Purposes of creation

1. Restoration and increase in the volume of international trade.
2. Providing resources at the disposal of states to counteract temporary difficulties in the foreign trade balance.

Effects

1. Dollarization of the economies of a number of countries, which led to the exit money supply out of national control, and its transfer to the control of the Federal Reserve System.

Principles

• The price of gold was rigidly fixed at $35 per troy ounce;
• Fixed exchange rates have been established for the currencies of the participating countries to the key currency;
• Central banks maintain a stable exchange rate of the national currency against the key currency (+/- 1%) through foreign exchange interventions;
• Changes in exchange rates are allowed through revaluation or devaluation;
• The organizational links of the system are the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD). The IMF provides loans to foreign currency to cover the deficit of balances of payments and support unstable currencies, monitors compliance with the principles of operation of the monetary systems of the participating countries, and ensures monetary cooperation.

A fixed price was set for gold: $35 per 1 troy ounce. As a result, the United States gained currency hegemony, pushing aside its weakened competitor, Great Britain. In fact, this has led to dollar standard international monetary system based on the dominance of the dollar. More precisely, talking about gold dollar standard. In the middle of the 20th century, the United States owned 70% of the world's gold reserves. The dollar, a currency convertible into gold, has become the base of currency parities, the predominant means of international settlements, foreign exchange interventions and reserve assets. The US national currency has simultaneously become world money.

Foreign exchange interventions were seen as a mechanism for adapting the monetary system to changing external conditions, similar to the transfer of gold reserves to regulate the balance of payments under the gold standard. Exchange rates could only be changed if there were significant distortions balance of payments. It is these changes exchange rates within the framework of hard parities were called revaluation and devaluation currencies.

Crisis of the Bretton Woods Monetary System

Fundamental Causes of the Crisis

This system could only exist as long as the US gold reserves could convert foreign dollars into gold. The collapse of the dollar was predetermined. US gold reserves were melting before our very eyes: at times 3 tons a day. And this, again, despite all conceivable and unthinkable measures that the United States took to stop the flow of gold, to make sure that the dollar was “reversible until it is required to be reversible” (Sch. De Gaulle). Opportunities for the exchange of dollars for gold were limited in every possible way: it could be carried out only at the official level and only in one place - in the US Treasury. But the numbers speak for themselves: between 1949 and 1970, US gold reserves fell from 21,800 tons to 9,838.2 tons, more than halving.

The last point in this "flight from the dollar" was put by General de Gaulle, not limiting himself to a declaration about the need to eliminate the priority of the dollar. He moved from words to deeds, presenting the United States for an exchange of 1.5 billion US dollars. A scandal erupted. The United States began to put pressure on France as a NATO partner. And then General de Gaulle went even further, announcing France's withdrawal from NATO, the liquidation of all 189 NATO bases in France, and the withdrawal of 35,000 NATO soldiers. To top it all off, during his official visit to the United States, he presented $750 million in exchange for gold. And the US was forced to make this exchange firm course because all the necessary formalities have been met.

Of course, such a scale of "intervention" could not "tumble down the dollar", but the blow was struck in the most vulnerable place - the "Achilles heel" of the dollar. General de Gaulle created a most dangerous precedent for the United States. Suffice it to say that between 1965 and 1967 alone, the US was forced to exchange its dollars for 3,000 tons of pure gold. Following France, Germany presented dollars for exchange for gold.

But the United States soon took no less unprecedented defensive measures, in unilaterally abandoning all of its previously accepted international obligations for the gold backing of the dollar.

In the early 1970s, gold reserves were finally redistributed in favor of Europe, and more and more cash and non-cash US dollars participated in international circulation. There were significant problems with international liquidity, as gold production was small compared to the growth in international trade. Confidence in the dollar, as a reserve currency, further fell due to the huge deficit in the US balance of payments. New financial centers(Western Europe, Japan), and their national currencies gradually also began to be used as a reserve. This led to the loss of the United States of its absolute dominant position in financial world.

The problems of this system were clearly formulated in the dilemma (paradox) of Triffin :

The issue of the key currency must correspond to the gold reserves of the issuing country. An oversupply that is not backed by a gold reserve could undermine the convertibility of a key currency into gold, causing a crisis of confidence in it. But the key currency must be issued in sufficient quantities to provide an increase in the international money supply to service the growing number of international transactions. Therefore, its emission should take place regardless of the size of the limited gold reserves of the issuing country.

