u.s. economyas heating up due to t war in vietm and due to eentus on treatociety anweadtionhomeasheolr camered we begano suck mompor anwe began to exrtess inelation imporso we wentntoalanceade" deficit finally, in 1971 anthe ird factor is the capital outflows omhe u.schontinued throughout the96foinstment reasonsand fofinancial ows. scumache 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