Briefing: Derivatives Nov 13, 2009
The fluctuations in currencies and interest rates after the collapse of the Bretton Woods system gave a push to demand. The option-pricing formula developed by Fischer Black and Mr Scholes, plus advances in computing power, made valuing derivatives much easier. (The Economist)
Britain's Retro Idea: Taxing Foreign Exchange Transactions Nov 13, 2009
When Tobin first proposed the idea in 1972, it was seen as a way to stop currency speculators after the collapse of the Bretton Woods system of fixed exchange rates, but it was never imposed. Sweden enacted a tax on certain financial transactions in the 1980s but ditched it in 1991 after trading volumes sank. (Time.com)
How To Find $288 Billion in Hidden Gold Nov 5, 2009
But some fast division reveals something interesting: The Treasury marks the value of its gold at $42 an ounce, the price settled on in 1973, two years after the United States scrapped the Bretton Woods System, which had held gold at $35 an ounce for decades. Wait, what. (Slate)
Nero's ghost in Istanbul Oct 23, 2009
The principal architect of the Bretton Woods system, Harry Dexter White of the United States, summarized the hard lesson: "The absence of a high degree of economic collaboration among the leading nations will ... inevitably result in economic warfare that will be but the prelude and instigator of military warfare on an even vaster scale.". As hostilities were abating, two alternative plans for monetary cooperation and stability were put forward in 1943. (Asia Times Online)
Currency fiddlerswrong to cry foul Oct 9, 2009
The current market determined system of exchange rates emerged by default in the early 1970s, when the Bretton Woods system of government-enforced fixed exchange rates failed, and the United States ended the convertibility of the dollar into gold. This system has no rules or effective governing structure. (Asia Times Online)
Gold rush may not pan out Sep 15, 2009
IN RECENT days the price of gold has risen above $US1000 an ounce, and some commentators are predicting further rises to $US1200 and above. One of the factors said to be driving these price rises is the view that gold is an inflation hedge. (Sydney Morning Herald -- Business)
Germany: The lives of others Sep 14, 2009
That was the path taken in the early 1970s, when the D-mark rose after the collapse of the Bretton Woods system of fixed exchange rates. It was followed again after the 1990s when Germany s reunification boom and devaluations by some trading partners pushed up its relative wage costs. (The Economist)
UN wants new global currency to replace dollar... Sep 9, 2009
Although many economists have pointed out that the economic crisis owed more to the malfunctioning of the post-Bretton Woods system, until now no major institution, including the , has come up with an alternative ... The Bretton Woods system did NOT make the USD the worlds reserve currency ... The remaining 75% could be in their own currency since it was already pegged to the agreed standard and would have had little chance of devaluing to levels that would jeopardize the rest of the Bretton... (The Drudge Report)
Dollar Is Funny Money in Push for World Currency Aug 31, 2009
When the Bretton Woods system was set up, tying world currencies to the dollar, proposed that the world establish an international currency unit that he called the bancor. A key attraction of the bancor was that it was to relax the pressure on distressed countries to run budget surpluses during recessions in order to ease the fears of antsy investors. (Bloomberg -- Columnists)
FSA Dragged Into Political Debate as Turner Champions Global `Tobin' Tax Aug 28, 2009
proposed a tax in 1971 on currency trading to deter speculation in the wake of the collapse of the Bretton Woods system of pegging currencies. Tobin, who died in 2002, won the 1981 Nobel Prize for his work on financial markets. (Bloomberg -- UK)
IMF adopts irrigationplan during a flood Aug 25, 2009
With the exit of the US from the Bretton Woods system (the US would no longer honor its obligation to convert dollars into gold) in 1971, such definition of SDR became meaningless ... The SDR reform was meant to bolster the Bretton Woods system and reduce pressure on the dollar's convertibility into gold ... Before the impending collapse of the Bretton Woods system in 1971, others proposed a system based on a reserve asset defined in terms of a basket of traded commodities and with features to... (Asia Times Online)
Buttonwood: Law of easy money Aug 17, 2009
The idea of a fiat currency was perceived to be the essence of recklessness for another two centuries and the link between money and gold was not fully abandoned until the 1970s, when the Bretton Woods system expired. Of course, the parallels with today are not exact. (The Economist)
New economic order rises in the East Aug 12, 2009
