Consequences of the abolition of the gold standard. Consequences of the abolition of the gold standard When the dollar was no longer backed by gold

Most countries' currencies are not backed by gold reserves. There is also no link between the ruble and gold. The gold reserve available in Russia is not enough for this: even if the ruble backing is implemented, it will amount to about four percent. The only opportunity to do this is only in cases of global changes in the economy, but it is very difficult for the state to decide on such drastic actions.

Nowadays, the ruble is not tied to gold.

How was the ruble secured?

The ruble as a monetary unit was introduced into circulation by Peter I and was minted from silver at that time. The raw material for the coins itself confirmed its status as a solvent unit. Then banknotes appeared in circulation, which very quickly depreciated and were not trusted even within the country. The only attempt to peg the ruble to gold was made at the end of the 19th century and ended very successfully.

Gold coins came into circulation and could be freely exchanged for paper money. The 1:1 ratio was not violated. In the pre-revolutionary period, the ruble's supply of precious metals reached 150%. This entire system, which was finally put into operation, collapsed after the revolution, when a political crisis reigned in the country and the economy was practically destroyed.

Ruble from the era of Peter Perov.

The fact that a currency is endowed with resources or a state reserve is usually assessed positively. According to world practice in recent years, a currency can be stable even without collateral. An example is the euro. This currency is not tied to the national economy, much less has any backing, but is quite successfully used and converted.

The Russian ruble is not backed by gold. Among the factors that provide the national currency, analysts name a large amount of foreign currency - the receipt of dollars from the sale of energy resources. Modern realities of geopolitics and economics force government authorities to think about stabilizing the ruble by other means. Is it possible to introduce backing of the Russian ruble in gold again?

Is a return to the gold standard possible?

In the context of sanctions from Western countries and comprehensive pressure on the Russian economy, the idea of ​​abandoning payments in dollars is heard more and more often and more insistently. As an analogue, a currency system based on collateral in the form of yellow metal is proposed.

The introduction of sanctions against Russia is pushing for a discussion of the gold backing of the ruble.

Some actions of the Russian authorities indicate that work in this direction is underway. A weak ruble becomes a threat to the development of the domestic economy, prompting the Central Bank to raise rates. In the short term, the weakening of the ruble will not bring anything good, and the Central Bank of the Russian Federation cannot endlessly raise rates to protect the currency.

The situation is complicated by the sanctions imposed against Russia: the ruble has fallen over the past year against the dollar by more than 30%. The pricing of the ruble in American dollars occurs through foreign exchanges, which also does not strengthen Russia’s position. A currency war threatens serious economic problems, so many experts express support for the option of returning to the gold standard.

Options for creating gold collateral

How can the ruble be pegged to gold? With the Russian economy at 2 trillion. US dollars, external public debt is about 378 billion. Foreign exchange reserves are approximately 429 billion dollars, of which about 45 billion are stored in the form of real precious metal. The budget deficit will be about 1% of GDP in 2015. These conditions suggest that the gold standard can be introduced and successfully used for a long time. The two main conditions for its success will be strict adherence to budget discipline and strict control of the credit sector.

By setting ruble-to-gold conversion rates, the Central Bank will be able to use all its powers to manage currency liquidity. Authorities will no longer be limited to gold buying and selling transactions.

One option could be the issue of coupon bonds, the yield on which will be tied to gold.

Managing the ruble exchange rate under the gold standard will cause some difficulties, but with the competent work of the Central Bank, they can be resolved. Lending growth will have to be limited, otherwise the entire created system will be at risk. The massive conversion of rubles into precious metals can be regulated by withdrawing the currency from circulation.

In general, pegging the ruble to gold is quite possible with the implementation of some economic reforms.

The main threat to the gold backing of the ruble is the central banks in London and New York, which can buy rubles and present them for exchange for the yellow metal. But this possibility can also be limited by introducing special rules.

It is unclear whether the ruble will be backed by gold or other collateral in the near future. The assessment of the consequences for the country's economy is as follows: with the introduction of the gold standard, the ruble should stabilize. This will mean that the increase in the cost of living will slow down markedly, and domestic savings will begin to grow. Ideally, this could lead to political consequences: lower government spending on social security, the establishment of monetary stability and low taxes. All this should create conditions for the creation and further development of a strong production basis for the domestic economy.

Critical view

Some experts view the return to the gold standard critically. The history of economics knows positive examples of such government actions, but now is a completely different time. Factors that correspond to the actual state of the economy should be taken into account.

