Homepage / Bullion Investment Basics: Bullion Glossary / B - Bretton Woods


Buy Gold PAMP Suisse Bullion Bars



Bretton Woods
System of Monetary Management



The Bretton Woods System created an exchange for pegging international currencies to the U.S. dollar, which was pegged to the price of gold at $35.00 a troy ounce

Bretton Woods is the name of a resort town in New Hampshire, where the International Monetary Conference was held in July of 1944.

gold and money

The conference consisted of 730 delegates from all 44 WWII Allied nations for the United Nations Monetary and Financial Conference. 

The delegates deliberated from July 1st through the 22nd in 1944 and signed the Agreement on its final day.

The result of the Bretton Wood Conference is that it officially linked the US Dollar to gold at $35 per troy ounce, its gold parity since 1934.

All other currencies were linked to the Dollar at fixed exchange rates, which meant that they were linked to gold as well. The Japanese Yen was 360 per Dollar, year after year. (360*35=12,600 per ounce.)

The planners hoped to avoid a repeat of the debacle of the 1930s, when the United States, as a creditor nation, insisted on repayment of allied war debts from World War I.

Combined with the threat of isolationism, this led to a breakdown of the international financial system and a worldwide economic depression.

Governments of the 1930s used currency devaluation policies to increase the competitiveness of a country's exported goods.

They did this to reduce their growing deficits; instead, it worsened other nations' monetary systems, which caused plummeting national incomes, shrinking demand, mass unemployment, and an overall decline in world trade.

bretton woods nh

The Bretton Woods system of monetary management established the rules for commercial and financial relations among the world's major industrial states after World War II.

The system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent nations.

Those attending the conference set up a system of rules, institutions, and procedures to regulate the international monetary system, establishing the International Monetary Fund (IMF) and the World Bank.

After ratification in 1945, these organizations became operational.

The chief feature of the system was an obligation for each country to adopt a monetary policy that maintained the exchange rate by tying its currency to the U.S. dollar's value to the price of gold.

The IMF was established to bridge temporary imbalances of payments.

By the early 1960s, the value of the U.S. dollar was overvalued against gold and the system of fixed exchange rates.

In the 60's, there was a sizable increase in U.S. domestic spending from the Vietnam War and President Lyndon B. Johnson's "Great Society" programs of Medicare, Medicaid, and LBJ's "War on Poverty."

These policies gradually decreased the value of the U.S. Dollar against gold, causing currency markets to become greatly unbalanced.



Buy Gold PAMP Suisse Bullion Bars



gold bullion

The End of the Bretton Woods System

On August 15, 1971, President Nixon unilaterally announced a temporary suspension on the convertibility of the dollar to gold.

An attempt to revive the fixed exchange rates failed, and by March 1973, the major currencies began to float against each other.

As a result, the Bretton Woods system officially ended, and the U.S. dollar became a 'fiat currency,' backed by nothing but the guarantee of the government of the United States.

The 1971 event is known as the "Nixon shock" and the official end of the gold standard, which made the United States dollar the reserve currency for the member states.

Since the collapse of the "Gold Standard," IMF members have been free to choose any form of exchange arrangement they wish except when governments peg their currency to gold.

This allows currencies to float freely, pegging one currency to another or a basket of currencies adopting the currency of another country participating in a currency bloc, or forming part of a monetary union.

Examples of the last sentence would be equal to the European Union and the future wishes of the BRICs economic union.





Sources: Bretton Woods System

Library of Economics & Liberty - AUDIO: Benn Steil on the Battle of Bretton Wood

Creation of the Bretton Woods System - Federal Reserve History


BullionVault - How Did Bretton Woods Work?

Daily Reckoning - The Dollar Will Die with a Whimper, Not a Bang
- by James Rickards





Other pages, on this Guide, that you
may like...













SD Bullion

Bretton Woods

Establishing the Gold Standard of the

20th Century

Bretton Woods



Johnson Matthey

Bullion Refiner

Johnson Matthey

SilverGoldBull




Walmart












Home Page

FBIG - Home Page Screenshot

with Bullion Market News






Royal Mint


Bretton Woods



Visit  the Bullion Glossary page


or

For Bullion Market News...


Visit the Homepage







Free Bullion Investment Guide







Free-Bullion-Investment-Guide "Search"
search engine by freefind advanced


Search - Magnify Glass






Free Bullion Investment Guide



Rexing 55% OFF Sale




Free Bullion Investment Guide



search

   Search the Guide

search engine by freefind advanced




recent guide updates

Daily

Bullion News on the Homepage



July 2024

Newsletter




2023

Austrian Philharmonic Silver bullion coin

Mintage Figures




2023

Gold Austrian Philharmonic bullion coin

Mintage Figures




2023

Austrian Philharmonic Platinum bullion coin

Mintage Figures




Re-written

The Royal Mint &
United Kingdom Bullion Coins

Royal Mint - The Original Maker



Updated

Financial Links

for the

Bullion Investor

Links



Updated

Numismatic & Bullion Auctions page

Auctions page - Going, Going...



Updated

Gold Sovereigns

2024 Full Gold Sovereign - King Charles
2024 Full Gold Sovereign - King Charles - reverse side





Archangel Raphael
~
The Angel of Healing

ArchAngel Raphael - 05



Cancer Awareness Information & Resources

July - Sarcoma Cancer Awareness Month Ribbon with FBIG Gold-Nano Logo



Help Us Expand our Audience by forwarding our link

www.free-bullion-investment-guide.com.

Thank You!



June's

Best News

2024 Central Bank Gold Reserves Survey - World Gold Council

REPORT: Monthly Gold Compass - June 2024 - incrementum

Hyperinflation or Deflation? Or, Rome vs. USA '24 - Bullion Vault

The Story of the Ritz Cracker Is the Story of Capitalism - Foundation for Economic Education

The Real Story Behind the Fed’s “Soft Landing” Narrative - Mises Institute

Every Central Bank Gold Holdings - Bullion Vault

A Few Thoughts About The State Of The Economy - Advancing Time

A New Copper Supercycle Is Emerging - Sprott Insights

Golden Nugget - Bullion Vault

Newsletter of the Free Bullion Investment Guide - June 2024 - Free Bullion Investment Guide

James Grant: Interest Rates To Go Higher? - Zero Hedge

How the Bond Market Works - Bullion Vault

A-Mark Increases Investment in and becomes Majority Owner of Silver Gold Bull, a Leading Online Precious Metals Retailer in Canada - Globe Newswire

Trump vs. Biden: How Could the US Election Affect the Gold Price? - Investing News Network

Gold Nanoparticle Cancer Research

Sona's Therapy Shows Significant Preclinical Efficacy in Second Cancer - Street Insider

Nanomaterials in Cancer Therapy: Advancing Ferroptosis Induction - AZO NANO


All Articles were Originally Posted on the Homepage