In the process of developing a system for partial withdrawal of this contradiction, the use of an artificial backup tool was proposed - Special Drawing Rights. This mechanism is still in operation today.

Additional Causes of the Crisis

1. instability in the economy. The onset of a currency crisis in 1967 coincided with a slowdown in economic growth.
2. Rising inflation had a negative impact on the competitiveness of firms. Since different inflation rates in different countries influenced the dynamics of the exchange rate in different ways, this created conditions for "exchange distortions", which encouraged speculative movements of "hot" money.
3. In the 1970s, speculation escalated currency crisis. The surplus of dollars in the form of a spontaneous avalanche of "hot" money periodically fell on one country, then on another, causing currency shocks and a flight from one currency to another.
4. Instability of national balance of payments. Chronic deficits in some countries (especially the United States, Great Britain) and a positive balance in others (Germany, Japan) intensified currency fluctuations.
5. The discrepancy between the principles of the Bretton Woods system and the change in the balance of power on the world stage. currency system based on national currencies ah, came into conflict with the internationalization of the world economy. This contradiction intensified as the economic positions of the USA and Great Britain weakened, which repaid the deficit of their balance of payments by issuing national currencies, using their status as reserve currencies. This was contrary to the interests of other countries.
6. The role of transnational corporations (TNCs) in the monetary sphere: TNCs hold gigantic short-term assets in different currencies, which can significantly exceed the reserves of the central banks of the countries where the corporations operate and, thus, TNCs can elude national control. TNCs, when trying to avoid losses or make profits, participate in currency speculation, giving them a gigantic scope.

Thus, it gradually became necessary to revise the foundations of the existing monetary system. Its structural principles, established in 1944, ceased to correspond to the real state of affairs. The essence of the crisis of the Bretton Woods system lies in the contradiction between the international nature of international economic relations and the use of national currencies (mainly the US dollar) for this, subject to depreciation.

Forms of manifestation of the crisis

• exacerbation of the problem of international monetary liquidity:
  • "currency fever" - the massive sale of unstable currencies in anticipation of their devaluation, buying up currencies - candidates for revaluation;
  • "gold rush" - a flight from unstable currencies to gold, a spontaneous increase in its price;
  • sharp fluctuations official gold and foreign exchange reserves;

• panic on the stock exchanges and falling prices of securities in anticipation of changes in the exchange rate;

• activation of national and interstate currency regulation:
  • massive devaluations and revaluations of currencies (official and unofficial);
  • active foreign exchange interventions of central banks, including those coordinated between several countries;
  • the use of foreign loans and borrowings from the IMF to support currencies;

• struggle between two tendencies international relations- cooperation and separate actions (up to trade and currency "wars").

Key dates for the development of the crisis

1. March 17, 1968 Established dual gold market. The price of gold in private markets is freely set according to supply and demand. According to official transactions for the central banks of countries, the convertibility of the dollar into gold remains official exchange rate$35 for 1 troy ounce.
2. August 15, 1971 US President Richard Nixon announced a temporary ban on the conversion of the dollar into gold at the official rate for central banks.
3. December 17, 1971. Dollar devaluation against gold by 7.89%. The official price of gold increased from 35 to 38 dollars per 1 troy ounce without resuming the exchange of dollars for gold at this rate.
4. February 13, 1973. The dollar devalued to 42.2 dollars per 1 troy ounce.
5. March 16, 1973 The Jamaican International Conference subordinated exchange rates to the laws of the market. Since that time, exchange rates have not been fixed, but changed under the influence of supply and demand. The system of fixed exchange rates has ceased to exist.
6. January 8, 1976 After transition period, during which countries could try different models of the monetary system, at a meeting of ministers of the IMF member countries in Kingston, Jamaica (Jamaica Conference), a new agreement was adopted on the structure of the international monetary system, which had the form of amendments to the IMF charter. A model of free mutual conversions was formed, which became characterized by fluctuations in exchange rates. Jamaican currency system operates in the world to the present (2011), although in the light of the global crisis of 2008-2009, consultations began on the principles of a new world monetary system (G20 anti-crisis summit, G-20 London summit).

