• The Bretton Woods Agreement of 1944 established a new monetary world order.
• It allowed for the legitimacy of gold and the stealth taxation of fiat money.
• This incentivized global economies to rely more heavily on fiat money, creating a variety of negative effects.
The Bretton Woods Agreement
The Bretton Woods Agreement of 1944 was a pivotal event in the creation of our current economic system. Representatives from all over the world met in a small New Hampshire town to address issues stemming from World War I, specifically regarding reparation payments and loopholes around the gold standard. As central bank fiat money had become popular, returning to pre-WWI gold standards was difficult, so they created an alternate system that allowed for both gold legitimacy and currency control through indirect redemption.
Global Fiat Incentives
Fiat money has led to incentives at the individual, corporate, and national levels that have had detrimental effects on society. Nowhere is this more evident than on a global scale where people are more isolated than ever before and authoritarian governments are commonplace due to financial incentives driven by fiat money.
The reliance on fiat money has caused numerous adverse effects in global economies, including: increased inequality; decreased job satisfaction; weakened labor rights; fewer opportunities for growth in developing countries; increased manipulation by centralized authorities; and decreased economic stability due to currency fluctuations.
Lack Of Alternatives
As alternatives such as Bitcoin have gained traction, many believe that they will be able to provide better financial incentives at all levels -individuals, companies and nations alike- which could potentially lead to positive changes globally if adopted widely enough.
Fiat money has led to terrible incentives at all levels throughout the world – individuals, companies, nations – leading us towards an increasingly uncertain future with authoritarian governments becoming more powerful every day . While alternatives such as Bitcoin offer hope for better financial incentives , it remains unclear how much potential these technologies possess or when exactly their impact will be felt .