The transition of the world's major economies to being backed by gold will be the moment of collapse of the system based on settlements in American currency.

Monetary-type inflation will create uncertainty risks for capital investments and effectively destroy savings, which are vital for financing. Some believe that currency management cannot lead to economic growth.

But the real situation is that if the countries with the largest economies in the world begin the transition to the gold standard, this will mean one thing - the end of the dollar-based currency system. Whether the ruble will be tied to physical gold or not depends on the decision of government authorities. The decision must be made taking into account the size of actual budget expenditures and the presence of long-term obligations.

Such steps by individual countries will lead to a split into two camps: some will use the gold standard, while others will not be able to do this or simply will not want to take this step.

China's policy of increasing its gold reserves and increasing production volumes could make the yuan an international currency and a competitor to the dollar.

Among those states that can do this and are systematically preparing for the introduction of the gold standard is China. The demand for gold from China in recent years has always been one of the highest; government policy is aimed at accumulating gold reserves and stimulating private investment in the metal. These measures allow the Chinese economy to protect itself from external and internal negative factors.

Chinese authorities often blame American policy for the current situation in the gold market. The US is using its huge gold reserves to suppress other currencies in order to maintain the dollar's leadership. Further strengthening of the Chinese economy may allow the internationalization of the yuan, which will become a competitor to the dollar.

Gold has historically played an important role in protecting the economic security of the state. The introduction of a gold standard, taking into account all the accompanying restrictions, can really save the country's economy in times of crises and wars.

There is another opinion regarding the introduction of the gold standard. Economists say that such a monetary system will not be sustainable, since the supply of money will be controlled not by banking institutions, but by mining companies. The price of gold will constantly change, especially depending on the discovery of new deposits of the precious metal, and inflation will be replaced by deflation.

Of course, the volume of production of the yellow metal will affect the economy, but not as dramatically as the “printing press” of the US Federal Reserve.

This development of events is possible, but has several open questions. The rate of gold production is growing much slower than the US Federal Reserve's money printing is increasing. Such actions always lead to inflation and undermine the stability of the monetary system. Under the gold standard, it is simply impossible to make money indefinitely.

conclusions

Is the Russian ruble backed by physical gold? No, today Russia does not have a monetary system based on the gold standard. Theoretically, such a fundamental economic decision can be made; the current geopolitical situation and the state of the gold market allow this to be done. Such measures will require strict regulation of the credit sector and a systematic policy regarding the regulation of the ruble exchange rate from the leadership of the Central Bank.

On August 15, 1971, US President Richard Nixon, speaking on television, announced the complete abolition of the gold backing of the dollar.

Currency is what rules the modern economy, along with other assets such as oil and precious metals. This is an invention that became significant for humanity and marked the beginning of a new era in trade relations. If in the Middle Ages the value of a coin was measured by its real component - metal, now paper money only denotes the benefits that lie behind it. Many of us are far from the financial sphere, but when making savings or getting involved in the trading system, it is worth finding out which currency is the most stable and backed by gold.

Calculation system

Nowadays, the economy of any country is unthinkable without international connections; they firmly connect a variety of industries, making both companies and states dependent on each other. In the financial market, everything depends on currencies, because they pay with money, save it for future use, and allocate it for special needs. Until 1971, there was a “gold standard” that regulated the value of currencies, due to the fact that all currencies were exchanged for dollars, and those for gold. After this date, GDP (gross domestic product) came into play, that is, the volume of production and sales began to play a role. This was a completely logical decision, since the volumes of gold that were available no longer covered the demands of the financial market, ceasing to be a regulator.

Such changes led to the emergence of empty currencies not backed by metal. Currency ratios among the leading countries have ceased to be transparent, giving rise to numerous speculations in the market. Countries with low economic levels have entered the fray by buying up foreign currency by artificially increasing their national currency. But the system requires balance, so all the transactions, seemingly hidden and insignificant, surfaced after 2008, in the form of inflation in individual countries and crises in major economic powers. As a result, the world is filled with dollars, and it is now very difficult to understand the calculations of their liquidity.

The balance of power on the planet

If earlier countries with large reserves had strong currencies, backed by gold and stable, now leadership can be achieved through the strength of the economy and skillful policies. The category of the strongest and richest includes the USA, Japan, Great Britain, and Switzerland. Producing countries – China and Germany – are also increasing their turnover. There is also the factor of the availability of natural resources, which Brazil, Russia, and the UAE have.