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Bretton Woods Monetary System(Bretton Woods System) international system organizations monetary relations and settlements, legally formalized in 1944 at the UN International Monetary and Financial Conference in Bretton Woods (USA). The new monetary system logically followed from a variety - it, as a result of which the US dollar began to play the role of world money along with.

The main features of this system were defined in the agreements adopted at the Bretton Woods Conference, which officially came into force in December 1945 and were as follows:

1. gold was retained to the extent that it remained the common embodiment of wealth and was used for final settlements between countries, but the scale of its use in international monetary relations was significantly narrowed;
2. along with gold in international circulation, as international means of payment and reserve payment requirements, the national monetary units of individual countries were used, in particular, the US dollar, declaratively equated to gold as a standard of the value of the currencies of all countries, and to a lesser extent, the British pound sterling;
3. reserve currencies could be exchanged for gold: the US dollar - in the US Treasury at the official ratio established in 1934 ($ 35 per troy ounce) to central banks and government organizations of other countries, and together with the British pound - on world gold markets ( mainly in London), governments and individuals with a view to . Almost until 1968, the price of gold remained unchanged;
4. the establishment and mutual exchange of currencies were carried out on the basis of those agreed by the member countries of the IMF, denominated simultaneously in gold and US dollars. These parities were stable, and their change could only be carried out with a sanction under certain conditions, which rarely happened in practice;
5. market exchange rates were not supposed to deviate from the fixed dollar parities of these currencies by more than 1%, that is, they were quite severely tied to the US dollar;
6. in the foreign exchange markets, national currencies were freely exchanged for US dollars and one for another at rates that fluctuated within 1%. Based on the free convertibility of currencies, multilateral settlements between countries were carried out.
7. international regulation currency relations occurred mainly through the mediation of the IMF, which ensured that the member countries of the Fund observed official currency parities, rates and free convertibility of currencies. Changes in parities or the introduction of foreign exchange restrictions necessarily required the consent of the IMF.

In practice, the Bretton Woods system was a form of the gold-dollar standard: "gold - US dollar - national currency", the emergence of which became a natural stage in the evolution of international monetary relations.

After the Second World War, it was difficult to predict what would happen next. economic development. Due to the post-war devastation in Europe, the value of the dollar was significantly higher than in 1939. For example, the gold value of the US dollar was set at 0.888671 g, and the British pound sterling was set at about 2.11 g, that is, 1 pound sterling is equal to 2.374 US dollars. However, a few years later, it turned out that the established fixed exchange rates were unrealistic. The pound sterling could not withstand the high exchange rate, which was 4.03 US dollars and in 1949 by 30%. The same thing happened with the currencies of other countries.

In the late 1950s, the economies of Europe were largely restored. The pace of imports from the United States slowed down, and the deficit began to grow. Gradually, the supply of dollars exceeded their demand. Some European central banks began converting some of their dollar holdings at the Federal Reserve Bank of New York into gold, based on a 1934 fixed price of $35 per troy ounce. In 1968, a "gentlemen's agreement" was concluded between the Federal Reserve Bank of New York and other central banks about refraining from exchanging dollars for gold.

In fact, this was the end of the conversion of the dollar into gold, however, not the international monetary crisis. The pressure of the US dollar increased due to the growth of deficits in the balance of payments of European countries. In the spring of 1968, the Bundesbank, which was overflowing with unclaimed dollars, was forced to first impose restrictions on certain market transactions, and then completely ceased foreign activities. Other countries - the Netherlands, Switzerland, Japan followed the example of Germany and held their own currencies or introduced floating rates. As a result, on August 15, 1971, the 37th US President Richard Nixon officially announced the end of converting the dollar into gold. This was the end of gold's monetary role in the financial world.

After the collapse of the Bretton Woods system in December 1971, an international conference was held at the Smithsonian Institution, as a result of which the US dollar was officially devalued, which became the basis for revising the exchange rate parities of almost all countries. IMF member countries were forced to expand the margin of fluctuations between market rates and their official parities. In European countries, a system of bilateral parities was introduced with relatively small margins - the maximum difference between the market rate and the parity should not exceed 2.25%. This system, which is the predecessor of , has been in place since mid-1972 and is known as the "currency snake".

After a 10% devaluation of the dollar in February 1973, six European countries (Belgium, Luxembourg, Denmark, France, Germany, and the Netherlands) stopped accepting dollars at previously agreed purchase levels. Consequently, a period of floating dollar exchange rate against other currencies began.

