The Bretton Woods Agreement was a financial agreement negotiated in 1944 towards the end of World War II. Allied nations met in Bretton Woods, New Hampshire, to discuss the international economy. During the negotiations, they agreed to set the value of the US dollar in relation to the value of gold and to peg the currencies of other countries to the US dollar. The agreement also established the International Monetary Fund (IMF). The Bretton Woods system remained in place until the United States ended the gold standard in 1971. Despite its name, the World Bank was not and is not the central bank of the world. At the time of the Bretton Woods agreements, the World Bank was created to lend to European countries devastated by the Second World War. The World Bank`s objective has been to use loans for economic development projects in emerging economies. The first attempt was to create the London Gold Pool on 1 October. November 1961 between eight nations. The theory behind the pool was that the peaks in the price of gold on the open market set by the morning fixing of gold in London could be controlled by having a pool of gold to sell on the open market, which would then be restored when the price of gold fell. The price of gold has soared as high as $40 an ounce in response to events such as the Cuban Missile Crisis and other minor events.

The Kennedy administration devised a radical change in the tax system to increase production capacity and thus promote exports. This culminated in the 1963 tax cut program, which aimed to maintain the $35 anchor. Although the agreement was finalized in 1944, it did not enter into full force until 1958. The arrangement helped stabilize the value of the currencies concerned, and the IMF received contributions from member countries that it could lend to countries in need of additional financing. The Bretton Woods Agreements of 1944 established a new global monetary system. It replaced the gold standard with the United States. The dollar as a world currency. In this way, he established America as the dominant power in the global economy. After the agreement was signed, America was the only country capable of printing dollars.

The United States has put in place the European Economic Recovery Plan (Marshall Plan) to provide substantial financial and economic assistance for the reconstruction of Europe, largely through grants rather than loans. The countries belonging to the Soviet bloc, e.B Poland, were invited to receive the subsidies, but received a favorable agreement with the Comecon of the Soviet Union. [31] In a speech at Harvard University on June 5, 1947, U.S. Secretary of State George Marshall said, “The Bretton Woods Agreement is one of those turning points in the development of modern financial systems, which established the dollar as the default currency for world trade after World War II. While the Bretton Woods system expired under the Nixon administration, the financial institutions created by the agreement – the International Monetary Fund and the World Bank – remain permanent elements of the 21st century financial world. While West Germany agreed not to buy gold from the United States and instead agreed to hold dollars, the pressure on the dollar and the pound sterling continued. In January 1968, Johnson imposed a series of measures to stop gold outflows and boost U.S. exports.

However, this did not succeed, because in mid-March 1968, a dollar managed on gold by the London Free Market followed, the London Gold Pool was first dissolved by the ad hoc holiday institution in Britain at the request of the US government. This was followed by a complete closure of the London gold market, also at the request of the United States. Government until a series of meetings are held to save or reform the existing system. [36] The Bretton Woods countries chose not to give the IMF the power of a global central bank. Instead, they agreed to contribute to a fixed pool of national currencies and gold that would be held by the IMF. Each country that is a member of the Bretton Woods system would then have the right to borrow what it needs as part of its contributions. IMF was also responsible for the implementation of the Bretton Woods Agreement and established the International Monetary Fund, which is responsible for monitoring exchange rates, maintaining international reserve currencies and lending to countries that need additional funds to maintain their exchange rates. .