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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (60376)	1/24/2010 3:48:31 PM
From: maceng2	1 Recommendation Respond to of 218005

No Sad. Neither of us has an official education in economics, but I think we can both agree that is no excuse for not knowing what is happening. To me the old newsreel defined a problem in a stark and clear way. It is apparent to me, if nobody else, that international agreement is necessary for free trade to survive in a global sense. If one or more major player decides to change or ignore the rules, chaos ensues. Global trade dries up and national economies suffer. The Bretton Woods agreement was based on a certain condition. I quote from my previous link. =============================================================== The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate of its currency within a fixed value—plus or minus one percent—in terms of gold and the ability of the IMF to bridge temporary imbalances of payments. =============================================================== i.e. The Bretton Woods Agreement very purpose was that there would be little or no imbalance of payments between trading partners over time. I shouldn't really need to type any more of the answer as it should be out there already, and a quick search suggests this problem has been studied in detail. I shall quote just on part of it for clarification globalpolicy.org ============================================================== ....Confidence in the dollar started to slide. States began to seek, as the gold standard allowed them to, the conversion of their dollars into gold. The US reacted by announcing in August 1971 that it was going to abandon the convertibility of the dollar. This unilateral action ended the exchange rates regime that had been negotiated by states at Bretton Woods. Other states were more or less forced to float their own currencies. =============================================================== How odd the problem with gold should resurface in 1971 as in 1933. No ???????????? I hope this improves your understanding of the original Bretton Woods agreement. What ensued was as different as chaulk is to cheese. This link studies how global trade can be improved. atlasnetwork.org has a subsection on sound money too. soundmoneyproject.org Very interesting. The plain fact to me is that a huge imbalance of payments between trading partners may suit a few mega rich bankers and global corporate CEO's but that is all. It will not last imo.