Each of the parameters is important and affects the balance of power on the modern financial Olympus. The stability of the currency is determined by the volume of the country's gold and foreign exchange reserves. Thus, the largest representatives are the USA, Germany, Italy, France. These countries not only have the largest percentage of gold in the gold and foreign exchange reserves, but also the largest volume of the precious metal compared to other countries. This safety cushion allows these countries to survive during crises and not go down in the event of currency fluctuations. The leaders in terms of GDP are the USA, China, Japan, Brazil, Germany and France.

Leading currencies

Let's look at the strongest world currencies. The franc is a reliable currency, as Switzerland is the world's largest banker and its gold reserves cover the currency by about 40%. Stability encourages people to use this currency. The euro is a strong currency introduced throughout the EU; it is a reserve currency and ranks second in the foreign exchange market after the dollar. Despite the crises, the abundance of gold reserves and the influence on many industries and markets make the euro one of the priority currencies.

The Japanese yen also plays an important role, especially in Asia. It is sufficiently backed up with gold to not cause concern, but may fluctuate during cataclysms or other incidents. The New Zealand dollar is an active participant in trading, but is a fairly rare currency outside the country. It is stable, since the country’s GDP is growing steadily, the country has few debts, and there are minimal reasons that would prevent its currency from growing.

USA - position in the world

The American dollar was not included in the general list and for good reason. This currency is number one on the international market and deserves special attention. Backing the dollar with gold has come into question recently as US influence has increased. This country is very strong; it is present in almost all major transactions as a participant, guarantor or intermediary. The country's political influence is great, its GDP is one of the largest in the world, and its economy is constantly developing.

The US financial market is developed; the largest exchanges, funds, and lending services operate here. American businessmen are taking over smaller companies and expanding their offices, promoting globalization. The United States has a reputation as a strong military power with a number of invasions to its credit; it leads the NATO alliance, which controls most of the planet, possessing enormous potential, modern weapons and developments. This gives the country weight on international platforms, because many decide that it is better to unite with such a country than to quarrel.

US stability guarantees

The United States is a country that has a vast territory, natural resources, gold reserves and influence. The volume of trade within the country is not comparable to the huge volumes of exports to all countries of the world. American enterprises operate in the poorest countries, receiving maximum profits from their products thanks to low costs. All transactions, be it foreign exchange transactions, trade and economic transactions, loans, are carried out in dollars, which daily supports the demand for this currency.

Hidden threat

Nevertheless, at a time when the dollar was no longer backed by reserves, not only foreign exchange reserves, but also gold, the first doubts arose about the reliability of such a currency. And there is a rational grain in this. Since the end of the gold standard, the people of the United States have been acutely aware of the changes. The state has always sought to provide the population with a large volume of loans in order to maintain the currency through mutual obligations. Now, with the same level of lending, it is becoming increasingly difficult for citizens to cope with their obligations to the bank, as a result, many are losing what they have acquired through their labor. Sensing the problem, the authorities decided to pump more money into the economy, which led to a gradual but very noticeable depreciation of the currency. Over the past forty years, the dollar has dropped five times. Confidence in the currency was partially lost, but it still remained among the leaders.

The traditional argument that the dollar is not reliable is the gap between reserves and the volume of the currency. A large percentage is not backed by gold, because only 5 dollars out of 6 corresponds to the equivalent in gold. However, banknotes issued by a government bank are not so easy to verify, as there is not enough gold in the entire world to back every dollar.

The United States has a huge foreign debt, amounting to more than ten trillion. This is a record figure, since its percentage of GDP is more than 100%, which is not a sign of economic stability.

The secret of the dollar's popularity

Why is this currency so reliable in the eyes of the consumer, not backed by gold, even if it belongs to a very developed country? After all, in theory, a rupee or a ruble should inspire more confidence. It seems that it's all about the human factor. The aura of power and glory of the United States is actively being introduced into the masses; this country is either respected or feared; people strive to get there and perceive the business developing there as a standard. The propaganda of this country's influence, as well as examples of its aggressive foreign policy, force many countries to become its financial partner. The international system of trading on currency exchanges has no analogues; it is a well-functioning and proven mechanism over the years, and it is very skillfully used by the United States, the country where the implementation of the most progressive economic models of society began and flourished.