The principles of the Bretton Woods system were violated, since the use of one currency - the US dollar - came into conflict with the tasks of internationalization of the world economy, in which the role of the countries of Western Europe and Japan significantly increased. The Bretton Woods monetary system existed until 1973, and individual elements - until 1976, when the exchange of dollars for gold was stopped and the system was finally introduced.

When the Second World War ended and its outcome was clear, another invisible front raged - financial. It was then that the events took place that glorified the small town of Bretton Woods, until then known more as a ski resort. It was here that a system was formed that operates within the framework of a number of states called the free world.

Where did it all begin?

Before moving on to the main topic of the article, let's look at what preceded its occurrence. Every international monetary system is special kind an agreement in which the rules of the current interstate commodity-money turnover are prescribed. This approach is needed to bring national monetary units to a certain common denominator and establish a standard material value. This approach eliminates confusion in the calculation of imports and exports. The first attempt to restore order was the emergence of the Paris Monetary System. Although, in fact, it simply legally consolidated the situation that had developed at the time of its formation. That is, gold acted as a universal measure. Because of this, the Parisian system is often also called monetary-metal. It did not matter what attributes the gold coins had, whose profiles and coats of arms were minted on it. The only focus was on weight. This system functioned quite successfully, although it was not without flaws. So, it was not easy to pay in ingots and gold coins.

In addition, there was natural wear and tear, and the means of payment simply wore out. In addition, carrying a bag of gold with you all the time was dangerous and inconvenient. Also, this approach was unprofitable, because countries that had mines and deposits quickly became rich. It did not matter the level of their development. In addition, transporting significant amounts by sea was a turbulent business. Therefore, drafts and bills of exchange gradually gained more and more popularity. Parisian system collapsed during the roar of guns of the First World War. Then countries began to carry out unlimited emission of paper substitutes, which were already familiar at that time. This problem needed to be addressed. And it was planned to achieve this goal with the help of the Genoese monetary system. It involved the introduction of gold backing for the currencies used. There were fluctuations in rates, but such an approach made it possible to stabilize and streamline the calculations and the situation in the markets. This system existed until the end of World War II. Interesting fact: when it was created, the United States limited itself to the role of an observer, while the USSR took the opportunity to declare the first proletarian state. By the way, one can often hear opinions that they were still better than the Bretton Woods system, Parisian and Genoa, and that everything should be different. Alas, if you familiarize yourself with the specialized economic literature, containing many indicators, you can find out that they were inconvenient with a rapidly growing population, as well as a significant increase in production then observed.

How was the Bretton Woods world monetary system created?

It didn't come out of nowhere. Its initiator was the US business elite, which sought world hegemony after the war. At the time of the proposal, the US economy was at its peak. own development. The World War allowed the flywheel of domestic production to spin, further assisted by Roosevelt's reforms. So, by 1939, the consequences of the Great Depression were practically overcome, military orders contributed to the revitalization of industry, and the shortage of products on the European continent (sometimes reaching famine) had a positive effect on Agriculture. In other words, there were every reason to claim the role of world leader. The Bretton Woods system of finance was supposed to fix the status quo for decades. The International Monetary Fund was originally created. It started its activity in 1947. Its founders were 44 states, but only the United States could act as a financial donor. Soon, many states lined up to receive loans to improve the economic situation in the country. Like any adequate creditor, the IMF demanded that the borrowed funds be returned. And for this it is necessary that they be effectively spent. In case of difficulties, provided additional credits to avoid the collapse of the national currency and default. Therefore, careful monitoring of the economic situation in countries was introduced. In order to unify the process of interaction, it was decided that it is necessary that the Bretton Woods world monetary system be based on certain principles. The most important of these was the gold-dollar standard.

