INTRODUCTION
BRETTON WOODS AND THE EMERGENCE OF THE U.S. DOLLAR RESERVE SYSTEM
In order to understand the current international monetary system, its challenges, and the questions about its longevity, it is important to understand how today’s framework came into being. Currencies as we know them today are fiat, which means that they are paper money, and that the paper possesses no more value than the denomination printed on it. Before a collective multinational decision made money fiat in the 1970s, paper money had been backed by gold. This international financial order, the gold exchange standard, had been established in 1944 in a pact known as the Bretton Woods Agreement, named for the scenic New Hampshire town that hosted an illustrious delegation ...
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