Military Review

The Bretton Woods System, or How the US Seized World Domination

22
The Bretton Woods System, or How the US Seized World Domination

Bretton Woods Conference 1944.


At the end of World War II, the dollar became the main currency of the planet thanks to the monopoly right to exchange for gold

72 a year ago, 1 July 1944, began a fundamental change in the global economy, fixed in the agreements a few days later. However, the understanding of what happened came to ordinary people much later.

The world of finance has always been something like a mixture of an equilibristic with the magic of circus magicians. Most of his basic concepts are difficult to understand, not only by ear, but also completely conditional in nature. At the same time, finance is inextricably linked with money, and money has always been an instrument of power. Not surprisingly, with their help for many centuries, someone constantly tried to take over the world.

For example, in July 1944, a group of gentlemen held a conference in the resort town of Bretton Woods (New Hampshire, USA) in the Washington Mountain hotel, which resulted in the eponymous global financial system that marked America’s final victory over its long-standing geopolitical world rival - the UK. The winner got the rest of the world - more precisely, almost the whole, since the Soviet Union refused to enter the new system. However, for the United States, it was only an interim step towards global financial hegemony, which America was able to achieve, but it was not destined to stay on the Olympus.

Milestones

The transition from subsistence farming to machine production, among other things, caused a large-scale growth in labor productivity, thereby forming significant commodity surpluses that local markets could no longer absorb. This prompted the countries to expand foreign trade. For example, over the 1800 – 1860 years, the average annual volume of Russian exports increased from 60 million to 230 million rubles, and imports - from 40 million to 210 million. But the Russian Empire in international trade was not the first. Leading positions belonged to the UK, France, Germany and the United States.

Such a large-scale exchange of goods could no longer fit into the close framework of the subsistence economy and demanded a wide use of the common denominator in the form of money. This also gave rise to the problem of comparing their value among themselves, which ultimately led to the recognition of gold as the universal equivalent of value. Gold has played the role of money for centuries, it was available to all the "big players", from which the coin was traditionally minted. But more was more. International trade has realized the need not only of the mechanism of predictability of the value of money, but also the importance of the stability of the ratio of their value among themselves.

Using the peg of national currencies to gold made it very easy to solve both problems at once. Your candy wrapper is “worth it”, suppose one ounce (31,1 g) of gold, mine is two ounces, therefore, my candy wrapper is “equal” to your two. By 1867, this system was finalized and was consolidated at a conference of industrialized countries in Paris. The leading global trading power of the time was the United Kingdom, which is why the stable 4,248 exchange rate of the British pound sterling per ounce established by it became a kind of foundation of the global financial system. The remaining currencies were also expressed in gold, but, yielding to the pound in terms of the share of world trade, eventually came to their expression through the British pound.

However, even then the United States began its own game to overthrow the British currency hegemony. As part of the Paris Monetary System, the United States achieved not only the fixation of the dollar to gold (20,672 dollars per ounce), but also fixed the rule that free trade in gold could be carried out only in two places: in London and New York. And nowhere else. So there was a gold coin parity: 4,866 US dollar per British pound. The rates of other currencies were allowed to fluctuate only within the cost of sending the amount of gold, equivalent to one unit of foreign currency, between the gold sites of Great Britain and the USA. In the event that they went beyond the boundaries of this corridor, the outflow of gold from the country began or, on the contrary, its inflow, which was determined by the negative or positive balance of the national balance of payments. Thus, the system quickly returned to balance.

In this form, the “gold standard” existed until the beginning of the First World War and, in general, ensured the effectiveness of the mechanism of international finance. Although even then the UK was faced with the problem of the cyclical nature of the expansion and contraction of the money supply, fraught with the depletion of the national gold reserves.

The great war, as World War I was then called, greatly shaken the world economy, which could not but affect its financial system. London could no longer play the role of world reserve currency alone. The scale of the domestic economy simply did not generate as much gold to meet the demand of other countries for British pounds, while its own British trade balance remained negative. This meant the actual bankruptcy of the British Lion, but the gentlemen from the City took a clever step and at the international economic conference in Genoa in 1922, they proposed a new standard, called gold exchange. Formally, it hardly differed from the Parisian “gold”, unless the dollar was officially recognized as an international measure of value on a par with gold. Then began a small fraud. The dollar kept the gold collateral, and the pound - a tight exchange rate peg to the dollar, although it could not be exchanged for the corresponding gold equivalent.