About principles

The stability of exchange rates is an extremely important condition for the functioning of the market. And the principles of the Bretton Woods monetary system took this fact into account. The only stable currency at that time, sufficiently backed by the yellow metal, belonged to the United States. For a dollar, you could get 0.89 grams of gold at any time. Although the system itself claimed to be gold-currency, in fact it was gold-dollar. American means of payment received the status of world money only after the war. Initially, there were not many of them. For comparison: in the reserves of other countries, they accounted for only 1/10, while gold ½, and the pound sterling of the British Empire - 4/10. But soon the dollar won the main position. This was facilitated by many factors, among which good macroeconomic indicators and a large gold reserve (three-quarters of the world's total). In addition, an impressive foreign trade surplus, as well as the hegemony of American goods in the world, made their contribution. All this contributed to the fact that the principles of the Bretton Woods system were adopted and enshrined in a number of documents. They looked like this:

1. The price of gold is rigidly fixed at thirty-five dollars per troy ounce.
2. Fixed exchange rates were set for all participating countries against the US dollar (the key currency).
3. It was allowed to change the established indicators with the help of devaluation or revaluation.
4. Central banks were supposed to maintain a stable exchange rate of national Money through foreign exchange interventions.
5. The organizational links of the created system were identified - the previously mentioned IMF and international bank reconstruction and development.

What opportunities did it create?

Initially, about changing rates. If a devaluation was carried out, then this was usually seen as a symptom of the unfavorable situation in the current economic situation and led to a rise in the price of imported goods. But exports became more profitable. So that was a definite plus. Another positive point is the fast money. So, internal costs are reduced, a symbol arises to produce goods here, and not where the expensive currency is. As a natural result, the volume is growing foreign investment. This moment was well understood. Therefore, not only the stick in the form of the possibility of refusing credit and other sanctions was actively used, but also the carrot, which manifested itself in the form of a willingness to help.

What is the point here? The Bretton Woods system assumed that when a country receives a loan, it assumes obligations to maintain the exchange rate of the monetary unit. At the same time, it was established that fluctuations should not exceed one percent of the ratio to the US dollar established through the gold standard. In exceptional cases, it was allowed to increase the value of this figure to 10%. But if this threshold was exceeded, the culprit was expected to be sanctioned. Foreign exchange interventions were used to regulate the exchange rate. To implement them, dollars were needed. The Federal Reserve was very willing to sell them. This is how the Bretton Woods system worked in its early years. In the second half of the forties, bright prospects opened up before the United States. The world lacked food, hygiene items, clothing, clothing, and much more. industrial developed states lay in ruins. Since the beginning of the fifties, the economies of European countries began to grow rapidly.

What did it lead to?

The Bretton Woods system is based on significant US dominance. And, accordingly, without it, its functioning would be problematic. But the behavior of the States was contradictory and unpredictable. We can recall the Marshall Plan, which contributed to the rise of European economies. It should be noted that it was a forced measure. On the one hand, it contributed to the growth of competitors. On the other hand, the impoverishment of the broad masses could lead to the coming of pro-Stalinist forces to power in a number of countries, moreover, by democratic peaceful means. The US could not allow this.

Despite the growth of European economies, the dollar confidently held a leading position. The boundless trust supported by gold seemed unshakable. At the same time, costs have also increased. The PRC was founded in 1949. A year later, the Korean War broke out. It was attended a large number of volunteers from the countries of the socialist camp. They were armed with high-quality and numerous Soviet equipment. Formally, they were opposed by the combined forces of the UN, but in fact the main burden lay on the United States. The fall in foreign trade turnover and the increase in expenditure items forced the Federal Reserve System to go into full swing printing press. Thus began the crisis of the Bretton Woods monetary system. At the same time, the improvement in the economic situation of a number of countries contributed to the need for exchange rate regulation. The main tool for this was foreign exchange intervention. If it was necessary to strengthen the national monetary unit, then a large number of dollars were thrown into the market. If necessary, weaken it, they were bought. To a greater extent, the devaluation met the interests of the countries, and therefore it was implemented. Development currency markets, the increase in the movement of capital and many other factors clearly indicated that the crisis of the Bretton Woods system would soon flare up with considerable force. The first wake-up call appeared in 1965.

french incident

The fact that a large amount of cash dollars is issued and exported abroad, and economic situation in the USA it’s not very rosy, they just couldn’t help but notice financial analysts. And the first sign in 1965 was the so-called French incident. De Gaulle, who served as president, recalled that the Bretton Woods system guaranteed the exchange of dollars for gold at a ratio of $35 per gram. France had at that time just an astronomical gold and foreign exchange reserve. Namely, a third of a billion. For the US, this was not the best moment. There was a space race going on, and the messy, hard, and extremely expensive Vietnam War was going on. The Ministry of Finance tried to hint that the exchange of such an amount is an unfriendly move. But De Gaulle was adamant. Dollars were exchanged. Soon student unrest broke out in France, which resulted in a full-scale uprising. De Gaulle lost the presidency. Rumor has it that the United States had a hand in this as retaliation for such an act. But nothing could be changed. This is the beginning of the end. The crisis of the Bretton Woods system has begun.

