Some friends may want to know that the US dollar is the currency issued by the US government, and the US government can issue US dollars by printing money.

Why, then, does the United States government print a piece of paper and fold it, and it becomes the world currency accepted by all countries in the world?

Today, in this article, I will share with you how the dollar became the world currency in easy-to-understand language.

1944 In July, in order to take over the monetary hegemony from the British Empire, the United States was promoted by President Roosevelt to establish three world systems. One is the political system-the United Nations; One is the trade system-GATT, which was later the WTO; ; One is the monetary and financial system, which is the Bretton Woods system.

According to the wishes of Americans, the Bretton Woods system is to establish the hegemonic position of the US dollar. But in fact, after more than 20 years of practice, from 1944 to 197 1 year, for 27 years, it did not really give Americans hegemony. What stopped the hegemony of the dollar? It is gold.

At the beginning of the establishment of the Bretton Woods system, in order to establish the hegemonic position of the dollar, Americans made a commitment to the whole world, that is, to lock the currencies of various countries in the dollar, while the dollar locked in gold. How to lock it? 1 ounce of gold at $35. With this promise of the dollar to the whole world, Americans can't do whatever they want. Simply put, 35 dollars for 1 ounce of gold means that Americans can't print dollars indiscriminately. If you print an extra $35, you must keep 1 ounce of gold in the vault.

The reason why the United States was confident to make such a commitment to the world was because it held about 80% of the world's gold reserves at that time. Americans think that I have so much gold in my hand that it is no problem to support the credit of the dollar. But the situation is not as simple as Americans think. After World War II, the United States was involved in the Korean War and the Vietnam War. These two wars caused heavy losses to the United States, especially the Vietnam War. During the Vietnam War, the United States destroyed nearly $800 billion in military expenditure. With the increasing cost of war, the United States is a little impatient. Because according to America's promise, every loss of $35 means a loss of 1 ounce of gold.

By August, 197 1, Americans still have more than 8,800 tons of gold. At this time, Americans know that they are in trouble, and at the same time, some people are still creating new troubles for Americans. For example, French President Charles de Gaulle, who doesn't believe in dollars, asked the French finance minister and the governor of the central bank to see how many dollars France had, and the answer was about $2.2-2.3 billion. De Gaulle said that no money was left to the Americans, and it was replaced by gold. The French attack on Americans has had a demonstration effect on other countries. Other countries with foreign exchange surpluses told Americans that we don't want dollars, we want gold. This has forced Americans to go nowhere.

Thus, on August 197 1 day, then US President Nixon announced the closing of the golden window, and the dollar was decoupled from gold. This is the collapse of the Bretton Woods system.