Demand creates supply and this is exactly what happened with the dollar. Partner countries paid and received a loan of this currency, they kept deposits in it, and invested in it. It is the reserve currency of all countries, so it binds the whole world into a single whole. By and large, what plays a role here is rather trust in the currency and partnership, which is why the dollar is still not losing ground. This currency is often called a time bomb, because someday the rate will collapse, and there will be nothing behind the paper of American bills that could give it value. But for about 40 years now, the dollar has been staying afloat, the United States is throwing new banknotes onto the market, and at auction all indicators depend on this exchange rate. It is not known whether the crisis in Europe and the Middle East will result in a default for these regions, but with such developments in the political picture, the dollar is invariably strengthening, which suggests that it will not give up its leadership.

When choosing a currency to deposit, many focus on the usual indicators - exchange rates, presence in reserve funds, economic strength, political influence. After studying the picture, most choose the dollar. The fact that he is not provided with gold worries few people, because our life is not eternal. By making such an investment, you are inevitably supporting the US economy, giving it the opportunity to continue to lead the financial market. Since the situation in the world is unstable, it is better to look at more reliable sources, such as precious metals, which are becoming increasingly rare and valuable. This way you can be sure that the balance of political forces will not play a decisive role in your investment.

44 years ago, on August 15, 1971, US President Richard Nixon abolished the “gold standard,” thereby finally nullifying any backing for the dollar, and indeed all world currencies in general. From that day on, money turned into pieces of paper and was supported only by the faith of consumers in their solvency. Paradoxically, few people noticed this revolution.

A little history

In its familiar form, the “gold standard” arose in the 19th century in connection with the industrial revolution in European countries. Growing production volumes required expansion of sales markets, which resulted in the rapid development of international trade. And there was a need to find the most convenient tool for mutual settlements. Such a tool was the linking of national currencies to a fixed amount of gold: it made it possible to easily track the mutual rates of any currency pairs and quickly determine the trade balance of each state (the relationship between the value of imports and exports).

In 1867, all this was finally consolidated by the Prague currency system. But at the beginning of the 20th century, most countries could not cope with the costs associated with the First World War, and untied their currencies from gold in order to print money in unlimited quantities. The only currencies that remained pegged to gold were the American dollar and the British pound. They began to acquire the status of an international means of payment. As a result of the Genoa Conference of 1922, the system became official and was called the gold and currency system, or gold exchange system. But then the Great Depression (1929–1933) struck the United States, money depreciated sharply, and the same “leading countries of the world” also refused to link their currencies to gold (England in 1931, the USA in 1933).

This, of course, did not lead to anything good, and a year later, on January 30, 1934, President Roosevelt ratified the Gold Reserve Act, according to which the dollar was again tied to gold at a fixed rate - $35 per troy ounce. In July 1944, at a conference in Bretton Woods (USA, New Hampshire), the monetary system now known as the “gold standard” was finally adopted. The currencies of 44 countries around the world were pegged to the dollar at a rigidly established rate, and the dollar was pegged to gold (according to the “Golden Act”).

Why was the gold standard abandoned?

It is generally accepted that Washington’s abandonment of the “gold standard” was a reaction to French President Charles de Gaulle’s attempt in 1968 to “accumulate a shipload of American currency and immediately demand that the United States exchange it for gold.” By the way, in two years he managed to buy more than 3 thousand tons of this precious metal from the United States. However, the real reasons were completely different.

The fact is that the suspicions that the number of dollars in circulation did not correspond to the volume of US gold reserves were well founded. Although the American economy was the world's leading economy after World War II, in reality its foreign trade led to a drain on gold. On the other hand, according to the established rules, the Americans were not obliged to disclose the size of their gold “piggy bank” and therefore even then they could print slightly more green pieces of paper than was allowed. And, finally, due to the fact that the economies of many countries were so heavily “saturated” with the dollar that even without gold backing they could not refuse it, the idea of ​​​​abolishing the “gold standard”, which would completely untie the Americans’ hands, was literally in the air . Realizing all this, the US government without hesitation took a step unprecedented in its impudence and unilaterally announced a complete abandonment of the “gold standard”.

The following two facts make this situation even more striking. First: at that time, the lion’s share of the world’s gold was stored in the United States, and no one had access to it. (By the way, the Germans still don’t have it.) Second: American money, in essence, is not even American. These are just debt obligations of the 12 largest private commercial banks with federal agency status (FRS).

However, why the US decision did not cause any serious protests from other states is quite understandable. Because everyone wanted to cheat in solving their own economic problems by issuing unsecured banknotes.

What did we pay for this?

