement with Opec to price oil in US Dollars exclusively for all worldwide transactions. This gave the Dollar a special place among world currencies and in essence 'backed' the Dollar with oil."In return, the US promised to protect the various oil-rich kingdoms in the Persian Gulf against threat of invasion or domestic coup. This arrangement helped ignite the radical Islamic movement (Al Qaeda) among those who resented our influence in the region. The arrangement gave the Dollar artificial strength, with tremendous financial benefits for the United States. It allowed us to export our monetary inflation by buying oil and other goods at a great discount as Dollar influence flourished."This post-Bretton Woods system was much more fragile than the system that existed between 1945 and 1971. Though the Dollar/oil arrangement was helpful, it was not nearly as stable as the pseudo-gold standard under Bretton Woods. It certainly was less stable than the gold standard of the late 19th century."The agreement with OPEC in the 1970s to price oil in Dollars has provided tremendous artificial strength to the Dollar as the preeminent reserve currency. This has created a universal demand for the Dollar, and soaks up the huge number of new Dollars generated each year."Using force to compel people to accept money without real value can only work in the short run. It ultimately leads to economic dislocation, both domestic and international, and always ends with a price to be paid."The economic law that honest exchange demands only things of real value as currency cannot be repealed. The chaos that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of real value. We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil rather than Dollars or Euros. The sooner the better."