Over three days at a top secret meeting at Camp David—from August 13 to 15, 1971—President Richard Nixon and his brain trust sat down to decide the fate of the dollar. What they did changed the course of history.
Since 1944, all national currencies had been valued against the U.S. dollar, which itself was convertible to gold at a fixed rate. It was a system that fueled the phenomenal recovery of Western Europe and much of East Asia from the ashes of war, together with an unprecedented expansion of middle-class prosperity in America. Yet the U.S. gold supply was dwindling dramatically, and the group at Camp David felt compelled to sever the link between the dollar and the precious metal, sending the global economy into a tailspin and creating shock waves throughout America’s most important alliances. In so doing, Nixon and his team were signaling that the United States was no longer rich and powerful enough to hold up the free world economically and militarily, and that it needed help from its democratic partners.
Then, as now, the pressures of globalization were bearing down on America, and nationalism and protectionism were on the rise. Then, as now, Washington was seeking a fairer trading system and imploring its allies to spend more on their own military defense. Then, as now, America was asking whether the cost of global leadership was too high, and its citizens were simultaneously demanding much more attention to problems at home, including unemployment, health care, and civil rights.
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 and investment across borders, leading to four decades of continued global economic growth. In addition, after the Camp David meeting, Nixon successfully leveraged the crisis, which he himself had created, to strengthen political alliances and international economic cooperation.
Three Days at Camp David takes us into the room where the decision was made to untie the dollar from gold, bringing to life the backgrounds and mind-sets of the men around the table. Based on extensive research and interviews with many participants at the Camp David meeting, and informed by his own insights from his hands-on experience in Washington and on Wall Street, plus his teaching at Yale, Garten has written the definitive record of a critical historical turning point, with significant implications for America in the years ahead.