Bretton Woods Agreement - News, Updates, Images & Quotes

1944: The Bretton Woods Agreement was made. This international currency agreement created the World Bank and the International Monetary Fund (IMF). The agreement replicated the Federal Reserve System globally and, in effect, installed the U.S. dollar as the reserve currency of the world. Basically, while the world was involved in a world war, the world's bankers were hard at work changing the world. This meant that all currencies worldwide were now essentially backed by the U.S. dollar, which was pegged to gold. As long as the U.S. dollar was backed by gold, the world economy would be stable.

— Robert Kiyosaki; Rich Dad's Conspiracy of The Rich view

In 1944, just as World War II was about to end, a meeting of international banking leaders was held at a resort in Bretton Woods, New Hampshire—the United Nations Monetary and Financial Conference. This conference resulted in the creation of the International Monetary Fund (IMF) and the World Bank. While popular perception is that these two agencies were created for the good of the world, they have actually resulted in a lot of harm—foremost of which is the spread of a flat monetary system throughout the world.

— Robert Kiyosaki; Rich Dad's Conspiracy of The Rich view

As the 1950s and 1960s wore on, the United States became more and more inflationist, both absolutely and relatively to Japan and Western Europe. [...] But Europe did have the legal option of redeeming dollars in gold at $35 an ounce. And as the dollar became increasingly overvalued in terms of hard money currencies and gold, European governments began more and more to exercise that option.

— Murray Rothbard; What Has Government Done to Our Money? view

The new system was essentially the gold-exchange standard of the 1920s but with the dollar rudely displacing the British pound as one of the “key currencies.” Now the dollar, valued at 1/35 of a gold ounce, was to be the only key currency. The other difference from the 1920s was that the dollar was no longer redeemable in gold to American citizens; instead, the 1930’s system was continued, with the dollar redeemable in gold only to foreign governments and their Central Banks. No private individuals, only governments, were to be allowed the privilege of redeeming dollars in the world gold currency. [...] Since the dollar was artificially undervalued and most other currencies overvalued in 1945, the dollar was made scarce, and the world suffered from a so-called dollar shortage, which the American taxpayer was supposed to be obligated to make up by foreign aid. In short, the export surplus enjoyed by the undervalued American dollar was to be partly financed by the hapless American taxpayer in the form of foreign aid.

— Murray Rothbard; What Has Government Done to Our Money? view

At the 1944 Bretton Woods Monetary Conference, the United States persuaded the nations of the world to back their currencies with dollars instead of gold. Since the United States pledged to exchange an ounce of gold for every 35 dollars, and it owned 80 percent of the world's gold, the arrangement was widely accepted.

However, 40 years of monetary inflation brought about by Keynesian money managers at the Federal Reserve caused the pegged price of gold to be severely undervalued. This mismatch led to what became known as the "gold drain," a mass run by foreign governments, led by France in 1965, to redeem U.S. Federal Reserve Notes for gold. Given the opportunity to buy gold at the 1932 price, foreign governments were quickly depleting U.S. reserves.

— Peter Schiff; How an Economy Grows and Why It Crashes view