Ever since the establishment of the financial institutions of the Bretton Woods system in 1944 the US dollar has been used as the world's principal reserve currency and allowed the US government to operate at a deficit with limited consequences. After years of deficit spending the Nixon Shock in 1971 ended the convertibility of US dollars to gold, and after the floating of the US dollar 1973 left it unsupported by a fixed exchange rate, the US needed another monetary system to bring stability to the markets. They achieved this when Saudi Arabia agreed in 1974 to price their oil exclusively in US dollars in return for military equipment and protection.