Why did Nixon leave the gold standard?

After WWII, the Bretton Woods system was established in which all currencies were fixed in relation to the US dollar, which was in turn fixed to gold at a price of $35 per ounce. By 1971, the US had printed so much money in order to fund military spending, foreign aid, and outside investments, that it no longer had enough gold to back up the dollar. This lack of gold-backing led to the dollar being overvalued which in turn created trade imbalances. In order to solve this, Nixon severed the ties to the gold standard in 1971.

 

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