International Monetary Systems

The gold standard is a monetary system

in which a country backs its currency with

a reserve of gold and allows currency

holders to exchange their notes and coins

for gold. The UK adopted or use gold in

1821 as their monetary system, then

European nations and the United States

considered gold as their currency in 1867

The Gold Standard
at the International Monetary Conference

that is held in Paris. Before the gold

standard, the monetary currency back

then was silver. 50 years later a currency

regime happened throughout Great

Britain that lead to German, France, the

United States, and many other countries

in the 1870s deciding that gold will

become the international monetary by

1880. Italy and Russia also began joining

this regime. For many years up to 1914,

most of the world’s leading currencies

 had their exchange rate determined by

the gold standard.

When the 1st world war happened,

economic disruption began resulting in

the abandonment of the link to gold. This

results in big economies leaving the gold

standard one after another in the Great

The Sterling Gold
Depression that happen in the 1930s.
Standard and The Great Britain, returned to the gold

Collapse of Gold standard in 1925, but due to its

Standard overvalued pound sterling in the

exchange rate, it led to a huge quantity

of balance payment deficit, which also led

to a loss of gold reserves that result in

quitting it for good in 1931. The United

States also left the gold standard and

partially got back to it in 1934. Gold

Standard ended after the 2nd World War

and was replaced by The Bretton Wood

Era.
 Bretton Wood System is a set of unified

rules and policies that provided the

framework necessary to create fixed

international currency exchange rates.

Since World War II ended the world

needed a new financial system, they

replaced The gold standard system to

become the Bretton Wood system. 44

The Bretton Wood Era
countries sent delegates to Bretton

Woods, New Hampshire to work on just

that in July 1994. During Bretton Wood

Era there are 2 institutions created for

countries to recover without devaluing

their currency these are the IMF or also

known as the International Monetary fund

and the International Bank for

Reconstruction or also known as World

Bank these 2 will help those less

developed countries grow.

The end of the Bretton The Bretton Wood era didn’t survive that

long because of the deficits running too

Wood Era many various projects that lead to the

increase of dollars while the gold reserves

keeps on decreasing for the reason many

countries keep on demanding gold in

exchange for their dollars since dollar

have the most exchange type of currency

during this era which leads to Richard

Nixon suspending or stopping the

exchange of gold to dollars or dollars to

gold in August 1971 that ended the

Bretton wood era.