up due to the war in vietm and due to eentures on the greatocie anad ition at home ashe dolr came overluedbegan to suck in more imports and we began to exportess in relation impor so we nt into "balancef ade" deficit nally, in 1971 anthe third factor is the capital outows om the u.s.,hichontinued throughout the 1960s foinstment reasonsand fofinanciaows. scumache where a decade before ere had been an international dollarhortage, now the world faced a dollar glu this overwhelming supply of dollars piled up in the vaults of foreign central banks. these banks began to redeem dollars for 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