The New Bretton Woods Agreement

Bretton Woods was where the financial system as the world knew it changed overnight. The devastation of the Second World War meant that something needed to be done. And so the US became the world’s reserve currency. Now, in the midst of the global pandemic, some institutions are saying another Bretton Woods is on the horizon. That is, another major financial shift is due to happen. 

I’ve said before, the economic systems of the world change about every 30-40 years. Often out of hardship, where a major devastation causes global leaders to rethink the way things operate. The last major change to our financial systems were in the 70s, so change is overdue. 

A History of Financial Shifts

In the past century, you’ll see the evidence that financial systems change every 30-40 years or so. Often because of major world events. Around the First World War, central banks were being set up across the globe. The Federal Reserve Act was signed in 1913, which created the Central Bank of the United States—the Federal Reserve. These coincided because, well, fighting wars is expensive. In the eyes of our nation, there had to be a better way to fund the war and survive as a nation. 

About 30 years later, a new money system was created in Bretton Woods, New Hampshire. Power brokers around the world met and created a new standard, where the US dollar became the reserve currency of the world. After all, the US emerged late into the war, and was not decimated in the same way that Europe was. This gave the US a lot of negotiating power, and this helped them solidify their “World Superpower” status. Yet there were still gold reserves at this time. 

In the following 30 or so years, social programs were created, and more wars were fought, and something was bound to change. So, it did. In 1971, Richard Nixon closed the gold window, which meant the US dollar could no longer be converted into gold. Currencies around the world became fiat currencies, or currencies not backed by anything.

Due for a Change

This brings us to where we are today, where every single central bank and country spends money like drunken sailors. There is no end in sight to the spending. In fact, the pandemic has kicked money-printing into overdrive, and it does not seem like it’s slowing. There’s a path of destruction set for every fiat currency. So, what’s the endgame?

A new money system. That is the topic of conversation in finance right now: The Great Reset. Organizations the world over have brought up the idea of resetting and starting over with a new money system. Christine Lagarde, of the International Money Fund, has been talking in detail about this new system. 

So, what’s in store for us? This money system appears to be digital, with central banks around the world developing their own digital currencies. The Chinese Central Bank has already been testing a pilot program. The US already has laws in place regarding a digital US dollar. The European Union just released a document for the digital Euro. 

Be Prepared for the New Bretton Woods

This is the new Bretton Woods moment. What will be the reserve currency for a digital system? At this point, it’s all speculation. What we know for sure is that something is coming, and people are calling for a new Bretton Woods agreement. While the digital reserve currency is still just a concept, it’s worth staying informed.

Here’s my recommendation. Look into what’s happening. Do your own thorough research, and critically evaluate the time at hand. This is going to be a monumental shift in the world, with a new money system on the horizon. If you can anticipate the changes, you can position yourself on the right side of this shift—and it’ll be a game-changer. 

You can listen to my new podcast, Cashflow Investing Secrets here.

Live your Freedom, Live Your Legacy, On Your Own Terms,

M.C.

M.C. Laubscher is a husband, dad, podcaster & Cashflow Specialist. He helps business owners and investors create, recover, warehouse & multiply cashflow. You can learn more about exclusive cash flow strategies in M.C.’s new video series at https://www.yourownbankingsystem.com/