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The Bretton Woods Agreement (1944)

Although all nations wanted to buy American exports, the dollars had to leave the United States and be available for international use so that they could do so. In other words, the US should reverse the imbalances in global prosperity by presenting a trade deficit financed by FLOWS of US reserves to other nations (US financial balance deficit). The U.S. could have a financial deficit, either by importing, building facilities, or donating to foreign nations. Remember that speculative investments were discouraged by the Bretton Woods agreement. Importing from other nations was not attractive in the 1950s, as American technology was up to date at that time. This is how multinationals and global aid from the United States were born. [29] The gold standard`s support of money began to become a serious problem in the late 1960s. In 1971, the problem was so serious that U.S. President Richard Nixon said the possibility of turning the dollar into gold was suspended “temporarily.” The step was inevitably the last straw for the system and the agreement he sketched out….

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Deepak Kamboj

Deepak Kamboj is a Solution Architect and Technology Enthusiast, located at Redmond, WA, having 14+ years of hands on experience in the IT industry.

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