Imagine a flying airplane that has 197 steering wheels - one for each country. And everyone is trying to control the winged car in their own way. But the degree and sphere of influence of the helmsmen is different. Some people have a fuel line tap in their hands instead of a steering wheel, others have a curtain for supplying air to the engine, etc. Some pilots want to fly to Honolulu, others want to fly to Nairobi, and others want to land immediately. Can you imagine the final trajectory of this flight? This is the overall rate of the world economy.

The economy, divorced from clear and stable guidelines, has ceased to provide adequate signals for making management decisions. In six years, the United States simply printed money out of thin air in the amount of 23% of its GDP, and the euro system, which at first glance seemed to be more protected from fraud, turned out to be doing the same thing. By the end of 2016, “using American QE technology” it will “print” 10.2% of the EU’s GDP.

The sun peeked out for a second from the gray mass of heavy clouds and disappeared again into the pool of the cold February sky. The sailor of the French transport ship looked disappointedly towards the gray skyscrapers of New York and trudged to his cabin. It was rumored among the crew that the ship was chock full of money: green American bills.

“So much money,” Jean thought, involuntarily spreading his hands to the side...” You can buy that dress for Marie at Galeries Lafayette, but what’s more, you can buy a whole shopping center and even more... and Jean’s hands crawled to the sides again...

Meanwhile, a tall man of mature years, straightening the lapel of his expensive jacket, which failed to hide the military bearing of the owner, looked at his interlocutor, smiled slightly and spoke in his usual confident tone:

Gold does not change its nature: it can be in bars, bars, coins; it has no nationality, it has long been accepted by the whole world as its constant value... We want to exchange 1.5 million US dollars for gold at the rate of 35 dollars per ounce!

The interlocutor’s face changed for a second, he sucked in a breath, tilted his head to the side, and hissed:

You will be in serious trouble!
- In this case, we will withdraw alliance military personnel from French territory and evacuate NATO headquarters and NATO and US military bases!

This difficult conversation took place on February 4, 1965 between General Charles de Gaulle and American President Lyndon Johnson. The result will be 1,200 tons of gold, which the French president will take home, as well as the abolition of the gold standard by America.

From early childhood he knew that he was born for something great.

The future general was born on November 22, 1890 in the city of Lisle. His family belonged to an old aristocratic family. Charles's father was a teacher of philosophy and French at the Jesuit College. Mother was a religious woman and incredibly energetic. Later, in his “Military Memoirs,” de Gaulle would write: “My father, an educated and thoughtful man, brought up in certain traditions, was filled with faith in the high mission of France. He introduced me to her story for the first time. My mother had a feeling of boundless love for her homeland, which can only be compared with her piety. My three brothers, my sister, myself - we were all proud of our homeland. This pride, mixed with a sense of anxiety about her fate, was second nature to us.”

From childhood, the boy was instilled with a love of reading; Charles rarely appeared at school, since his father preferred home education and the children often took exams externally. The boy was especially interested in military affairs, history, philosophy and literature. Later he would say about himself:

“In my youth, I was especially worried about everything connected with the fate of France, be it the events of its history or its political life. I was interested and at the same time outraged by the historical drama that was constantly playing out in the arena of political struggle. I admired the intelligence, enthusiasm and eloquence of many of the participants in this drama. At the same time, it saddened me that so much talent was wasted senselessly as a result of political chaos and internal strife, especially as the first harbingers of war began to appear at the beginning of the twentieth century. I must say that in my early youth the war did not inspire me with any horror and I extolled what I had not yet experienced. I was sure that France was destined to go through the crucible of its greatest trials. I believed that the meaning of life was to accomplish an outstanding feat in the name of France...”

In the fall of 1909, the future general entered the Saint-Cyr Military Academy, then the Higher Military School in Paris.

During the First World War he was wounded three times and captured. After his release, he returned to Saint-Cyr again, but as a teacher of military history.

During World War II, Charles de Gaulle was appointed commander of a tank brigade, and after receiving the rank of brigadier general, he was appointed deputy minister of national defense. However, as we know from history, under the aggressive pressure of the German army, France quickly lost its position. The government leadership capitulated. The population, for the most part, took what was happening for granted.

