>what exactly would happen as a consequence to the US?
It would trigger a loss of faith in the US and USD. Which could get really spicy given that the US relies on reserve currency status to keep things steady despite comparatively high debt/gdp
Hard to tell what would happen but I suspect its borderline enough that nobody sane wants to find out
Can you provide some references to them doing this the first time? You seem to like posting comments about the "Nixon shock" without providing anything to back it up.
Sorry — I thought this was well known. Until 1971 a united states dollar was an IOU for a certain amount of gold. The US cheated by printing more IOUs than the amount of gold it had. When foreign countries started withdrawing gold at a rate the US thought it would run out, in 1971, it cancelled all IOUs and kept the remaining gold for itself.
So you're referring to the end of the Bretton Woods System, which is its formal name.
> The US cheated by printing more IOUs than the amount of gold it had.
From the article you posted, it looks like the US was dealing with an issue whereby their reduction in global output meant that a reducing demand for dollars could cause a run on gold. I don't know if I would characterise this as "cheating" per se. The article states that there were many efforts, jointly between the US and other countries, to maintain the system, but these ultimately failed.
So I don't really get how this backs your claim that the US cheated? Sure it was controversial, and I'm sure there were many peoole who were unhappy about it, but it looks like they had little choice, given the system was failing and they were dealing with an extraordinary inflation crisis to boot.
If you've only printed enough dollars for the amount of gold you have, a run is no problem because you can exchange as much gold as people want. Gold and dollars can be allowed to be freely exchanged, no matter what. If you've cheated by printing more dollars than you have gold, then you have a problem.