What happened next?

As the US trade surplus declined, confidence in their currency fell. To smooth out the emerging contradictions, the IMF decided to create a special monetary unit - special drawing rights. It did not have gold backing, although formally it was equal in value to the dollar. This currency surrogate was used to carry out mutual settlements of debts between the central banks of countries that were members of the IMF. The crisis of the established system began to gain momentum. If all countries with dollar reserves began to demand gold, then there would simply not be enough of it. In 1971, the agreement began to break down. All circumstances indicated that we should expect an early devaluation of the dollar. West Germany, Holland and Belgium were the first to fail. These countries have introduced a floating exchange rate. It was determined by supply and demand in the foreign exchange markets.

Japan held out the longest - until September 1971. Since in fact the dollar could no longer be exchanged for gold, the concept of the "dollar standard" was introduced. There was a devaluation and the rate per troy ounce rose to $38. The gold standard of the Bretton Woods monetary system began to burst at the seams. It was clear that this figure is very conditional, and this is far from the end. And it really was so - in 1972, an ounce of gold began to cost over 42 dollars. In the 70s, the Jamaican system took shape, which did not provide for the existence of parities and standards. Then all existing currencies were divided into three groups: hard, conditionally convertible and free. The Jamaican system started a situation that one economist described very well: uncultivated wheat is sold for unprinted money. Now this is the situation that prevails all over the world. Of course, if someone wants to buy gold, it is quite possible. But only at market prices.

What led to its collapse?

Bretton Woods economic system was not perfect. The increase in inflation affected the competitiveness of firms, as well as world prices. All this encouraged the speculative movement of money. Different inflation influenced the dynamics of the exchange rate, which created distortions. Instability of balance of payments, which manifested itself in the form of a chronic deficit (Great Britain, USA) or active balance(Japan, Germany) only increased sharp fluctuations. Also, the principles of the Bretton Woods world system ran counter to the development of the whole world. Indeed, inflation-prone national currencies were used as the basis for it. Initially, this problem was tried to be solved by involving the UK and establishing the pound sterling as a reserve reserve currency. But as the British Empire and the United States weakened, these states abused their status and used the printing press to cover deficits. The stability of reserve currencies was undermined.

In addition, the right of the holders of dollar bills was contrary to the ability of the United States to fulfill its obligations. Over two decades (1949-1971), their short-term debt increased by 8.5 times, while gold reserves decreased by 2.4 times. The ongoing American policy of "deficits without tears" undermined confidence in the dollar. Understated in the interests of the United States, the official price of gold began to suddenly deviate sharply from the situation on the market. Interstate regulations did not help. Artificial gold parities lost their meaning. Until 1971, the US stubbornly refused to change course. All this only exacerbated the distortions. The Bretton Woods system of exchange rates led to the fact that central banks had to intervene even to the detriment of national interest. That is, the United States shifted to other countries the concern for maintaining the established dollar exchange rate, which led to an aggravation of interstate contradictions. because of existing restrictions speculative activity intensified on devaluation and revaluation. Weak currencies were predicted to go down, and strong ones to go up. Regulation through the IMF has hardly borne fruit. His loans did not even cover a temporary deficit and support the national currency.

Final stage of operation

Americanocentrism, which was the basis of the Bretton Woods system, did not correspond to the three world centers united by it: Japan - Western Europe - the USA. The use of the dollar as a reserve currency for military-political and foreign economic expansion, the export of inflation and a number of other negative factors only intensified international contradictions. Initially, this resulted in the development of the Eurodollar market, which initially supported the system by absorbing excess cash. But in the 1970s, he exacerbated the crisis. Transnational corporations have also played their part. These entities have short-term assets that are more than double the reserves of central banks. In addition, they can easily elude national control. Therefore, when participating in currency speculation, they can give them a grandiose scope.

