History
As emphasised by the economist Avinash Persaud, reserve currencies come and go. "International currencies in the past have included the Chinese Liang and Greek drachma, coined in the fifth century B.C., the silver punch-marked coins of fourth century India, the Roman denari, the Byzantine solidus and Islamic dinar of the middle-ages, the Venetian ducato of the Renaissance, the seventeenth century Dutch guilder and of course, more recently, sterling and the dollar.”
Before 1944, the world reference currency was the Pound Sterling. After World War II, the international financial system was governed by a formal agreement, the Bretton Woods System. Under this system the United States dollar was placed deliberately as the anchor of the system, with the US government guaranteeing other central banks that they could sell their US dollar reserves at a fixed rate for gold. European countries and Japan deliberately devalued their currencies against the dollar in order to boost exports and development.
In the late 1960s and early 1970s the system suffered setbacks due to problems pointed out by the Triffin dilemma, a general problem with any fiat currency under a fixed exchange regime, as the dollar was in the Bretton Woods system.
Read more about this topic: Reserve Currency
Famous quotes containing the word history:
“A man acquainted with history may, in some respect, be said to have lived from the beginning of the world, and to have been making continual additions to his stock of knowledge in every century.”
—David Hume (1711–1776)
“We are told that men protect us; that they are generous, even chivalric in their protection. Gentlemen, if your protectors were women, and they took all your property and your children, and paid you half as much for your work, though as well or better done than your own, would you think much of the chivalry which permitted you to sit in street-cars and picked up your pocket- handkerchief?”
—Mary B. Clay, U.S. suffragist. As quoted in History of Woman Suffrage, vol. 4, ch. 3, by Susan B. Anthony and Ida Husted Harper (1902)
“The myth of independence from the mother is abandoned in mid- life as women learn new routes around the mother—both the mother without and the mother within. A mid-life daughter may reengage with a mother or put new controls on care and set limits to love. But whatever she does, her child’s history is never finished.”
—Terri Apter (20th century)