Bretton Woods Agreement and Unlimited Dollars

The Bretton Woods Agreement and the Unlimited Dollar

America! The land of dreams and the paradise of opportunities. Everyone has definitely heard the illusion called the American Dream at least once. Houses, cars, purchasing power, high technology, unlimited freedom and more. But when we say more, we mean more of everything. Homeless people roaming the streets, people who have lost their normal family structure because of LGBT rights, people who are far from aesthetics with their old metropolises, people who have become zombies from drugs, Epstein Island incidents, a pedophile president and many more. There is really no limit to the money that is circulating there. Especially after the Second World War, the USA started very bloody actions that changed the course of the war and frightened other countries both in the heart of Europe and the easternmost part of Asia. It made the whole world feel the fear of nuclear weapons with the atomic bombs detonated in Japan. Moreover, it came to the aid of its brother England just in time and brought the end of Hitler's Germany. After the war, Japan entered into a strong military alliance with the USA. According to the Constitution and security agreements signed after the Second World War, Japan's defense capabilities were limited and the USA had important military bases in Japan. Still, part of Japan's defense policy is based on support from the US. Even without a formal agreement, people say that Japan is de facto tied to the US. Germany is a major member of NATO (North Atlantic Treaty Organization) and therefore has a strong military alliance with the US. The US has military bases in Germany, which were deployed during the Cold War to counter the Soviet threat.

Now let me ask you, how can you surrender your defense policy to a country that committed massacres in your country? Moreover, the changes experienced in the daily lives of the people of Japan after World War II cannot be described in words. Take a good look at the meme on the right! You can achieve such a change in daily life with social engineering. The same applies to Germany. In the book "Öyle Bir Geçer Ki Zaman" by our esteemed professor Teoman Duralı, he talks about how well-mannered and devoted the Germans are to their religion, how they are fond of their religion and race, and how they have their own country-specific rules of communication. However, this situation ends with the German occupation of Russia. Now, out of fear of Russia, the Germans have embraced NATO and America.

Here, the US introduced its own policies together with other sovereign countries that it had attracted. Factors such as the fact that the sea routes started to come under its control after the war, that only the Soviets were seen as a real threat, and that there were rich oil, natural gas, gold and other valuable minerals inevitably pushed it to the head of the leading sovereign countries. The US had no problem assuming this duty and with the lobbying activities of the very rich families in the country and the wealth they had gained through important companies, they wanted solutions to the problems such as inflation and excessive increase in foreign debts, which are the biggest enemies of money flow in the capitalist system. The Bretton Woods agreement was actually going quite well at first, but its collapse was inevitable. I believe that this was done in a planned manner. A statement by an economist named Jacques Rueff in 1965 summarizes the absurdity that would emerge if this agreement were to be broken;

If I had an agreement with my tailor and the money I paid him came back to me the same day, I would have no objection to buying more suits from him. (Jacques Rueff, 1965)

This discourse almost explains the current US money printing mechanism and excessive debt. At first, the underlying reason for the agreement was not this, but to create a global reserve currency. In response, an international conference was held in 1944 to make the US Dollar a reserve currency. It was an international economic regulation agreement signed as a result of the United Nations Monetary and Financial Conference held in Bretton Woods. The agreement not only aimed to determine a global reserve currency, but also to pave the way for capitalism by eliminating the depression that occurred after World War II. The main objectives of the agreement are as follows.

1. Fixed Exchange Rates : The agreement stipulated that countries would peg their currencies to the US dollar at a fixed exchange rate, and that the US dollar would be pegged to gold. Thus, countries' currencies would be indexed to the dollar, and the dollar would be indexed to the price of gold, which was pegged at $35 per ounce.

2. International Organizations : The International Monetary Fund (IMF) and the World Bank (formally known as the International Bank for Reconstruction and Development) were established under the Bretton Woods Agreement. These organizations operate to support global financial stability, promote economic development, and find solutions to countries' balance of payments problems.

