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Bretton Woods

The international monetary system established by the 1944 Bretton Woods Conference, in which the US dollar was pegged to gold at $35 per ounce and other major currencies were pegged to the dollar at adjustable but defended parities. The system functioned from 1944 to 1971, providing a period of exchange-rate stability that supported postwar reconstruction. It unraveled in the late 1960s as US balance-of-payments deficits grew, foreign dollar holdings outgrew US gold reserves, and confidence in convertibility eroded -- Nixon closed the gold window in August 1971 and the world moved to floating rates.

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