Dollar Glut

Summary of Dollar Glut

An excess of dollars in circulation outside the United States, over and above the quantity required for trade and normal financial transactions. This condition arose during the late 1950s and persisted through the early 1970s, largely as the result of persistent American payment deficits and foreign aid programs that exported dollars in large volumes. In 1971 President Richard Nixon suspended the automatic conversion of dollars into gold at the official level; the attendant devaluation of the dollar, plus a surcharge on imports, aided in overcoming the excessive dollar holdings abroad.

(Main Author: William J. Miller)