History of Foreign Exchange - Market Development
Gold Exchange and the Bretton Woods Agreement
In 1967, Bank of Chicago was awarded a college professor named Milton Friedman a loan of pounds, because you want the money used to reduce the British money. For Friedman, who said prices are too high against the sterling-dollar exchange to sell, then pull the money back the bank refuses to pay, so pocket quick profits. Banks refuse to loan the Bretton Woods Agreement, established twenty years ago, identifies the dollar against the national funding, and $ 35 dollars for one ounce of gold established.
Bretton Woods Agreement, established in 1944, fled across the country to prevent money is aimed at establishing international financial stability, and limiting speculation in money of the world. Before the agreement, the gold exchange standard - existing between 1876 and World War II - dominated the international economic system. Stability under the gold and silver exchange gained a new phase, because they are supporting gold prices. Ancient kings and governors and inflation triggered randomly debasing the money used by the practice abolished.
Gold exchange standard, but the error is absent. As a strong economy, it is mainly importing foreign, need reserves for the money back to sleep, and therefore the money supply would shrink, interest rates rose and economic activity has slowed down, if the slowdown. Finally, stock prices appear below other countries in the injection of buying sprees attractive crowd economy, gold, while the money supply interest rates of economic growth and create prosperity. Increase bust patterns prevailed gold standard throughout the Second World War up until I broke free movement of trade and sleep disruption.
After the war Bretton Woods Agreement, established in the countries taking part for the dollar against the value of money within the narrow agreed to try to maintain the golden ratio, if necessary.Countries without prejudice to the funding of trade bans, and take advantage of discounts of 10% only are able to do less. After the 1950 war caused by the international construction of large-scale movement of capital, led by a growing number of trade seen. Adjusted for exchange rate Bretton Woods Destabilizing.
The best agreement was finally in 1971, and the United States dollar are translated now gold. In 1973, industrial countries still have large amounts of money and independence, mainly because they focus on supply and demand management. Hovered day Price, size, speed and price volatility in the 1970s with the rise of new financial instruments, market deregulation and liberalization of trade, due in
Cross-border capital movements in the 1980s, the rapid appearance of computers and technology, Asia, Europe and the United States market through time zones will provide continuity. About $ 70 dollars of foreign currency transactions Rockettes day in 1980 more than $ 1.5 trillion a day two decades later.
December 2, 2016 at 9:51 AM
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