Post-war global capitalism suffered from a huge shortage of dollars. The U.S. had huge trade surpluses and U.S. reserves were huge and growing. It was necessary to reverse this river. Although all nations wanted to buy U.S. exports, the dollars had to leave the United States and be available for international use so that they could do so. In other words, the United States should reverse global prosperity imbalances by chartering a trade deficit financed by the U.S. outfed of reserves to other nations (a deficit in the U.S. fiscal balance). The United States could have a financial deficit, either by building plants, or by building plants, or by foreign nations. Remember that speculative investments were discouraged by the Bretton Woods agreement.

Imports from other nations were not attractive in the 1950s because American technology was up to date at that time. This is how multinationals and global aid from the United States originated. [29] Prior to the agreement, most nations worked according to the gold standard by maintaining the value of their currency in relation to the cost of gold and by allowing those who held the silver to convert their silver into gold. The Bretton Woods system changed this situation by fixing the U.S. dollar as a global reserve currency and setting its value at 1/35 of an ounce of gold. The United States has retained gold reserves in the Treasury and other nations at the price of its money in U.S. dollars. The goal was to make it easy to convert any currency into a dollar that had a known value in gold. This has helped to facilitate currency exchange. The Bretton Woods Agreement was a financial agreement negotiated in 1944 towards the end of World War II. The Allies met in Bretton Woods, New Hampshire, to discuss the international economy.

During the negotiations, they agreed to set the value of the us dollar against the value of gold and to attach it to the currencies of other countries to the U.S. dollar. The agreement also created the International Monetary Fund (IMF). The Bretton Woods system remained in place until the end of the U.S. gold standard in 1971. There was broad consensus among powerful nations that the lack of exchange rate coordination during the interwar period had exacerbated political tensions. This facilitated the decisions of the Bretton Woods conference. In addition, all the Bretton Woods governments agreed that the monetary chaos of the interwar period had brought some valuable lessons. Another objective of the agreement was to create institutions that finance the various national development projects of the Member States and also conduct an international monetary policy. One of the objectives of the system was the need for an international reserve. The Bretton Woods agreement was a financial agreement and these financial institutions had to be created to effectively implement the content of the agreement.

In the late 1960s, there was a rush to sterling and then the dollar. It was caused in part by a growing trade deficit in the United States. As the United States was unwilling to use protectionism as a measure to reduce imports, the link between the dollar and gold was severed in 1968. There was a short period of a floating rate of wooden Bretton, but it actually ended in 1971. Among the structural changes that have undermined the Bretton Woods system, the Bretton Woods rules, set out in the articles of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), provide for a fixed exchange rate system. The rules also aimed to promote an open system by requiring members to convert their respective currencies into other currencies and to make free trade. As chief international economist at the U.S. Treasury, Harry Dexter White designed the U.S. Cash Access Project in 1942/44, which rivaled Keynes`s plan for the British Treasury.