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This story goes back to 1944, at this time World War 2 was at its end and the world's economy, infrastructure and other assets were destroyed. And the world was facing a big question mark in the form of "How will the world recover from this disaster? How redevelopment will take place? How to solve other money related and political problems?" To solve this whole scenario a meeting was conducted in America in July 1944.
In which 730 delegates from 44 allied nations participated. And this conference was named as Bretton Woods Conference. This conference gave birth to the IMF and World Bank.
Now during and after the 2nd World War America was the only land and economy which was least affected by the War. Hence their currency i.e. The US Dollar was the only currency which was reliable and stable both politically and economically.
So what happened exactly in this conference…?
With support of Britain and other nations the US Dollar was given status as World Reserve Currency. Also, it was accepted that all transactions of the IMF and World Bank would take place in Dollars.
Now in return America promised that printing of dollars will be kept limited, and any country can exchange gold by dollars @ 35$ per ounce at a fixed rate(Fact United States have largest gold reserves even now and in 1944 too). The US Dollar is hence used as international trade. This system is known as Bretton Woods system.
Now if we look there are many many accusations by many nations that the US was not returning their gold, hence the Dollar value went to zero in 1971. But after the deal between oil supplying nations and US (The deal said that all the selling transactions of Oil will be done in US Dollar and US will provide protection to their oil fields.) Hence Petrodollar was invented and Dollar gained its value back and went back into circulation.
Hope this blog was informative and helped you in some way. Feel free to give your suggestion by commenting in the comment section below. Be updated for more posts by FOLLOWING/SUBSCRIBING us and following us on social media.Thank You for visiting Info Thirst.
LEARN.TRADE.SHARE.
This story goes back to 1944, at this time World War 2 was at its end and the world's economy, infrastructure and other assets were destroyed. And the world was facing a big question mark in the form of "How will the world recover from this disaster? How redevelopment will take place? How to solve other money related and political problems?" To solve this whole scenario a meeting was conducted in America in July 1944.
In which 730 delegates from 44 allied nations participated. And this conference was named as Bretton Woods Conference. This conference gave birth to the IMF and World Bank.
Now during and after the 2nd World War America was the only land and economy which was least affected by the War. Hence their currency i.e. The US Dollar was the only currency which was reliable and stable both politically and economically.
So what happened exactly in this conference…?
With support of Britain and other nations the US Dollar was given status as World Reserve Currency. Also, it was accepted that all transactions of the IMF and World Bank would take place in Dollars.
Now in return America promised that printing of dollars will be kept limited, and any country can exchange gold by dollars @ 35$ per ounce at a fixed rate(Fact United States have largest gold reserves even now and in 1944 too). The US Dollar is hence used as international trade. This system is known as Bretton Woods system.
Now if we look there are many many accusations by many nations that the US was not returning their gold, hence the Dollar value went to zero in 1971. But after the deal between oil supplying nations and US (The deal said that all the selling transactions of Oil will be done in US Dollar and US will provide protection to their oil fields.) Hence Petrodollar was invented and Dollar gained its value back and went back into circulation.
Hope this blog was informative and helped you in some way. Feel free to give your suggestion by commenting in the comment section below. Be updated for more posts by FOLLOWING/SUBSCRIBING us and following us on social media.Thank You for visiting Info Thirst.
LEARN.TRADE.SHARE.
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