The United States' global status of dollar hegemony today is related to two major events in the history of the international monetary system:

1, the establishment of the Bretton Woods monetary system centered on the US dollar.

1In July 1944, the international monetary and financial conference between the United Nations and its allies was held in Bretton Woods, New Hampshire, USA, and the final resolution of the joint national monetary and financial conference based on the White Plan and its two annexes, the International Monetary Fund Agreement and the International Bank for Reconstruction and Development Agreement, was adopted, which was collectively called the Bretton Woods Agreement.

1945 After the end of World War II, according to the spirit of the Bretton Woods Agreement, western countries led by the United States successively established the General Agreement on Tariffs and Trade (the predecessor of WTO), the World Bank and the International Monetary Fund, and made them the three pillars supporting the current world economic, trade and financial structure. People used to call it Bretton Woods monetary system.

2. The currency of the Bretton Woods system collapsed, and the dollar stole the life of gold from the collapse of the Bretton Woods system.

In July, 197 1, the seventh dollar crisis came. Although the United States tried to solve the crisis with the dual-track gold price system, in August, it was widely reported in the financial market that France and other western European countries would exchange a large amount of US dollars for the gold stored by the US government, which made the United States feel more deeply that it was necessary to find a more suitable way out for the US dollar as soon as possible to avoid a similar crisis that seriously threatened the life of the US dollar and the financial security of the United States.

So, what is the American method? The answer is simple: this means the end of the Bretton Woods system, which was founded 26 years ago and made great contributions to the global economic hegemony of the United States. It relies on the unique global economic aggregate to monopolize the status of international trade settlement currency, assassinate gold, steal its life, and establish global economic hegemony based on dollars (not gold).

Then, we saw a wonderful scene in modern economic history: President Nixon took tough measures in August 197 1+05. First of all, he announced that from now on, the United States will no longer automatically sell gold to foreign central banks to recycle dollars (the US government says that if it is not linked, it will not be linked, and no country has the ability to oppose this shameless trick that only benefits the United States), thus ending the continuous outflow of American gold. This measure actually cut off the only remaining link between the dollar and gold. Secondly, he announced that an additional tax of 10% would be imposed on all goods imported from the United States until the trading partners of the United States agreed to appreciate their currencies against the US dollar. The Bretton Woods system officially disintegrated!

The plot of the United States to establish global economic hegemony based on the dollar (not gold) was successful today. Since the collapse of the Bretton Woods system, the United States began to print dollars crazily (buying all the resources in the world are a piece of paper printed by the American printing machine), and sending dollars to any place in the world with American military+economic strength+scientific and technological strength to ensure that it contains "value". The dollar has become a self-replicating monster currency and the main currency of foreign exchange reserves in various countries.

The currency ratio is determined by many comprehensive factors, such as the country's economic situation and the total amount of money issued. The main body is the free floating exchange rate, which reflects the currency exchange rate completely determined by market supply and demand factors.

But not all countries adopt free floating exchange rates.

There is also a managed floating exchange rate system (dirty floating) or crawling peg, officially controlled.

crawling peg

It is an exchange rate system that allows the currency to appreciate or depreciate gradually according to inflation. Under this system, the exchange rate is usually fixed, but according to the degree of inflation, it can be slightly adjusted every once in a while if necessary.

Dirty floating/managed floating exchange rate system.

Refers to the exchange rate system in which the official exchange rate target is not open. The central bank or monetary authorities intervene in the foreign exchange market to keep the exchange rate at its undisclosed target level, which may change with the change of environment.

Japan, China, Singapore and other countries adopt non-free floating exchange rate system.

The currencies of the United States and the European Union cannot float completely freely.