anthe ird factor is the capital outflows omhe u.schontinued throughout the96foinstment reasonsand fofinancial owsumache where a decade before there had en an internationa dollarhortage, now the world faced a dollar glu this overwhelming supply of dollars piled up in the vaults of foreign central banks. these banks gan to redeem dollars r american gold. between 1964 and 1966, u.s. gold reserves dropped by $2 billion. the u.s. really d not know what to do about the dollar in the late 1960s, and the europeans didn't know either. we had a fixed exchange rate system. it was part of our reality -- it was part of our economic philosophy and ideology and religion. and what the u.s. wanted for a long time was not a devaluation of the dollar, but a revaluation of other currencies. well, this was politically and economically difficult and unacceptable for other countries, so we were in a logjam. we were really in a block that we didn't know how to get out of. schoumacher: the united states pressured foreign central banks to retain their dollars. the government also tried to restrict the amount of money inve