In the early 1960s, the fixed value of the U.S. dollar against gold was considered overvalued under the Bretton Woods regime. A significant increase in domestic spending on President Lyndon Johnson`s Great Society programs and an increase in military spending following the Vietnam War gradually exacerbated the overvaluation of the dollar. However, the increasing state intervention in the national economy has led to a sense of isolationism that has had a profoundly negative impact on the international economy. The priority of national objectives, the independence of national action in the interwar period and the inability to recognize that these national objectives could not be achieved without any form of international cooperation – all this led to a policy of «begging-neighbours» such as high tariffs, competitive devaluations that contributed to the collapse of the international monetary system based on gold, political instability and international war. The lesson was learned, as said the principal architect of the new Bretton Woods dealer Harry Dexter White: Tags: Bretton Woods, WWII, Central Bank, inflation, history, dollar standard, dollar standard, members of the international financial system members of the Bretton Woods system agreed to avoid trade wars. But they could regulate their currencies under certain conditions. For example, they could take action if foreign direct investment began to destabilize their economies. They could also adjust their monetary values to rebuild after a war. The Bretton Woods Agreement was concluded in 1944 at a summit in New Hampshire, USA, on a website of the same name.

The agreement was reached by 730 delegates representing the 44 allied nations who participated in the summit. Delegates, as part of the agreement, use gold standard gold In the simplest terms, the gold standard uses a system to understand the value of the currency, and this means that a currency is compared to how much it is worth in gold and at what price it can be exchanged for gold. to establish a fixed exchange rate. While the Bretton Woods system was agreed in 1944 and the IMF was established in 1945, the system was commissioned in 1958. At that time, the currency conversion was linked to the U.S. dollar, the exchange rate being based on the figure of $35 per ounce of gold worldwide. As Investopedia noted, the system was more permissive than a gold standard, but predictable and non-volatile.