Showing posts with the label advantages-of-bretton-woods-system


HISTORICAL EVENTS IN THE FX MARKET END OF BRETTON WOODS: FREE  MARKET CAPITALISM IS BORN (1971) ____________________________________________________________ On August 15, 1971, it became official: the Bretton Woods system, a system  used to fix the value of a currency to the value of gold, was abandoned  once and for all. While it had been exorcised before, only to subsequently  emerge in a new form, this final eradication of the Bretton Woods system  was truly its last stand: no longer would currencies be fixed in value to  gold, allowed to fluctuate only in a 1 percent range, but instead their fair  valuation could be determined by free market behavior such as trade flows  and foreign direct investment. While U.S. President Nixon was confident that the end of the Bretton  Woods system would bring about better times for the international econ omy, he was not a believer that the free market could dictate a currency’s  true valuation in a fair and catas