In addition, the devaluation of the pound sterling in November 1967 also contributed to the fall of the system. And this currency, as we remember, was the second after the dollar. And on one day, November 18, the gold provision was reduced by 14.3%. Following the UK, another 25 countries (usually its trading partners) devalued their currencies in different proportions. This set in motion a process that has gone down in history under the name of the "collapse of the golden bloc". After the start of the devaluation, the volume of transactions in the gold market increased. If in London they usually traded at 5-6 tons per day, then on November 22-23 these figures reached 65-200 thousand kilograms! At the same time, the price of gold rose to $41 per troy ounce. And this despite the fact that officially it was at the level of $35. The gold rush led to the fact that in March 1968 the gold was disintegrated and a dual market was formed.

Conclusion

So the essence of the Bretton Woods monetary system was considered. This agreement played its role and lost its meaning. The Bretton Woods system of exchange rates was the last link before the formalization of the current financial situation for us. Despite the large number of voices about fragility and calls for a return, so far it still exists and works without significant upheavals.

Introduction………………………………………………………………….2

The history of the creation of the Bretton Woods monetary system………3

The principles of the Bretton Woods system………………………………5

Causes of the crisis of the Bretton Woods monetary system………7

Forms of manifestation of the Bretton Woods crisis

Monetary System……………………………….…………...................................10

The history of the crisis of the Bretton Woods system…………………....11

Features and socio-economic consequences of the crisis of the Bretton Woods monetary system……………………………....12

Conclusion……………………………………………………………….14

References……………………………………………………...15

INTRODUCTION

Bretton Woods monetary system- This is a special currency regulation, the rules of which are reflected in an agreement signed by representatives of more than forty states at a special UN conference on global financial issues. The currency system is named after the venue of the conference - the resort of Bretton Woods in the United States of America. It was then, in 1944, that a decision was made to create the World Bank and the International Monetary Fund, which formed the basis of the new monetary system.

The Bretton Woods monetary system was created to provide certain freedoms to world trade, as well as to stabilize exchange rates by linking them to the US dollar and gold. In connection with these events, the term "gold exchange rate" was given life and the official value of gold was fixed - an ounce at a price of 35 dollars. In fact, the dollar has become one of the types of world money, which placed great responsibility on this currency.

The functioning of this system could only be carried out unhindered as long as the gold reserves of the United States could allow free conversion of the dollar. As practice has shown, this situation could not last long.

The crisis of the Bretton Woods system was caused by a change in the balance of the main forces of the world economy and the depreciation of the US dollar. Since it was the key currency of the system, its fall caused the destruction of fixed rates and the entire world monetary system. One way or another, the Bretton Woods system was able to cope with the tasks that were assigned to it when it was created - the restoration of international trade and the strengthening of states in the foreign trade balance. And its collapse served as a pretext for the development new activity- currency trading.

1. The history of the creation of the Bretton Woods system

The patterns of development of the monetary system are determined by the reproduction criterion, reflect the main stages in the development of the national and world economy. This criterion is manifested in the periodic discrepancy between the principles of the world monetary system and changes in the structure of the world economy, as well as in the alignment of forces between its main centers. In this regard, the crisis of the world monetary system periodically arises.

During the crisis of the world monetary system, the operation of its structural principles is violated, and currency contradictions sharply aggravate. Acute outbreaks and dramatic events associated with the currency crisis cannot last long without threatening reproduction. Therefore, a variety of means are used to smooth out the acute forms of the currency crisis and to reform the world monetary system.

The evolution of the world monetary system is determined by the development and needs of the national and world economy, changes in the balance of power in the world.

The Great Depression of the 1930s led to the collapse of the gold standard system. It has also prompted countries to erect trade barriers that have greatly hampered international trade. World War II had the same devastating effect on world trade. It is therefore fair to say that by the end of this war, world trade and monetary system turned into ruins.

In order to develop the foundations of the world monetary system, from July 1 to 22, 1944, an international conference of allied countries was convened in Bretton Woods, New Hampshire (USA).

Anglo-American experts from the very beginning rejected the idea of ​​returning to the gold standard. They sought to develop the principles of a new world monetary system capable of providing the economic growth and limit the negative socio-economic consequences of economic crises. The desire of the United States to consolidate the dominant position of the dollar in the world monetary system was reflected in the plan of G.D. White (Chief of the Department of Foreign Exchange Research, US Department of the Treasury).

