bretton woods

We are out into the proper mountains today. The Northern Appalachians and the White Mountains in particular. More of that when I have a chance to load some pictures.

Right now we are dancing the night away in Bretton Woods, which is the place where Keynes and a large bunch of diplomats and economists planned the economic reform and pegging of currencies which led to the IMF and the end of the gold standard.

The place is awash with finery and despite the passing of time, its not that difficult to visualise the setup for the creation of the dollar peg rate to gold.
Keynes' idealistic approach to the creation of a new index was outmanoeuvered by the United States, which wanted all the currencies to be pegged via the dollar, which effectively supplanted gold as the reserve currency of global economics.

It was clever thinking at the time, because the US needed to have an ongoing economic engine after World War II and getting all of Europe's currencies linked to the dollar and everyone using it as part of commerce was a way to keep the export engine running and access to all markets.

It worked for a while, but the dollar based scheme created some interesting disparities. The US could effectively trade at huge profits with developing nations and then send some of the profits to Europe as post-war grants. The US became capitalist in chief of the world.

Pax Americana.

Until in the late 60s when the Europeans bonded, Japan regained some economic strength and a war in Vietnam created new US challenges and a massive US balance of trade deterioration.

The USD to gold rate of $35 per ounce was ending and with it the fixed nature of a Bretton Woods global currency peg.

Fascinating to turn up at the location where these events played out and amusing to see that the various delegates would have been rather well catered for, judging by the locale and its rather opulent amenities.

Yes, I did also find the Bretton Woods speakeasy cave for a different type of music.