By Bill Wilson
The Bretton Woods monetary system, which was established after World
War II and solidified the U.S. dollar’s place as the world’s reserve
currency, is collapsing before our eyes. That’s too bad, because that
status may be one of the last assets the American people have left in
the global economy.
For the past 65 years, that status has guaranteed a greater demand
for dollars worldwide since it can be used in most transactions. This
has resulted in commodities priced in dollars, generated for a larger
flow of capital back to the U.S., and allowed the nation to borrow at
low interest rates.
The premise for the dollar’s special status was two-fold. The first
was military supremacy and the wide protection offered by courageous
U.S. forces abroad. For other nations this has meant having a strong
ally against potential invaders, but also protected trade routes, and
access to wide markets and first class technology. By and large, the
U.S. has kept up this part of the bargain.
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