oussama94
05-28-2017, 19:32
The Bretton Woods Agreement was in operation from 1944 to 1971,
when it was replaced with the Smithsonian Agreement, an international
contract of sorts pioneered by U.S. President Richard Nixon out of the necessity
to accommodate for Bretton Woods’ shortcomings. Unfortunately,
the Smithsonian Agreement possessed the same critical weakness: while
it did not include gold/U.S. dollar convertibility, it did maintain fixed exchange
rates—a facet that did not accommodate the ongoing U.S. trade
deficit and the international need for a weaker U.S. dollar. As a result, the
Smithsonian Agreement was short-lived
when it was replaced with the Smithsonian Agreement, an international
contract of sorts pioneered by U.S. President Richard Nixon out of the necessity
to accommodate for Bretton Woods’ shortcomings. Unfortunately,
the Smithsonian Agreement possessed the same critical weakness: while
it did not include gold/U.S. dollar convertibility, it did maintain fixed exchange
rates—a facet that did not accommodate the ongoing U.S. trade
deficit and the international need for a weaker U.S. dollar. As a result, the
Smithsonian Agreement was short-lived