All countries in the Bretton Woods system have agreed to a firm commitment to the U.S. dollar, with deviations of only 1%. Countries were required to monitor and maintain their monetary commitments, which they achieved primarily by using their currency to buy or sell U.S. dollars as needed. The Bretton Woods system has therefore minimized the volatility of international exchange rates that has helped international trade relations. Greater stability in foreign exchange exchange has also been a factor in the success of the World Bank`s support of international loans and subsidies. Currencies were convertible into gold, but unlike the gold market standard, countries had the option of changing values by their currencies. That`s why Keynes described the Bretton Woods system as “the exact opposite of the gold standard.” The global economy has tripled in two decades, but the supply of gold has not changed much. … [D]i caximate cause of the world depression was a strukturell fehlerhaft and poorly managed international gold standard. … For many reasons, including the Federal Reserve`s desire to stem the U.S.
stock market boom, monetary policy in several major countries became contractualized in the late 1920s, a contraction that was transmitted worldwide by the gold standard. What began to be a lenient deflationary process began to take off when the banking and monetary crises of 1931 triggered an international “battle for gold”. The sterilization of gold inflows by surplus countries [the United States and France], the substitution of gold by foreign exchange reserves and runs to commercial banks has led to an increase in the coverage of silver gold and, consequently, a sharp involuntary decrease in domestic shipments. Monetary contractions, on the other hand, have been strongly linked to lower prices, output and employment. Effective international cooperation could, in principle, have allowed for the expansion of money on a global scale despite restrictions on the gold standard, but disputes over the reparations and war debts of the First World War and the insularity and inexperience of the Federal Reserve prevented this result. As a result, some countries were only able to escape the deflationary whirlwind by unilaterally abandoning the gold standard and restoring national monetary stability, a process that stretched in a stagnant and uncoordinated manner until France and the other gold bloc countries finally left gold in 1936. – The Great Depression, B. Bernanke Strengthens the relative decline of American power and the discontent of Europe and Japan towards the system was the continued decline of the dollar , the base that had supported the global trading system after 1945. The Vietnam War and the government`s refusal of U.S. President Lyndon B.
Johnson to pay for it and its Grand Corporation programs through taxation resulted in an increase in outflows of dollars to pay for military spending and widespread inflation, resulting in a deterioration in the U.S. trade balance. In the late 1960s, the dollar was overvalued with its current position, while the German mark and the yen were undervalued; And of course, the Germans and the Japanese did not want to revalue their exports and thus increase them, while the United States tried to preserve its international credibility by preventing devaluation.  Meanwhile, the pressure on government reserves has been exacerbated by new international foreign exchange markets, with their huge pools of speculative capital in search of quick profits.  Despite its name, the World Bank was not (and is) not the central bank of the world. At the time of the Bretton Woods agreement, the World Bank was created to lend to European countries devastated by the Second World War. The World Bank`s focus has shifted to lending to economic development projects in emerging countries. In return, the role of government in the national economy had been associated with the state`s appropriation of the guarantee of economic well-being.