Why did France, under Charles de Gaulle, famously challenge the Bretton Woods System in the 1960s?
Show answer and explanation
Correct answer: They began converting dollar reserves into gold to protest U.S. 'exorbitant privilege'
France argued that the U.S. was using the dollar's status to finance its foreign wars and corporate takeovers for free. By demanding gold for their dollars, France highlighted the fragility of the U.S. gold reserves.
Keep practicing
More Bretton Woods System questions
- Following the collapse of the Bretton Woods exchange rate system in 1973, most major currencies moved to:
- What is the primary difference between the World Bank and the IMF?
- In the Bretton Woods era, what was the primary reason for 'capital controls' (restrictions on moving money in/out of a country)?
- The 'Special Drawing Right' (SDR) was created by the IMF in 1969 to:
- Which of the following was a key reason for the U.S. support of the Bretton Woods System?
- The 'Smithsonian Agreement' of 1971 was a failed attempt to: