Sunday, August 15, 1971. It is 8 o'clock in the evening, television prime time. Suddenly the president appears on the screen, tense and unsmiling as ever, and makes a three-point announcement: The gold window will be closed, a wage-and-price freeze will be imposed, and a blanket 10 per cent surcharge will be levied on imports — all to take effect immediately. The world is stunned. Almost instantly the shock waves cross the globe. A dazed fapan cries out against what it calls — in a memorable phrase — the “Nixon shokku.”

History has few examples of such a blitz-like turnabout and of such blatant disregard of promises and commitments publicly made and of international obligations solemnly undertaken. The twenty-six-year-old Bretton Woods agreement was cast overboard without the least qualm; the dollar, which for all those years had enjoyed the privileges of the world's foremost reserve currency, was delinked unilaterally from gold and set afloat.