On August 15, 1971, President Nixon closed the gold window, ending dollar convertibility. This was not a sudden collapse but the culmination of structural pressures that made the peg unsustainable.

Key mechanics of the breakdown:

Foreign dollar holdings exceeded U.S. gold reserves by a widening margin — by 1971, foreign central banks held roughly $40 billion in dollar claims against only $10 billion in U.S. gold.
Inflation from Vietnam War spending and Great Society programs eroded confidence in dollar purchasing power.
Speculative attacks forced countries like France to redeem dollars for gold, draining U.S. reserves.

Year	U.S. Gold Reserves	Foreign Dollar Claims	Coverage Ratio
1950	$22.8B	$8.0B	285%
1960	$17.8B	$18.7B	95%
1971	$10.2B	$40.0B	26%

The Nixon Shock transitioned the world to fiat currency, but the dollar retained its reserve status through petrodollar arrangements and U.S. Treasury market depth.