The money flow order that America wants to provide with this agreement in the capitalist system is shown in the diagram on the side. When you look at this diagram, pay attention to the fact that America has chosen two countries for itself before Canada and some European countries. Both countries are countries that were subjected to social engineering by America after World War II. A problem does not easily arise until the "Other Industrialized Countries" class in the rest of the list. In the countries after that, US dominance gradually increases to the level that it can even affect domestic politics. This influence is definitely carried out with the World Bank and the IMF.

Those who read this book that I left on the left side will understand very clearly what I mean. Thanks to the economic agents sent by the USA to several countries in South America, they follow a logic of "the borrower takes the order" for domestic policies and increasing foreign debts. The countries' foreign debts and credits are increased by giving loans and sometimes grants to their governments through the IMF and the World Bank. The book especially mentions the former president of Ecuador, Jaime Roldós, and the leader of Panama, Omar Torrijos. These leaders fought tirelessly to prevent the control of the country's wealth by foreign countries. Jaime Roldós was killed in a plane crash during one of his trips. The black box was never found. I would like to state how the leader of Panama died. Do you have a guess? Yes, if you think of a plane crash, you guessed right. In my opinion, both presidents were killed in a plane crash in 1981. Unfortunately, Turkey fell into this pit during the Menderes period. With Marshall Aid and the Truman Doctrine, the idea of ​​reconstruction was instilled in Turkey with aids for milk powder, agricultural mechanization, and infrastructure projects. These aids covered a certain period and amount. When the aids ran out, Turkey, which was not an oil country, began to purchase oil and electricity from foreign countries to cover its energy deficit. Repairs and spare parts for broken machines were also a problem in themselves. Moreover, when we consider that the roads built were also a financial burden and that we did not even have the raw materials in our country, it is not difficult to guess what kind of financial burden would arise when the aids were finished. If we look at what Turkey's next foreign debt was, we can support what we say. With the oil crisis that emerged in the 1970s, just before the so-called Nixon Shock, Turkey's foreign trade balances were disrupted, and Turkey had to take out loans from the IMF and other international financial institutions to manage rising oil prices, current deficits, and economic crises. Have you seen how much debt we have incurred? This does not mean that we should not industrialize or build roads. Turkey already had this potential in its geographical location to be able to do these things with a planned, programmed and national policy. Now that we have looked at the political, economic and social interventions of the USA on other countries, we can talk a little bit about how the dollar was printed without limits. As stated in the agreement, the dollar was fixed to gold and accepted as a reserve currency. This situation ended with the suspension by President Nixon and the period of currency fluctuations began.

The Nixon Shock

The Bretton Woods system ended in 1971 when the United States abandoned the gold standard and allowed the dollar to float freely. This decision was made by President Richard Nixon in a policy change known as the "Nixon Shock". The end of Bretton Woods led to the emergence of the current floating exchange rate system. Nixon's move was part of an effort by the United States to deal with large trade deficits and rising inflation.

1. The Increasing Economic Burden of the US and the Excessive Demand for the Dollar

   1. Insufficient US Gold Reserves: The Bretton Woods system required the value of the US dollar to be fixed in gold (1 ounce of gold = $35). However, by the end of the 1960s, US gold reserves had fallen to levels that were insufficient to cover the amount of dollars in circulation. This was because the US was trying to stimulate economic growth by printing large amounts of dollars.

   2. Excessive Demand for Dollars: Increasing economic activity worldwide and international trade in dollars have increased demand for dollars. However, the US has become unable to provide the equivalent of all these dollars with its gold reserves.

2. The US's Rising Trade Deficit and Budget Deficits

   1. Vietnam War and Massive Social Spending: During the 1960s, the United States spent heavily on the Vietnam War and domestic social reforms (such as the Great Society Project). These spending increased the U.S. budget deficit and trade deficit.

   2. Dollar's Value Falls: Rising spending and deficits have eroded the dollar's credibility, and investors around the world have sought to convert their dollars into gold.

