The transformation of money as a tool for exchange
The transformation of money as a tool for exchange
Money has been a tool for exchange of goods and services for over decades now and as help increase trade between nations.Prior to the advent of money,many countries use the trade by batter system,which allows for the exchange of goods with another goods,latter this system was abandoned as trade between nations increases and then precious metals such as Gold, Silver, Bronze were used as a means of exchange for goods and services.Unfortunately trade volume between various nation increases and carrying this precious metals across distant countries became a burden as well as risky,therefore nations adopted a new system of currency, which was not necessarily paper money,but something more lighter and less risky than this precious metals.The problem now arise on how to value the currency of one nation to another nation.
The Gold standard was initiated as a system for determining the worth of a country currency with respect to another,it principles simply stated that if country A has twice as much Gold as country B,then country A currency would be worth twice as much as country B.The nation of the world adopted this standard which was very much in vogue during the 1880's.Sadly during the world war,paper money were printed in excess of most countries gold reserve and this brought about disequilibrium in the Gold standard.After the second world war, it became glaring that most nations are in huge debt and most of them already devastated by the war.In order to help nations on the brink of collapse as well as restructure the monetary system, the Bretton Woods conference in New Hampshire was called by the western allied powers.
During the bretton Wood conference the United State of America and the United Kingdom drafted a proposal to create two financial institution that would help stabilize the exchange rate, increase trade as well as provide economic aid for the post war Europe.The two institution became know as the International Monetary Fund and The International Bank for Reconstruction and Development also known as the World Bank.It was agreed during the conference to pegged the United State dollar against major currencies of the 48 member nations that attended the conference,this was due to the fact that the United State of America economy seem unscathed by the war, currencies of participating nations pegged against the United State Dollars can be exchanged for the United State Dollar at a fixed rate,while the United State dollar can then be converted to gold at fixed rate,this became known as the per value system.The Bretton Woods Agreement was also aimed at preventing currency competition and promoting monetary co-operation among nations. Under the Bretton Woods system, the IMF member countries agreed to a system of exchange rates that could be adjusted within defined parities with the US dollar or, with the agreement of the IMF, changed to correct a fundamental disequilibrium in the balance of payments. The per value system remained in use from 1946 until the early 1970s.
Start trading Now Start with $100. No Commissions. Better Spreads, High Leverage, 24H.">
http://www.articlesbase.com/currency-trading-articles/the-transformation-of-money-as-a-tool-for-exchange-2696598.html
Boston Acoustics Review & Coupon Code Direct 2 Drive Review & Coupon Code Pet-Source Review The secret of Deliberate Creation Review. Are you ready to change your life? A Full Review of the HP Docking Station How To Put Up Your Property For Sale And Save Some Money Aca Utilities Review Rob Benwell's Linkwheel - An Unbiased Review Call India for Less Money ipad reviews shop currently Driving Fear Program Review Save Up Money for Your Stylish Eyeglasses Call Bangladesh and Save Money Too