To someone who r not so familiar with the
Bretton Woods System, I now can tell u that this system is the most unreasonably mighty economy one that controls the world economic backbone.
Bretton Woods System is one system that links US dollars n gold; the us dollars exchange rate to other currencies all around the world together. The equation is like this: 1 ounce gold equals 35 US dollars; every country's exchange rate to the US dollars r the international rules n standardization.
After the
subprime mortgage crisis has happened in the united states, the US government pulled all of their strength to establish a rescue plan that 700 billion us dollars will be used in rescuing the investment companies, real estate, commercial banks, insurance industries. But recently, the GM enterprise has applied the alms about 5 billion dollars from the government just because their relationships r kinda "intimate" enough to get the subsidy n this is totally outta the rescuing range
cuz mobile vehicle industry ain't on the list of conducting rescuing project. So here is a bad start, if GM could get exactly what he needs from the government
cuz of the "relationship" stuff, why couldn't other industries close to the US government enough get the subsidy? So there will be a crucial point out there that is 700 billion us dollars definitely can't meet the domestic demand. According 2 the authority's conservative estimate, it is NOT hard to break through 2000 billion us dollars to save the enterprises in the united states. How they get the extra 1200 billion dollars could be the question we'd like 2 ask.
Of course, they r gonna grab this "
Bretton Woods System" opportunity and make full use of it by issuing more national debt and the strongest, worst one: changing the
exchange rate. The domestic financial crisis will be transferred to other countries of the world n the USA will benefit A LOT after they've changed the exchange rate to other currencies like Euro,
RMB, Yen etc. because of following 4 reasons:
1, After the US dollars exchange rate has been increased, more countries will buy more American national debt n that will help the united states change the domestic dollars' fluidity n make it move a
lil bit faster.
2, To avoid the panic selling of the US national debt
cuz the exchange rate has been increased, they've got more valuable money in hand. Why do they wanna sell? On the other hand, it is absolutely good for USA.
3, After the American domestic crisis past gradually, the crisis will get stronger in other countries like China, Japan, Korea etc. The assets in these countries will be much cheaper than they were b4. Because USA has increased its exchange rate n make us dollars stronger in the world economy, with time passing by, the domestic economy will restore itself. So when that kinda phenomenon's happened, USA could purchase the cheap properties in other crisis-striking countries all around the world.
4, As we all know, the MOST
important international Ocean transportation index-Baltic Freight Index will be affected by the exchange rate. With the exchange rate from Euro to US dollars going down gradually, the price of the cargo will be decreased sharply. Then it's time for USA to stretch his immoral hand to this area. They'll take this "low price" advantage to purchase more n more raw
materials, cargo, commodities etc.
Well, after writing so many words down, I feel like the most important thing us countries could do is establish a new global economic system to change the contemporary situation. US dollars can't be the BOSS no more. Let's just hope that day will finally come.
PS: 100% original by Me--- lil-V
