us currency stopped being backed by gold in 1971.
us currency stopped being backed by gold in 1971.
when did the us currency stop being backed by gold?
1971
the dinar was introduced into circulation in 1932, by replacing the indian rupee, which had been the official currency since the british occupation of the country in world war i, at a rate of 1 dinar = 11 rupees. the dinar was pegged at par with the british pound until 1959 when, without changing its value, the peg was switched to the united states dollar at the rate of 1 dinar = 2.8 dollars. by not following the devaluations of the us currency in 1971 and 1973, the dinar rose to a value of us$3.3778, before a 5 percent devaluation reduced the value of the dinar to us$3.2169, a rate which remained until the gulf war, although in late 1989, the black market rate was reported at five to six times higher than the official rate.
iraqi dinar
to reduce profiteering from currency arbitrage, the u.s. military devised the mpc program. mpcs were paper money denominated in amounts of 5 cents, 10 cents, 25 cents, 50 cents, 1 dollar, 5 dollars, 10 dollars, and starting in 1968 20 dollars. unlike us currency, these certificates were issued under the authority of the department of war (later department of defense) rather than the department of the treasury. consequently they do not bear the us treasury seal found on virtually every example of us currency. mpcs were fully convertible to u.s. dollars upon leaving a designated mpc zone, and convertible to local currencies when going on leave (but not vice versa). because they were and are not obligations of the us treasury, they are (unlike all us currency) no longer redeemable. it was illegal for unauthorized personnel to possess mpc, and that policy, in theory, eliminated u.s. dollars from local economies. although actual greenbacks were not circulating, many local merchants accepted mpc on par with us dollars, since they could use them on the black market. this was especially evident during the vietnam war when the mpc program was at its zenith. to prevent mpc from being used as a primary currency in the host country and destroying the local currency value and economy, mpc banknote styles were frequently changed to deter black marketers and reduce hoarding. a "conversion day" or "c-day" was the soldiers' only chance to trade in their old mpc for the new issue, after which the old mpc became worthless.
military payment certificate