Conference in Genoa in 1922 year

I will command the parade

However, the Genoese monetary system did not last long. Already in 1931, the UK was forced to officially cancel the convertibility of the pound into gold, and the Great Depression forced America to reconsider the gold content of its currency from 20,65 to 35 dollars per ounce. The USA, which had a positive trade balance by that time, began an active expansion into Europe. To protect it, Britain and other leading countries have introduced prohibitive customs tariffs and direct import restrictions. The volume of international trade and, accordingly, mutual settlements fell sharply. Currency exchange for gold in all countries was stopped, and by 1937, the world monetary system ceased to exist.

Unfortunately, before her death, she managed to bring the US banking community to the idea of ​​the possibility of seizing full leadership in the global economy through the acquisition of the status of a single reserve system by the dollar. And the Second World War that ravaged Europe fell here was most welcome. If Hitler did not exist, he would have been invented in Washington.

So when 1 July 1944, representatives of 44 countries, including the USSR, gathered at the Bretton Woods conference to resolve the issue of the financial structure of the post-war world, the United States proposed a system that was at the same time very similar to the one that “worked well before,” and time brought the world to the official recognition of America’s leading role. In short, she looked simple and elegant. The American dollar is tied tightly to gold (all the same 35 dollars per troy ounce, or 0,88571 g per dollar). All other currencies fix rates to the dollar and can change them no more than plus or minus 0,75% of this value. In addition to the dollar and pound, no world currency had the right to exchange for gold.

In fact, the dollar became the only global reserve currency. The British pound retained some privileged status, but by that time more 70% of world gold reserves were in the US (21 800 tons), the dollar was used in more than 60% of international trade calculations, and Washington promised huge loans in exchange for ratification of the Bretton Woods conditions to restore the economies of countries after the war. So, the Soviet Union was offered to allocate 6 billion dollars, which was a huge amount, since the entire volume of Lend-Lease was estimated at 11 billion. However, Stalin correctly estimated the consequences and wisely refused the proposal: the Soviet Union signed the Bretton Woods agreement, but so were they. not ratified.

The governments of the rest of the European countries actually signed a bondage and, with the ratification of the Bretton Woods conditions, could issue just as much of their own money as their central banks had a world reserve currency - US dollars. This provided the United States with tremendous control over the entire global economy. It also allowed them to establish the International Monetary Fund, the World Bank and GATT - the General Agreement on Tariffs and Trade, which later transformed into the World Trade Organization (WTO).

The world began to live according to the Bretton Woods system (BVS).


Wall Street, USA, 1939 Year

French demarche

With all the elegance of the plan and the enormous prospects for the USA, UAB itself contained fundamental problems that had manifested themselves in the times of the “gold standard”. So far, the US economy was about a third of the world, and if you deduct socialist countries, then 60% of the total Western economy, the share of dollars issued for lending to foreign financial systems was significantly less than the money supply circulating inside the United States. The balance of payments was positive, thus providing America with the opportunity to continue to grow rich. But as the European economy recovered, the US share began to decline, and US capital, taking advantage of the high cost of the dollar, began to actively leak abroad to buy cheap foreign assets. In addition, the profitability of foreign investments was three times higher than the profitability of the American market, which further stimulated the outflow of capital from the United States. America’s trade balance gradually became negative.

The tight restrictions on the gold trade that existed in BVA did not help, in fact, restricting its acquisition even by the central banks of other countries, and any private investors who were deprived of this opportunity. In addition, the emerging transnational corporations used their foreign capital for an active trading game, including “against the dollar.” The worsening imbalance between the theoretical BVS model and the actual state of affairs in the global economy led not only to the emergence of a black gold market, but also brought its price to more than 60 dollars per troy ounce, that is, twice as high as the official one.