The Bretton Woods system shaped the geopolitical and economic landscape after World War II. We are arguably entering a similar reorganisation of the global order. This time, though, nations in the east will more than likely dictate terms, as was the case with the US 60 years ago. (Business Report, South Africa)
China's sleepless nights Aug 6, 2009
In the 1960s, the US pursued deliberate expansionary fiscal and monetary policies to finance the Vietnam War, in turn forcing it to abandon the Bretton Woods system of fixed exchange rates in August, 1971 ... Economist Robert Triffin noted that if under the Bretton Woods System (with gold and dollars as reserves) the US failed to keep running deficits, the reserve system would lose its liquidity and not keep up with the world's economic growth, and would thus bring the system to a halt. (Asia Times Online)
Slap Speculators in Bondage So Free Markets Choke: Mark Gilbert Jul 30, 2009
Thirty years ago, central banks were struggling to control monetary policy after the collapse of the Bretton Woods system of pegging currencies. So Tobin, now professor emeritus of economics at Yale University, proposed a tax on currency trading, say 0. (Bloomberg -- Columnists)
Regionalism may hold the key to Africa's survival Jul 9, 2009
The 1970s saw the collapse of the Bretton Woods system and the energy crisis that led to the global economic crisis in the 1970s and the 1980s. European countries and the US responded by deepening and adopting protectionism in the form of regionalism, respectively. (Business Report, South Africa)
Buttonwood: Caveat creditor Jul 3, 2009
In retrospect it is clear that a change in the economic backdrop akin to the demise of the Bretton Woods system in the early 1970s has taken place. Investors will be dealing with the aftermath for decades to come. (The Economist)
Buttonwood: Tied to the mast Jun 27, 2009
But the gold standard and its successor, the Bretton Woods system, eventually fell apart. In their place came the bond-market vigilantes. (The Economist)
Volcker Gets Less Than He Wants From Obama in Curbing Wall Street Excesses Jun 26, 2009
He was at the Treasury in 1973 when the Bretton Woods system that governed financial relations among nations collapsed. He led the Fed in a fight against the worst postwar bout of inflation. (Bloomberg)
Post-crisis riches aheadfor East Asia leaders Jun 19, 2009
But the underlying motive for the muscle flexing by the OPEC cartel was surely the loss of real income following the end of the Bretton Woods system in 1971. That collapse of a system that had permitted the United States to export inflation to non-dollar economies saw the value of the dollar plummet as pent up inflationary pressures surged back into dollar instruments with a vengeance. (Asia Times Online)
BRIC Dollar Bonds Beat Ruble, Real, Yuan Debt as Medvedev Blasts Currency Jun 17, 2009
8 percent in June 2008, according to the IMF. The currency has underpinned exchange rates since the 1971 collapse of the Bretton Woods system, which linked their value to gold. Statements about changing the global foreign exchange system are just a political gesture, said , who manages $10 billion in emerging-market debt at Stone Harbor Investment Partners in New York. (Bloomberg -- Asia)
Yuan in the ascendancy May 29, 2009
The creation of the SDR marked the most significant international financial agreement since the emergence of the Bretton Woods system at the end of World War II, which was based on the gold-backed US dollar ... Under the current international monetary system, there is no "natural" limit to the issue of US dollars as there was under the Bretton Woods system, when the dollar was backed by gold at a fixed rate of exchange. (Asia Times Online)
China's money mandarins take the hard line Apr 20, 2009
"We need to build a new world order," said the President of Kazakhstan, Nursultan Nazarbayev, also calling for a "new Asian currency" and "an Asian Bretton Woods system". Nazarbayev had just secured a $5 billion loans-for-oil deal with China. (Sydney Morning Herald -- Business)
No One Model for New Global Economy Apr 1, 2009
Instead, the institutions in place the International Monetary Fund, the Bretton Woods system on exchange rates and the World Bank should take immediate steps to incorporate a rising Asia into their systems of global governance. Otherwise the countries clinging to power and narrow solutions risk cramping their own economic growth, argues journalist and author Yoichi Funabashi. (YaleGlobal Online Magazine, CT)
Who will "feed" the U.S.? Apr 1, 2009
The repeated and escalating financial crisis since the collapse in 1971 of the Bretton Woods system showed the whole world may be paying more than what it gained from the current currency system, he wrote in an article. As the world's reserve currency, about two thirds of the international trade and financial transactions are priced and settled in the U.S. dollar. (Xinhuanet, China)
