Bretton Woods Cassandra

Abstract In 1951, Robert Triffin became a professor at Yale. By the end of the 1950s, Triffin became more and more worried about the international reserve position of the United States due to the country’s gold losses and the increase in dollar liabilities. In his view, the continued deterioration in the US net reserve position would undermine foreigners’ confidence in the dollar as a safe medium for reserve accumulation. So, the gold exchange standard was not sustainable, as argued in his famous dilemma. Triffin thus established his reputation as the Cassandra who predicted the end of Bretton Woods. However, he was an optimistic Cassandra. He sought a more international solution for the world liquidity problem, a true internationalization of the foreign exchange component of the world’s international reserves. This chapter also pays attention to life in Yale and Triffin’s reaction to the Vietnam War.