It is clear that such a discrepancy could not last. It is believed that BVS was broken by French President General de Gaulle, who brought together the “ship of dollars” and presented it to the United States for an immediate exchange for gold. This история really took place. At a meeting with President Lyndon Johnson in 1965, de Gaulle announced that France had accumulated 1,5 billion paper dollars, which it intends to exchange for the yellow metal at the official rate of 35 dollars per ounce. According to the rules, the United States should have transferred more than 1300 tons of gold to the French. Considering that by that time nobody knew the exact size of the US gold reserve, but there were persistent rumors about its reduction to 9 thousand tons, and the cost of the whole mass of printed dollars clearly exceeded the equivalent of even the official number of 21 thousand tons, America will agree to this exchange could not. Nevertheless, France by way of hard pressure (for example, the country left the military organization of NATO) managed to overcome the resistance of Washington and in two years, together with Germany, thus remove more than 3 thousand tons of gold from the United States.

This is where the story of the Bretton Woods financial system ended, because after this embarrassment, the United States, under various pretexts, refused to exchange green notes for real gold. 15 August 1971, the next US president Richard Nixon officially canceled the gold supply of the dollar.

***

Over the years of its existence, BNS has done the most important thing - it has raised the American dollar to the pinnacle of world finance and firmly associated it with the notion of independent value. That is, the value of this piece of paper was given only by what is written on it - “dollar” - and not the amount of gold for which it could be changed. The refusal of gold collateral has removed from the United States the latest restrictions on the issue of money. Now the Fed could officially decide at its meeting how much the world needs dollars, without at all worrying about any kind of security. And the oil crisis, which broke out in 27, allowed the Middle East monarchies to agree on transferring the entire oil trade only to US dollars. All courses became floating, and the new system was called the Jamaican one and consolidated by 1973 – 1976 intergovernmental agreements.

Formally, the Jamaican system still exists today, but in fact we can see the beginning of its end. Because it contains even more systemic contradictions than it did in Bretton Woods, but there is already no gold in it that you can at least touch and count.
Author:
Originator:
http://rusplt.ru/society/brettonvudskaya-sistema-26958.html
22 comments
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  1. Kaban45
    Kaban45 10 July 2016 07: 06
    +12
    Thanks to the author! The article is very interesting and the topic is relevant!
    1. Kostyar
      Kostyar 10 July 2016 11: 56
      +4
      Anglo-Saxons scammers, swindlers, robbers and killers! Be sure to answer for all the evil that they brought to the world !!!
  2. Amurets
    Amurets 10 July 2016 07: 14
    +9
    << Formally, the Jamaican system exists to this day, but in fact we can see the beginning of its end. Because it contains even more systemic contradictions than there was in Bretton Woods, but there is no more gold in it, which can at least be touched and counted. >> That is, the transfer of the oil market to oil trading in another currency and the strengthening of industry in the EU completely will destroy the US economy?
    1. Rivares
      Rivares 10 July 2016 19: 10
      +2
      Quote: Amurets
      That is, the transfer of the oil market to oil trading in another currency and the strengthening of industry in the EU will completely destroy the US economy?

      The US economy will not be destroyed, since it is not so big, but it will destroy the global parasitic system, which is controlled by the dollar, and on behalf of which the United States dictates conditions to the rest of the World.
      1. gladcu2
        gladcu2 11 July 2016 22: 02
        0
        Rivares

        In the USA, production of group A is absolutely preserved, and 60% production of group B.

        In the US, there are only organizational problems.
  3. venaya
    venaya 10 July 2016 07: 16
    +15
    France through hard pressure (for example, the country withdrew from the NATO military organization) managed to overcome the resistance of Washington ... This is where the story of the Bretton Woods financial system ended

    And also immediately, after urgently organized student unrest (Paris was burning), the career of the head of the French Republic de Gaulle as the head of state ended. The issues raised in the article at the moment are constantly increasing in their relevance and are so serious and also have a centuries-old prehistory that a series on this topic will probably be useful. Actually, usually all wars start mainly because of money, because of very, very big money.
  4. 34 region
    34 region 10 July 2016 07: 16
    +2
    It is not clear why enter the gold content of the money? In fact, this is a fixed price for the purchase and sale of gold. Let's say one gram = one ruble. Today, gold is sold at a free price and nothing bad happens.
    1. Amurets
      Amurets 10 July 2016 09: 29
      +1
      Quote: Region 34
      It is not clear why enter the gold content of the money? In fact, this is a fixed price for the purchase and sale of gold. Let's say one gram = one ruble. Today, gold is sold at a free price and nothing bad happens.

