Last updated: 02/05/2016 04:33:43
Since the end of the Gold Standard in 1971, the United States has operated on a fiat currency, which is not backed by any precious metal or other commodity.
The end of the United States Gold Standard began in 1933 when President Franklin D.Roosevelt declared private ownership of gold to be illegal, except in the case of jewelry.
The Bretton Woods System, however, allowed foreign governments to continue to sell their gold to the United States Treasury at a price of $35 per troy ounce from it's inception in 1946 until President Richard Nixon ended the program in 1971, thus enabling gold to be traded at fluctuating market prices rather than the fixed price of $35 per troy ounce. This marked the end of the Gold Standard on a global level as no major economic system has employed the Gold Standard since that time.
Since the end of the Gold Standard in 1971, the United States has operated on a fiat currency, which is not backed by any precious metal or other commodity. This form of commerce allows for fluctuations in the global currency market that were not possible under the Gold Standard. Since the Gold Standard established a set amount of gold that could be purchased with a country's currency, it also set the value of that currency. By ending the Gold Standard, it opened the way for free markets.
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