Charles de Gaulle was forced to enter into negotiations with Churchell. Later he would speak via radio directly from England with an address to his people:

“The military leaders who led the French army for many years formed a government. Citing the defeat of our armies, this government entered into negotiations with the enemy to end the fight. Of course, we were suppressed and continue to be suppressed by the enemy’s mechanized, ground and air forces. We are forced to retreat not only by the numerical superiority of the Germans, but by their tanks, planes, and their tactics. It was the tanks, planes, and tactics of the Germans that took our leaders by surprise to such an extent that they plunged them into the position in which they now find themselves. But has the last word been said? Is there no more hope? Has the final defeat been dealt? No! Believe me, because I know what I’m talking about: nothing is lost for France, we will be able to win in the future... This war will not be limited only to the long-suffering territory of our country. The outcome of this war is not decided by the Battle of France. This is a world war. Despite all the mistakes, delays, suffering, we will be able to win in the future!! »

In response to the general's emotional appeal, the French organized a fight against the Germans in the occupation zone and beyond. Petain's government, subordinate to Hitler, sentenced de Gaulle to death in absentia.

This was the beginning of the Resistance, where Charles de Gaulle led the united patriotic forces of Free France.

After the end of the war, de Gaulle will try to carry out some reforms in France, in particular, he is trying to abolish the 1946 constitution, which significantly limited the power of the head of government, but does not find sufficient support to implement his ideas. He leaves his post and settles in the village for a while, writing, reading and spending time with his family.

The Algerian crisis of 1958 helped Charles de Gaulle return to power. The bourgeois majority of parliament came up with a proposal to return him to the presidency. De Gaulle accepts the proposal and issues a new Constitution, which significantly expands his powers and limits the role of parliament.

"Economic Austerlitz" by Charles de Gaulle

Charles de Gaulle, to put it mildly, did not have a very warm attitude towards America. After France's atomic bomb test yielded a positive result, he announced his country's refusal to participate in NATO. This decision was also influenced by the visit of the French general to the USSR, where he was shown Soviet missiles with nuclear warheads, and implicitly pointed to the NATO headquarters located in Paris. In 1963, America strongly “recommended” France to participate in the creation of a “multilateral nuclear force” under the command of the Pentagon, to which de Gaulle responded with a categorical refusal. And the final touch was the withdrawal of the French Atlantic fleet from NATO command.

Naturally, de Gaulle’s policies irritated the Americans; they called him “a crazy old man.” Roosevelt and Churchill, who believed that there would be no problems with France, were constantly rebuffed by the “arrogant Frenchman,” or, as they also said, “the hidden fascist.”

But that was only the beginning. Once, former Finance Minister Joseph Caillot told General de Gaulle an anecdote: “At the Drouot auction in Paris, a painting by the famous Raphael was put up for sale. An Arab, in order to take possession of a masterpiece, offers oil, a Russian - gold, and an American, constantly raises the price and acquires Raphael for 10 thousand dollars.” “What’s the joke?” - de Gaulle was surprised. “And the fact,” the former minister answered, “is that the American got Raphael for only three dollars... That’s exactly how much the pile of paper on which all this money was printed costs.” The general was very impressed by the anecdote; he called dollars “green candy wrappers” and was preparing an “economic Austerlitz” for America.

So, on February 4, 1965, Charles de Gaulle, at a meeting with Lyndon Johnson, announced his intention to exchange $1.5 billion of French government reserves for gold, in accordance with the Bretton Woods agreement, which set $35 per ounce, which is equivalent to 1.1 g for 1 dollar. All other negotiations were left to the financial specialists of Paris. According to the rules of the Gold Pool, the exchange could only be made in the US Treasury. Therefore, first one ship “filled to the brim” with money came to the shores of New York, and then a plane loaded to the brim with green banknotes “pulled up” for the exchange. By the end of 1965, out of 5.5 billion dollars, the French had no more than 800 million left, the rest of the amount returned to the state treasury in the form of gold.

Following France, other countries also decided to pull off the “Charles de Gaulle scam”; the Germans, “envying” the resourcefulness of the French, also reached for the golden mountains of hard currency. Ludwig Erhard, Federal Chancellor of the Federal Republic of Germany, nevertheless showed ingenuity, demonstratively condemned the French for their “betrayal,” and he himself quietly collected dollars and also presented them to America for exchange. Moreover, the amount was several times more than the one and a half million dollars brought by the French. Following Germany, the central banks of Canada, Japan and other countries wanted to return the yellow metal. US gold reserves were melting before our eyes; by 1968, the treasury had given away half of its hard currency. In March of the same year, the country's leadership limited the free exchange of dollars for gold, and on August 15, 1971, American President Richard Nixon announced the abolition of the “gold standard” and with it the Bretton Woods agreement, completely uninterested in the opinions of the remaining parties to the agreement. The dollar, and all other world currencies, thereby simply turned into pieces of paper, and existed only due to the consumer’s faith in their strength.