      Just money is the equivalent of a commodity. At the moment, the equivalent of a commodity is oil, valued in dollars. If you want to quickly and easily understand the system of monetary relations, read the book by Elizavetina "Money". She easily and simply explains the essence of commodity-money relations and at the same time it is readable easy and with interest. This will only then make it much easier to understand at least the level of the basics to deal with this topic.
      1. gladcu2
        gladcu2 11 July 2016 22: 07
        0
        Amurets

        Since 1968, the United States has organized destabilization in the Middle East. And for military patronage, the Saudis were offered only one thing. The right to set oil prices only in dollars and also the right to sell oil only in dollars. To which the Saudis were wildly surprised and easily agreed. The time has come for petrodollar.
    2. 222222
      222222 10 July 2016 10: 04
      +1
      Rough. .pure ... ..conspirology

      1. In the US Rockefellers .. in the UK Rothschilds
      2. The Rockefeller Fed with a printing press .. and the Rothschilds have an English exchange that determines the price of gold and other valuable .. (as Yushchenko said. Give price formulas .. for the price of oil ”.. who knows the formula? No one needs to restrain the method and on whom to earn ..)
      3. Brzezinski at the Rothschilds .. Kissinger (who often flies to Russia ..) at the Rockefellers And Brzheinsky just growls at Russia .. almost continuously ..
      4. The emergence of the euro or the temporary victory of the Rothschilds or .mutnyak..with the collapse of the EU Rockefellers .. after its appearance there were two wars in Yugoslavia. And Saddam and Gaddafi decided to make a gold dinar got wars and ruin ..
      5 .. Then China suddenly rose. (. Do not get upset. Who allowed?) Here is the reformatting of the English exchange into Chinese and yuan. And buying gold by China. And the new world financial order ..... Rothschild game .. ???
      And strained in immediately toze .. from whom? from the USA ... Who is there in conspiracy theology? laughing
  5. demiurg
    demiurg 10 July 2016 08: 11
    +7
    What the world economy has now is the happy life of the golden billion at the expense of everyone else.
    Engineers, doctors flee to Europe to wash the toilets there. It is not normal.
    Why did I, in 2003, working as a mechanic wrapper on Elsib, receive about 100 rubles per hour (such a good salary for those years) and a mechanic wrapper on ABB in Germany received 30 euros? And uncle Xiao in China received generally 200 euros, but a month? Tell me that a German file worked 4-5 times faster than me hi
    1. 0255
      0255 10 July 2016 12: 11
      0
      Quote: demiurg
      Engineers, doctors flee to Europe to wash the toilets there. It is not normal.

      Not necessary. Good doctors and engineers in the West are well paid, about the difference from the CIS countries. The very same United States owes much of its success precisely to emigrants.
      1. Rivares
        Rivares 10 July 2016 19: 22
        0
        Quote: 0255
        Not necessary. Good doctors and engineers in the West are well paid, about the difference from the CIS countries.

        Slightly incorrectly said, with distortion. They pay well to everyone, and cleaning ladies, including) In terms of rubles. While their global system is functioning, where they are assigned the role of the golden billion.
        1. gladcu2
          gladcu2 11 July 2016 22: 15
          0
          Rivares vs 0255

          Emigrant doctors pose serious difficulties with retraining. After which, these doctors sit on a debt needle.

