- Wikipedia: Bretton Woods System
Representatives of 44 countries participated in the conference in Bretton Woods, New Hampshire, where a future monetary system was agreed:
- All participating countries agreed fixed exchange rates to the US Dollar, and
- in return, the us Federal Reserve committed to exchange dollars for Gold at a fixed rate of $ 35 per ounce for all participating Central Banks.
- The International Monetary Fund (IMF) was created to ensure the functioning of the system.
The gold price in US dollars was thus fixed for decades.
The result of the Bretton-Woods conference was the outcome of an ongoing power struggle between Great Britain and the United States. The power relations of both states, which were already in favor of the USA, were decisive. (See book “the Summit” by Ed Conway-Little Brown, 2014)
The Bretton Woods System was a great victory for the US MoneyMonarchy. The fact that the whole western world, oriented the value of its national currency to the value of the dollar, is considered the beginning of the world power of the US dollar.
In particular, it should be avoided that there was a run-down between nations, as in the phase between the first and second world war,
Low-performing economies, however, always give a devaluation the opportunity to resolve social problems in the country. For pure domestic trade the ratio to the Dollar is unimportant.
The peg to the dollar forces the participating economies to think in the direction of internationalization. It is the beginning of globalization.