oussama94
05-28-2017, 19:37
After the demise of all the various exchange rate regulatory mechanisms
that characterized the twentieth century—the gold standard, the Bretton
Woods standard, and the Smithsonian Agreement—the currency market
was left with virtually no regulation other than the mythical “invisible
hand” of free market *******ism, one that supposedly strived to create
economic balance through supply and demand. Unfortunately, due to
a number of unforeseen economic events—such as the Organization of
Petroleum Exporting Countries (OPEC) oil crises, stagflation throughout
the 1970s, and drastic changes in the U.S. Federal Reserve’s fiscal
policy—supply and demand, in and of themselves, became insufficient
means by which the currency markets could be regulated. A system of sorts
was needed, but not one that was inflexible. Fixation of currency values to
a commodity, such as gold, proved to be too rigid for economic development,
as was also the notion of fixing maximum exchange rate fluctuations.
that characterized the twentieth century—the gold standard, the Bretton
Woods standard, and the Smithsonian Agreement—the currency market
was left with virtually no regulation other than the mythical “invisible
hand” of free market *******ism, one that supposedly strived to create
economic balance through supply and demand. Unfortunately, due to
a number of unforeseen economic events—such as the Organization of
Petroleum Exporting Countries (OPEC) oil crises, stagflation throughout
the 1970s, and drastic changes in the U.S. Federal Reserve’s fiscal
policy—supply and demand, in and of themselves, became insufficient
means by which the currency markets could be regulated. A system of sorts
was needed, but not one that was inflexible. Fixation of currency values to
a commodity, such as gold, proved to be too rigid for economic development,
as was also the notion of fixing maximum exchange rate fluctuations.