          The cleaning lady and the locksmiths in the west are paid exactly enough so that they can come to work the next day. Moreover, sometimes these workers are also offered to take a loan, just so that he could come to work tomorrow. Yes, it’s right, working also to get into debt.
    2. Mountain shooter
      Mountain shooter 10 July 2016 16: 50
      +2
      In 2003, it was 4 dollars per hour or 32 dollars per day. Not a bad salary at all. The Germans really get (or rather, the standard hour they cost 40 euros) however, this is in Germany. And in Poland - at least two times lower. And we have a standard hour (NOT SALARY!) Costs at least $ 10! There are many factors affecting the cost of this very hour. But to say that the German robotic lives FOUR times better than ours is not true. These are fairy tales for those who did not live and work there.
    3. Mikhail Matyugin
      Mikhail Matyugin 13 July 2016 00: 09
      0
      Quote: demiurg
      What the world economy has now is the happy life of the golden billion at the expense of everyone else.

      You probably forget a little that Russia is just a part of this "golden billion" (together with Europe, Australia, New Zealand, USA, Canada and part of South America). As in general, the population of all normal developed countries. But the remaining 5 billion of the population are mainly the peoples of the countries of the former "third world", of which India and China stand out.
  6. atos_kin
    atos_kin 10 July 2016 08: 47
    +4
    Only hryvnia will save the global financial zrada laughing
  7. PKK
    PKK 10 July 2016 09: 13
    +4
    The whole history of the pound and the dollar is very instructive. The great Stalin quickly saw through the swindlers and sent them away, but the Westerners killed Stalin for this. It is joyful that Russia has the opportunity to build its financial, sovereign policy. This is an indispensable condition for victory.
    1. kit_bellew
      kit_bellew 11 July 2016 09: 41
      +2
      Quote: PKK
      It is joyful that Russia has the opportunity to build its financial, sovereign policy.

      Enough to say this nonsense! hi
      Since 1993, Russia has been firmly embedded in the dollar system of control of national economies, which the author mentioned:
      The governments of other European countries ... with the ratification of the Bretton Woods terms, they could issue as much of their own money as their central banks had the world reserve currency - US dollars.


      Stalin, without a doubt, was the greatest Russian statesman. But here's the bad news: he had so few offensive companions and followers. Khrushchev transmitted them in a very short time and did not choke. And I.V. himself, most likely, towards the end of his life, he was tired of pulling the strap almost alone. After all, not only the country had to be lifted from ruins, but also to resist the open threat from the West. In the years 1948-49 (approximately), another thirty-seventh was needed, but, apparently, there was no more strength. But in the end, the unfinished ghouls, starting with Khrushchev, rolled the country along a log.
      1. Mikhail Matyugin
        Mikhail Matyugin 13 July 2016 00: 13
        0
        Quote: kit_bellew
        In 1948-49 gg (approximately), another thirty-seventh was needed, but, apparently, there was no more strength.

        You have absolutely no idea about the "Great Terror". Our country would not have survived its repetition, and even after the Second World War, and would have turned into some kind of Kampuchean society (there, if you remember, the Pol Pot people exterminated not only the entire elite, but a more or less educated stratum).
    2. gladcu2
      gladcu2 11 July 2016 22: 20
      0
      PKK

      Russia does not make any sense to win. The winner will be liable for the defeated. And this burden is very heavy.
      For Russia, the solution is to create a system of independent countries. More precisely, the growth of statehood of each individual country is important.
  8. 0255
    0255 10 July 2016 12: 07
    +3
    Formally, the Jamaican system still exists today, but in fact we can see the beginning of its end. Because it contains even more systemic contradictions than it did in Bretton Woods, but there is already no gold in it that you can at least touch and count.