3. International Crisis of Confidence

   1. The Problem of Convertibility into Gold: When other countries wanted to get their dollars in gold, the US began to have difficulty in meeting these demands. France, in particular, wanted to convert its dollars into gold because it did not trust the gold reserves in the US. This situation created an international crisis of confidence.

   2. Speculative Attacks: The weakening of the dollar and the fear of losing its gold equivalent led to speculative attacks. Investors began to race to convert dollars into gold.

4. The Weakening of US Economic Hegemony

   1. Increased Competition: After World War II, the economies of Europe and Japan recovered rapidly and became more competitive. This weakened the economic hegemony of the United States and reduced the sustainability of the Bretton Woods system.

   2. Questioning the Dollar's International Role: Countries in Europe and Asia began to grow increasingly uncomfortable with the dominance of the U.S. dollar in international trade and questioned their commitment to that system.

5. The Need for a Transition to Flexible Exchange Rates

   1. The Bretton Woods system envisaged fixed exchange rates, but these rates did not provide flexibility to the changing needs of national economies. By the late 1960s, the world economy had become more complex, and countries wanted to adjust their exchange rates more flexibly.

6. The Nixon Shock (1971)

   1. Nixon's Decision: On August 15, 1971, US President Richard Nixon unilaterally suspended the convertibility of the dollar into gold. With this decision, the dollar-gold standard, the cornerstone of the Bretton Woods system, ended.

   2. Political and Economic Strategy: Nixon made this decision to revitalize the US economy and increase its competitiveness. This was an attempt to reshape US economic policies with the aim of reducing inflation and increasing exports.

So what happened after all this? America, which has become a country that can print money without backing it up, now has a huge debt in addition to a growing economy. This debt has now reached such a level that a website is constantly updating prices. https://www.usdebtclock.org/index.html

Crises, Wars and a Bubble Ready to Burst

BBD now prefers to print more money instead of returning to a gold-based system in response to further increases in debt. This debt has thus entered a paradox. The best solution to this is for other countries to work in cooperation and carry out money transfers and trades made in dollars in both countries' own currencies as much as possible. Although this is a paradox, it is actually a bubble. This bubble has burst several times before. America had already suspended this agreement with the oil crisis. The economic crisis that followed, which started with the blockage in mortgages in 2008, caused major banks to go bankrupt and turn into a global problem. The crisis that followed was the Covid-19 crisis that engulfed the entire world in 2019. This triggered indicators such as inflation and interest rates, causing blockages and recessions. Other than these, the ones that America is deliberately taking are moves to release the air from the bubble with events that will have major effects on the domestic market. America, which caused chaos in its domestic market with the September 11 attacks in 2001, once again deflated the bubble with the decisions it made after the incident and the operations it launched against the countries in the Middle East. If we go back a little further, they massacred people with the war they started in Vietnam. Everyone knows that war has a huge economic burden. The capital accumulated in the stock market with the war can be transferred to someone else in a planned manner. Especially the portfolios of small investors are officially seized. They created a tense atmosphere in the domestic markets with the congressional raids they made in 2021. The US Central Bank creates a currency pressure on the countries with the interest rate decisions they make and uses this very well as a weapon. The USA has transformed the institution that has the authority to print money in such a situation into an independent structure that can include private sector elements. This situation is the best illusion behind unlimited dollar printing.

As a result, countries have been resorting to unpleasant practices such as currency fluctuations, embargoes, meddling in domestic politics, financing projects that appear to support the welfare of the people with various affiliated institutions, for years due to America's impositions using its sovereignty. This bubble will certainly burst one day and until that day, the USA will continue to play the role of the world's regulator. I predict that this will not last long because; China is at the top of the list this year in the innovative companies ranking and stands out with more companies than the USA. These may be the first footprints for Jewish wealth to shift towards that region. China continues to revise its army accordingly. In fact, it seems very difficult for a war to engulf the whole world when the USA's role ends. Until then, all Turkey needs to do is to dismantle the corrupt bureaucratic structure within with more innovation and to enter this period consciously by educating its people in this direction. You are also individually a part of this war. We should stop being the grass before the elephants stamp. Stay healthy.