The Bretton woods system: how it all began

Date:

2018-03-17 17:26:12

Views:

319

Rating:

1Like 0Dislike

Share:

A Certain circle of experts knows that long before any of the Bretton woods system, on our planet there was a time the gold standard, when the pound sterling could be freely exchanged for gold. Britain in those days was a strong world power, therefore, could afford such operations. But everything changed in 1914, when the period of the 1st World war in the financial arena came the currency of the United States, which has spread in North and Latin America.

Bretton woods system

In 1922, was an attempt to create a reserve currency and a gold standard based on pre-war models. In 1925 England introduces the gold standard for the pound, backed by gold and the reserve currency (the USD). However, in 1929, in America, there was a collapse on the stock exchange, and in 1931 on the London financial market started to panic, which finally took the pound a secondary role after the dollar. In 1931, 1933 years in the UK and the USA  was accordingly abolished gold standard, i.e. currencies become floating, which served as the basis for future Forex systems. Attempts to create gold convertibility of the currencies of European countries have failed (in 1936, the collapse of the “Golden block", which included a number of countries, including France, Holland, etc.).

By the end of the forties of the 20th century due to the financial crises of the thirties and World war II in the world there is a need for radical renewal of the financial system. In this regard, in 1944, was convened the Bretton woods conference at which it was decided to peg the currencies of 44 countries to the dollar, and the dollar to gold at a rate of 35 dollars per Troy ounce (31,1034 grams). After World war II in the United States has focused the overwhelming majority of the world's supply of gold, which gave this country to world leadership. In December 1944 the Bretton woods system began its work.

Recommended

Insurance for pregnant women when traveling abroad: features, views, and reviews

Insurance for pregnant women when traveling abroad: features, views, and reviews

Currently, in our country there is a huge number of insurance companies that are willing to provide the necessary services at any time. Insurance expectant mothers – is a separate activity that SK are doing very reluctantly. The fact is that pr...

Construction company

Construction company "Rosstroyinvest": feedback from real estate investors. LCD "Old fortress". LCD "Golden domes"

One of the most promising participants in the Russian real estate market, particularly in the joint construction, is the "Rosstroyinvest". Reviews of investors are saying about the leading role of the construction company year of Foundation, in 2002,...

The conditions for obtaining credit in modern banking institutions

The conditions for obtaining credit in modern banking institutions

Any aspiring entrepreneur is faced with the problem of insufficient funding of their own business. Currently, this problem can be solved by knowing the terms of the loan and taking the necessary amount from the Bank. This method is best for solving p...

Bretton woods

At the conference, 1944, a resolution was adopted on the establishment of two organizations, which will exercise control functions and to provide countries-participants of the agreement funds for the stabilization of the national currency. It was the international monetary Fund and the international Bank for reconstruction and development. The Bretton woods system assumed that the final medium in international payments remains gold, national currencies are freely traded, that national currencies have solid courses to the dollar, and Central banks support this course (+- 1%).

Forex trading systemsBut by the mid-70's gold reserves have been reallocated to other financial centres (European, Asian), and thus was in violation of the theorem Triffin that the issue of currency must be compared with the gold reserves of the country that this issue has produced. The Bretton woods system began to lose its relevance, which intensified speculation, instability of foreign currency balances of the participating countries, the currency crisis of 1967. This creates the preconditions for change of the existing world monetary system, which the US supported for many years by force of arms, because the gold reserve equivalent to the emission of dollars, they have for many years.


Article in other languages:

AR: https://www.tostpost.com/ar/finance/4737-the-bretton-woods-system-how-it-all-began.html

BE: https://www.tostpost.com/be/f-nansy/8418-bretan-vudsk-m-s-stema-yak-use-pachynalasya.html

DE: https://www.tostpost.com/de/finanzen/8417-bretton-woods-system-wie-alles-begann.html

ES: https://www.tostpost.com/es/finanzas/8422-las-instituciones-de-bretton-vudskaya-sistema-c-mo-empez-todo.html

HI: https://www.tostpost.com/hi/finance/4742-the-bretton-woods-system-how-it-all-began.html

JA: https://www.tostpost.com/ja/finance/4739-the-bretton-woods-system-how-it-all-began.html

KK: https://www.tostpost.com/kk/arzhy/8420-bretton-vudskaya-zh-yes-barly-y-alay-bastaldy.html

PL: https://www.tostpost.com/pl/finanse/8422-bretton-vudskaya-system-jak-to-wszystko-si-zacz-o.html

PT: https://www.tostpost.com/pt/finan-as/8418-de-bretton-woods-vudskaya-sistema-como-tudo-come-ou.html

TR: https://www.tostpost.com/tr/maliye/8424-bretton-woods-sistemi-her-ey-nas-l-ba-lad.html

UK: https://www.tostpost.com/uk/f-nansi/8422-bretton-vuds-ka-sistema-yak-vse-pochinalosya.html

ZH: https://www.tostpost.com/zh/finance/5149-the-bretton-woods-system-how-it-all-began.html






Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

Comments (0)

This article has no comment, be the first!

Add comment

Related News

Advance report on the trip. Form expense report

Advance report on the trip. Form expense report

to account For funds that are issued to employees of the organization during trips or for other needs, use a special form. It's called "expense report for business trip". This document is a confirmation of the use of money. The ba...

Where to get a loan secured by real estate?

Where to get a loan secured by real estate?

the Prolonged crisis has forced people to increasingly turn over cash loans in banks and MFIs. Among the population less the percentage of those who banks consider positive and credible by customers – with “white&rdquo...

Insurance business risks: features, types and recommendations

Insurance business risks: features, types and recommendations

Even the most adventurous and daring entrepreneurs think that there is a possibility of some of the risks. The excitement is multiplied many times if the person engaged in the business of his life. In this article we will look at ...

The deadline for payment of VAT, the procedure of calculation and the possibility of obtaining benefits - everything you need to know entrepreneur

The deadline for payment of VAT, the procedure of calculation and the possibility of obtaining benefits - everything you need to know entrepreneur

aspiring entrepreneurs are always interested in the question of taxes, including VAT, calculation and payment. About this tax - VAT - and will be discussed in this article.VAT stands for value added tax. This tax is calculated as ...

Basic Foundations Of The Enterprise

Basic Foundations Of The Enterprise

  the Basic foundations of the enterprise – all financial values representing the means of production, which during the whole production process carry on parts of their value in the manufactured products. So the fixed a...

"Rosvoenipoteka": how to know which the amount in the account registration number?

Each soldier of the former Soviet army, knows firsthand how difficult it is to get housing to person who has put on epaulets. Years of standing in the housing queue and wandering around the garrison did not guarantee getting the c...