    Shaw, again, another promise of an imminent collapse of the dollar? So this crash has been promised for decades, where is it? How long is it to wait?
    The United States, unfortunately, lives and lives, continues to sponsor wars, bombing anyone they want.
    1. Mountain shooter
      Mountain shooter 10 July 2016 17: 11
      +1
      They do not live as happily as they would like. Therefore, they arranged this around Russia. America urgently needed an ENEMY, which is with a capital letter. Well, Iran or North Korea was not drawn to such an ENEMY. Only the national debt of Matrasia is 20 trillion, together with the corporate ones - the figure is absolutely mind-blowing - 60 trillion! These bubbles should be somehow "blown off". Matrasia knows only one way - war. But the war is far from its borders. Nothing like the situation? Doesn't it look like anything? The Great Depression of 1929, which covered not only the United States but also Europe. And Germany, which was fed by someone's capital, which literally from the ruins, in 6 years rose to the level of a world power. Whose capital? What suddenly? And the idea was - to put the squeeze on the British Empire. Well, not with your own hands. And the British believed that it was they who rule, with the hands of the Germans removing France "from the board" and directing the entire united Europe to the USSR. Russia is now very close to the borders of the USSR within the borders of 39.
      Yes, but there was no NWF then. And it was possible to sit out in a puddle so that THE WHOLE WORLD IS IN TRUMP, and not a single bomb fell on my territory. Now - will not work.
  9. Rivares
    Rivares 10 July 2016 19: 27
    0
    Thanks to the author for a brief overview of the global monetary system. I learned something new.
  10. King, just king
    King, just king 10 July 2016 20: 33
    +1
    No, well, there. Gritting his teeth - it is necessary to applaud amers. Pull the whole world onto a globe with 1 MB (ours also had to adjust), and still have to skim the cream, this should be able to. Bright heads, b ...

    The trick is that we sell oil and gas virtually for free (not mine, thoughts are stolen). Those. we give them oil (Europe), they (USA) give us bonds, we give them gas, they give us bonds.
    1. Cat man null
      Cat man null 10 July 2016 20: 39
      0
      Quote: King, just king
      we sell oil and gas virtually for free (not mine, thoughts are ashamedы) Those. we give them oil (Europe), they (USA) give us bonds, we give them gas, they give us bonds

      - King, and you do not have, by chance, a pair of bonds you do not need?
      - if you have - give them to me ... "virtually free", eh? laughing
      - but stolen thoughts I would throw in your place in ... no, throw in ... in general, would throw
      - silly thoughts are for yes
      1. King, just king
        King, just king 10 July 2016 21: 24
        +1
        No, I do not have. Contact the Kremlin, maybe they will.

        And why are "stealthy" thoughts bad? So, seriously? I simplified it too.
        1. Cat man null
          Cat man null 10 July 2016 21: 41
          0
          Quote: King, just king
          And why are "stealthy" thoughts bad? So, seriously? I've simplified too

          - yes, just these "abligations" are essentially the same bucks
          - and bucks, it is, sadly, so far "world money"
          - you can hiss and spit as much as you like about the "cut paper" and the "FRS machine", but for this "cut paper" at any point .. um .. on a civilized planet, you will get whatever you want
          - the only question is whether your desires are feasible and whether you have a sufficient amount of "cut paper"

          And all request
          1. King, just king
            King, just king 10 July 2016 21: 58
            0
            A little later, I'll see the finale. Germans aaaaaa, flew out, aaaaaaaaaaaaaaaaa, I was so hoping that they would win !!!!!!
            1. King, just king
              King, just king 11 July 2016 11: 45
              0
              So, back.

              Firstly, they don’t tell us what exactly we (THEY) are buying. Those. which US Treasury securities. Everyone writes Treasure, Treasure - they learned, b, a new word. But there is a difference in the papers, and the difference is interesting.

              So explain to me, Cat Man Null, what profit does it make for us (IM) to sell oil to Europe, to buy in euros - not, say, a ball bearing factory, or precision machine tools, but US Treasury papers? Then to convert them (paper) into bucks. Clear.

              I’m writing, the scheme is simple, Papuan: oil-euro-treasury-bucks-as an option violinist Roldugin- and silence.
  11. Who said
    Who said 10 July 2016 20: 58
    -2
    War is coming
    1. King, just king
      King, just king 10 July 2016 21: 26
      0
      Popa total? everyone?
  12. Shick
    Shick 12 July 2016 07: 06
    0
    Quote: Bone
    Anglo-Saxons scammers, swindlers, robbers and killers! Be sure to answer for all the evil that they brought to the world !!!

    The best scams of the 20th century, or else there will be, you'll see