It was August 13, 1971, and President Richard Nixon realized that the United States’ economic power was being challenged like never before. The biggest shift in economic policy since WWII was at hand, the effects of which remain with us today…  

 

“On this day [Friday August 13, 1971], the administration was preoccupied with ending the Vietnam War, critical diplomacy from China and Russia, and potential conflicts between India and Pakistan and between Israel and Egypt.  The administration also faced intractable inflation, rising unemployment, [and] deteriorating balance of payments.” (Garten 168).

 

Following the weekend in mid-August, 1971, during which Nixon and his key advisors met at Camp David, the U.S. effectively abandoned the policy of fixed-currency exchange rates and the gold-dollar connection at $35 U.S. per ounce.  “Then, as now, the pressures of globalization […], nationalism and protectionism were on the rise [… and] Washington was seeking a fairer trading system.  In abandoning the gold-dollar connection, the Nixon administration opened the way for a highly volatile and crisis-prone world economy.  But at the same time, it ushered in an era of enormous expansion of trade across all borders, leading to four decades of continued global growth” (Garten).   

 

Jefferey Garten’s book, Three Days at Camp David, does not require a great deal of knowledge “about economics, finance and trade to read and understand this story” (Garten 15) and yet he does a remarkable job of helping us contextualize the 50-year shadow of inflation issues and trade tensions taking place today.  

 

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Click above to order your own copy of Garten’s fascinating work, compliments of the Johnson, Johnston and Macrae Investment Group