Reforming global monetary system: serious proposal Mar 27, 2009
Just as Zhou said, "the frequency and increasing intensity of financial crisis following the collapse of the Bretton Woods system suggest that the costs of such a system to the world may have exceeded its benefits. The price is growing even higher, not only for the users, but also for the issuers of the reserve currencies.". He also proposed to expand the role of the Special Drawing Right (SDR) created by the IMF in 1969 in international trade, commodities pricing, investment and corporate... (Xinhuanet, China)
Dollar's dominance to be challenged at G20 summit Mar 27, 2009
There were various institutional arrangements in an attempt to find a solution, including the Silver Standard, the Gold Standard, the Gold Exchange Standard and the Bretton Woods system. The above question, however, as the ongoing financial crisis demonstrates, is far from being solved, and has become even more severe due to the inherent weaknesses of the current international monetary system. (Xinhuanet, China)
Zhou Xiaochuan: Reform the International Monetary System Mar 26, 2009
There were various institutional arrangements in an attempt to find a solution, including the Silver Standard, the Gold Standard, the Gold Exchange Standard and the Bretton Woods system ... The frequency and increasing intensity of financial crises following the collapse of the Bretton Woods system suggests the costs of such a system to the world may have exceeded its benefits ... The collapse of the Bretton Woods system, which was based on the White approach, indicates that the Keynesian... (Xinhuanet, China)
China wants IMF unit to replace dollar as a reserve Mar 24, 2009
But his speech, issued exceptionally in English as well as Chinese, spells out Beijing's dissatisfaction with the primacy of the U.S. currency, which Zhou says has led to increasingly frequent global financial crises since the collapse in 1971 of the Bretton Woods system of fixed but adjustable exchange rates. Related Articles. (International Herald Tribune)
Tax to the rescue Mar 24, 2009
Since 1972, when the (post-World War II) Bretton Woods system collapsed, national policymakers have been confronted with this axiom that they can achieve two of these three goals. Other proposals include investor George Soros' concept of an international credit insurance corporation to undergird global markets. (Asia Times Online)
China promotes overhaul of global monetary system Mar 24, 2009
But his speech, issued exceptionally in English as well as Chinese, spelled out Beijing's dissatisfaction with the primacy of the U.S. currency, which Mr. Zhou says has led to increasingly frequent global financial crises since the collapse in 1971 of the Bretton Woods system of fixed but adjustable exchange rates. "The price is becoming increasingly high, not only for the users, but also for the issuers of the reserve currencies. Although crisis may not necessarily be an intended result of the... (International Herald Tribune)
China Toys With Biting Hand Feeding Its Surplus: John M. Berry Mar 20, 2009
Under the Bretton Woods system of fixed currency values anchored by the dollar, nations with surpluses supposedly had the same responsibility as those with deficits to alter their economic policies to adjust the imbalances. It rarely worked that way. (Bloomberg -- Columnists)
Governments must take charge where markets have failed Mar 6, 2009
Just as it fell to former president Franklin D Roosevelt to rebuild US capitalism after the Depression and to the US Democrats to rebuild post-war domestic demand, to engineer the Marshall Plan to rebuild Europe and to set in place the Bretton Woods system to govern international economic engagement, so it falls to a new generation to reflect on and rebuild our economic systems. If centrist governments are to save capitalism they face three challenges. (Business Report, South Africa)
Gold Standard Fans Yearn for Great Depression Mar 3, 2009
The Bretton Woods System collapsed in 1971 when the costs associated with fighting the Vietnam War forced President to suspend the convertibility of dollars into gold. If you dont have faith in central bankers or politicians to ride herd over inflation, why would you trust them to keep a country on a gold standard for more than a short period of time. (Bloomberg -- Columnists)
John Lanchester: When central bankers rescued, then ruined, the world. Feb 8, 2009
Liaquat Ahamed s book stretches from the beginning of the First World War to the setting up of the Bretton Woods system to regulate the global flows of capital, at the end of the Second. At the time his story begins, Ahamed estimates that the entire global supply of gold can be stored in a two-story town house. (New Yorker)
