I’ve posted this before, but it’s worthy of another read.
New Hampshire is a gentle state. Unassuming, and bountifully peaceful. A leisurely ride along U.S. 302 through the White Mountain National Forest underlines that sense of peace and punctuates it with a tiny bit of history. It is called Bretton Woods. It was there in a rambling summer resort back in July of 1944 that 44-nations met to plan for the post-world War II economic recovery.
The Mount Washington Hotel where the conference took place is still a thriving resort today. It’s wraparound veranda frames the magnificent Mount Washington and other peaks in the Presidential Range.
Financial leaders, back then, talked, and negotiated and discussed and simplified, a way to make international monetary policies fair and workable following the expense of World War Two. The conference lasted 20-days.
The Bretton Woods accord created a system of fixed exchange rates. The value of the Dollar was set a $35 per oz of gold. All other currencies were pegged to the dollar, and respective countries were obliged to maintain their currencies value.
The agreement maintained an economic stability for twenty years, but eventually a huge balance of payments deficits shook its foundation, and finally, in 1971 President Nixon ended it by cutting the link between the dollar and gold.
The arrangement was so successful, that years after its collapse many economists and politicians today long for a return to Bretton Woods.