Thus, Charles de Gaulle’s “economic Austerlitz” can be called a failure. He wanted to push the “green candy wrappers” into the background, to return the yellow metal to its former importance, but the opposite happened. In addition, several strikes soon took place in France, demonstrations and riots began; most historical sources claim that this situation arose with the help of CIA agents. De Gaulle left the presidency without waiting for the end of his second electoral term.

Due to the military power of America, as well as the influence of the NATO military bloc, the dollar has taken a leading position in international payments. Exchange rates were no longer strictly fixed and were constantly changing under the influence of various factors. It has become almost impossible to control the dollar exchange rate.

Speculators began to take advantage of the current situation, amassing huge fortunes from exchange rate movements. The foreign exchange market began a “new life”, in which an unconstrained America launched printing presses at full capacity, and tons of “green papers” flew into the world.

In the mid-18th century, the previously dominant agricultural economy lost ground and was gradually replaced by industrial production. The industrial revolution in different countries had its own characteristics, but in general this entire process can be traced back to the 19th century. Factories grew in place of manufactories, and manual labor gave way to machines. Production forces based on the machine industry were formed quickly, capitalism knocked on the doors of developed European countries, and with it a gold standard system appeared.

The gold standard is a system of calculations where a certain amount of gold is taken as a unit.

Why gold?

High cost for small quantities

Stores well

Can be easily taken apart and put back together again

Easy to recognize

Before gold, of course, there were other “metal” standards, such as bronze and later silver. But they were inferior to the yellow metal in many qualities and characteristics.

However, it turned out to be impossible to constantly use gold directly. Firstly, the quantity of goods is steadily growing, but ensuring an equal growth of “gold money” is not so easy. Secondly, gold coins do wear out, and “coin clipping” was also popular, when scammers cut off the edge and passed off a smaller coin as a full-fledged one. There were “measures of protection” in the form of notches, but they were also bypassed by drilling holes and sawing out parts, filling them with other metal. As a result, it was impossible to determine the real value of the coin. Thirdly, transporting gold is a very labor-intensive and costly process, if only because it weighs a lot. Fourthly, if a certain amount of gold is lost, difficulties arise in restoring reserves; here you cannot turn on the printing press; in order to complete the required amount, you need to look for the precious metal directly. And finally, fifthly, monetary circulation was disrupted due to the constant “damage of coins,” this is when the government elite reduced the weight of coins or the content of precious metal in them, without official notification.

Therefore, the appearance of paper money was an excellent way out of the situation, given that they were originally backed by gold. They can otherwise be called a certificate that gives its owner certain rights. When settlements took place with paper money, people exchanged among themselves the right to use a certain amount of gold, without directly transferring the gold metal itself. This was both convenient and safe for the following reasons:

Money can be of different denominations - this allows you to use it in both large and small transactions;

Paper money will not lose value when worn;

Paper money is easy to replace and restore.

Later, paper money began to be used by the government to have control over the state as a whole.

The gold standard works simply and reliably: the monetary unit issued by a country corresponds to a certain amount of gold, using these data, countries receive an exchange rate.

Officially, the gold standard was first established in 1867 by the Paris Monetary System; at the conference, an interstate agreement was drawn up, where gold became the main form of world money.

The gold standard had many supporters. Of course, the system made the economy stable, since the government could not turn on the printing press and draw more pieces of paper than there was gold to provide currency. It turns out that the amount of money was theoretically tied to the country's gold reserves. At the first request, the owner of the monetary unit could exchange for the corresponding amount of gold.

The gold standard was originally adopted in Great Britain in the late 18th century. Over time, other countries also switched to this system. First Germany (1871-1873), then the USA (1873), France (1878), Russia (1895-1897) and Japan (1897). Gold moved freely between countries and served as world money, supporting the exchange rate of national currencies of countries.

This situation continued until the First World War. Those. gold acted everywhere as money, and paper currency seemed to be its representative. At the same time, paper money was “easily” exchanged for the yellow metal, and the exchange rates were clear to everyone. This period in financial history was called the “golden age.” The time of “the freest capitalism” while maintaining a fixed exchange rate.