As a result of long discussions on the plans of G.D. White and J. M. Keynes (Great Britain) formally defeated the American project, although the Keynesian ideas of interstate currency regulation were also the basis of the Bretton Woods system.

Both currency projects are characterized by common features:

free trade and movement of capital;

balanced balances of payments, stable exchange rates and the global monetary system as a whole;

maintaining the advantages of the former gold standard system (fixed exchange rates), while sweeping aside its shortcomings (complex processes of internal macroeconomic transformations)

creation international organization to monitor the functioning of the world monetary system, for mutual cooperation and to cover the balance of payments deficit.

On December 27, 1945, the International Monetary Fund (IMF) was created at the conference on the basis of an agreement (the IMF Charter), designed to make the new monetary system real and viable. In 1945, this Charter was signed by 29 states. The IMF began operations on March 1, 1947 as part of the Bretton Woods system.

The third world monetary system was formalized at the UN monetary and financial conference in Bretton Woods (USA) in 1944, and the articles of the IMF Agreement (the IMF Charter) became its international legal basis.

The main provisions (elements) of the Bretton Woods monetary system, which remained after the war until the early 1970s, were as follows:

The basis of the IAM was gold and two reserve currencies: the US dollar and the British pound sterling - the gold exchange standard. But, of course, the American dollar became the main currency, which assumed the functions of a currency standard, the main settlement currency and an international reserve fund;

The role of the dollar as a currency standard was that the dollar was equal to gold, and all other member countries of the Fund set the parity of their currencies either against gold or against the dollar with a gold content of 0.888671 g of pure gold. Fixing the gold content made it possible to calculate the currency parity as the ratio of gold contained in two comparable fiat currencies;

Countries set and maintained fixed rates of their currencies against the dollar. Market Rates could deviate from the currency parity only within +/-1% (i.e. fluctuations in both directions could be no more than 2%).

Each central bank was obliged to maintain the exchange rate of his country against the dollar within the specified limits:

The price of gold remained unchanged at the level set by the US in 1934, namely $35 per troy ounce of fine gold. And then only the US dollar was freely exchanged for gold bars at the official price of $35 per tr. an ounce, and the exchange was made for the purposes of international settlements between the Federal Reserve Bank in New York and the central banks of other IMF member countries;

For the first time in the history of international monetary and credit relations, the design of the elements of the monetary system took a completely finished form: the International Monetary Fund and the International Bank for Reconstruction and Development were created as specialized monetary and credit financial authorities UN.

Thus, the post-war monetary system clearly reflected the dominance of the United States - the leading world power. With good reason, we can qualify it as the gold-dollar standard. And this, in turn, meant a deep and direct dependence of the stability of the Bretton Woods monetary system, the stable and prosperous functioning of its elements on the state of the US dollar and the US economy.

The events that unfolded in the monetary sphere since the late 60s. and continued until the mid-1980s, can be qualified as a crisis of the world monetary system.

Inflation and inflationary rise in prices, unbalanced balance of payments, sharp fluctuations in exchange rates and constant revisions of the parities of the national currencies of the member countries of the Fund, strengthening state regulation spheres of currency relations were hallmarks post-war monetary system almost throughout the entire period of its operation. The American dollar has found itself in the center of international monetary relations in crisis. For many years, the position of the US dollar - the centerpiece of the post-war monetary system - was undermined by rising inflation at home, largely due to huge budget deficits (in no small part due to colossal military spending), and on the world stage - by the passivity of the balance of payments and a sharp contraction, as a consequence, the country's gold reserves.

All this, together with the expansion of the operations of the euro-currency markets, the active role of transnational corporations in the movement of capital, combined with energy and raw material crises, economic crises 70 - 80s, finally, a gigantic increase in external debt developing countries, to which since the late 80s. added external debt of the former Soviet republics and Eastern European countries, led to the fact that monetary and financial shocks, periodically, including today, experienced individual countries, groups of countries and even regions, in the early 70s. gave impetus to the restructuring of the very system of monetary relations of the IMF member countries and resulted in the rejection of fixed rates, currency parities and the official price of gold.

The crisis of the US dollar and the rejection of the basic principles of the Bretton Woods monetary system put on the agenda the issues of restructuring the world monetary system, the reform of the IMF Charter.