With the big debate going on about the US budget deficit, and the Congress’s failure to come up with a long term deal, the implications are on a global scale. As this article points out, the world is now dependent on the US dollar for most of their international transactions. And, should the dollar collapse, it could send the world into what has been termed a new Dark Age.
The global economy is so interdependent and intertwined with the dollar at it’s base that world production could come to a halt.
“It was at Bretton Woods in 1944 when Britain’s John Maynard Keynes and the United States’s Harry Dexter White conjured up the financial architecture for the global economy that served the world rather well from the end of World War II through the early 1980s.”
The Washington Post is a newpaper of the elite, the insiders. So, what’s more important is what they’re not saying. And, although they mention Bretton Woods in the article, they don’t say that that’s the alternative to the current budget crisis. The Bretton Woods system implemented by Franklin Roosevelt, with the fixed exchange rates and the Glass Steagle Act to separate commercial banking from speculative banking, created stability on the world markets for decades until it was taken down starting with Nixon removing the dollar from the Gold Reserve system. And returning to a Bretton Woods international agreement is the first step in saving the world economy from meltdown. That’s the real political issue of the economic crisis that will determine the elections.