The collapse of the gold standard and the Bretton Woods Conference

The inflation that arose during the First World War led to the fact that it became impossible to maintain the exchange of currency for gold, and accordingly this inevitably led to the collapse of the “gold standard”. The dominant countries tried to revive it in the 1920s, at least in a modified form, but the global economic crisis that began in 1929 made this impossible. In the UK, the gold peg to the pound sterling was abolished. This period is characterized by constant adjustment of currency parities, strengthening of exchange controls and the introduction of import restrictions.

From July 1 to July 22, 1944, a conference was held in the state of New Hampshire (USA), named after the resort - Bretton Woods. 44 countries signed agreements, based on which it followed:

A troy ounce of gold costs $35;

Stable exchange rates have been determined for participating countries;

National banks maintain the exchange rate of their country, in relation to the main currency, through foreign exchange interventions;

Exchange rates can only be changed through revaluation (increasing the exchange rate of the national currency in relation to the currencies of other countries) or devaluation (decreasing the gold content of the monetary unit under the gold standard)

The main parts of the system were also organized: the International Monetary Fund and the International Bank for Reconstruction and Development. These organizations provided loans in foreign currency to support unstable currencies. Monitored compliance with the rules by the participating countries and ensured currency cooperation.

As a result of the conference, the United States received currency advantages, “pushing aside” its previously dominant competitor, Great Britain. This contributed to the establishment of the Dollar Standard. In the mid-20th century, America concentrated 70% of the world's dollar reserves on its territory. The dollar, a currency convertible into gold, became the basis of currency parities, practically the main means of international payments, reserve assets and foreign exchange interventions.

The US national currency has essentially become world money.

However, this system could only function as long as America's gold reserves ensured the exchange of dollars into gold. The collapse of the dollar was a matter of time. The American “mountains of gold” were melting, despite all the efforts of the American government. It was very problematic to directly carry out the exchange: this process took place exclusively at the state level, and only at one point - in the American Treasury. However, the situation still got out of control: from 1949 to 1970, gold reserves in the United States decreased by more than half - from 21,800 tons to 9,838.2.

The final point in this “regrettable metal leak” was put by the French President Charles de Gaulle, and it is this “strategic event” that is described above.

Additional reasons for the crisis:

The 1967 currency crisis coincided with a decline in economic growth;

Increased inflation had a very negative impact on the ability of firms to compete. “Hot” money moved speculatively due to “exchange rate distortions,” which, in turn, appeared due to different inflation rates in different countries.

The currency crisis due to speculation worsened in the 1970s. The dollar appeared in excess in one country or another, causing economic instability.

Currency fluctuations were also exacerbated by chronic deficits in some countries and surpluses in others.

Failure to comply with the principles of the Bretton Woods system. The economies of the USA and Great Britain were weakening and they tried to compensate for the decline by issuing national currencies; this was contrary to the interests of other countries.

The influence of transnational corporations (TNCs). TNCs are organizations with short-term assets in different currencies. They may exceed the reserves of banks in the countries in which they are located, thereby escaping national control. TNCs are also involved in currency speculation on a large scale.

Thus, there was a need to revise the existing monetary system. Its principles no longer corresponded to the reality of that time.

A completely new currency order, taking into account the transition to floating rates, was secured by agreements signed at the conference in Kingston.

The amended IMF Charter confirms that the currencies of various countries are not tied to gold, and, accordingly, excludes the possibility of establishing a fixed ratio of currency pairs based on gold parity. Thus, the Jamaican monetary system replaced the Bretton Woods system.

The consequences of abandoning the gold standard were not long in coming. The balance in economic relations between world states has been sharply disrupted. Lending surged as large amounts of US dollar currency remained in the reserves of central banks around the world.

America's lending grew unabated, and member countries began hoarding dollars. The rest of the world also accumulated “green paper,” because if dollars were scarce and reserves did not grow or even fell, speculators could bring down the currency of that country by devaluing it.

The strong influx of US currency around the world contributed to an increase in the volume of global credit, which continued to grow until 2007. Banks were constantly trying to increase profits, lending was in full swing.

America, distributing its own non-convertible money to the whole world, popularized globalization and free trade. States spent money “right and left.” In the 1990s, the foreign trade deficit crept up to a critical level, but absolutely no action was taken to correct it.

There is, of course, nothing wrong with free trade. In theory, each country produces a certain useful product and then exchanges it for a useful product of another country, through commodity-money relations. However, such a scheme is only possible with the functioning of the gold standard. When such relations were being formed in the world, it was difficult to imagine that in the future everything would be turned upside down and mutual payments would be made using unsecured money created on the initiative of one country.

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