Unit 8 Lecture

The foundation of the contemporary economic framework lies in the concept of monetary nationalism, wherein each country possesses its own central bank responsible for issuing a national currency. These currencies tend to be subject to inflationary pressures. Dr. Saifedean argues that developing countries, characterized by their lack of adoption of modern industrial technology, often experience a shift from a stable monetary system to an inflationary one. This transition further complicates the already challenging task of achieving development. Topics covered include: Monetary nationalism Bretton Woods Agreement World War 2 Inflation Treaty of Geneoa The primary objective of the Bretton Woods agreement was to replicate, through centralized planning, the outcomes that the international gold standard of the 19th century had organically achieved. However, by 1971, the agreement was terminated, resulting in a transition from a dollar standard backed by gold to a dollar standard with no backing. This shift was reflected in a notable increase in the price of one ounce of gold in terms of US dollars since the establishment of the Bretton Woods agreement in 1944. The purpose of this unit is to educate students about the historical evolution leading to the implementation of a fiat standard. It highlights that the transformation of the economic structure was not solely the result of a single decision but rather a gradual process that necessitated extensive central planning and lobbying efforts to accomplish.