Chapter 10

The Petrodollar System

How a secret agreement between Henry Kissinger and the Saudi royal family created the foundation of American economic hegemony — and why it is now unraveling.

Veritas Worldwide · March 2026 · 1971–Present

On the evening of August 15, 1971, Richard Nixon appeared on national television and announced that the United States would no longer convert dollars to gold. The gold standard was dead.

The evening of August 15, 1971, Richard Nixon appeared on national television and announced that the United States would no longer convert dollars to gold at the fixed rate of $35 per ounce. With that announcement — made without consulting America's trading partners, in violation of the Bretton Woods Agreement signed in 1944 — Nixon ended the gold standard and unilaterally restructured the global financial system. The event is known as the "Nixon Shock." Its consequences are still unfolding today. [1] The Bretton Woods system, established at a conference in New Hampshire in July 1944, had made the U.S. dollar the world's reserve currency — but with a critical constraint. Every dollar in circulation was backed by gold at a fixed rate. Foreign governments could, at any time, exchange their dollar reserves for gold from the U.S.