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Because White prevailed in that argument, and the IMF became a dollar-based institution, the Bretton Woods system contained a fatal flaw. For international reserves to keep pace with the growth in world trade required an ever-expanding supply of dollars, which as the economist Robert Triffin observed in the late 1950s was incompatible with the preservation of a stable value for the dollar.

Even in the eyes of US financial and economic elites at that time, with the Depression still a clear and vivid personal and professional memory, a stable dollar came a distant second to the opportunity for more rapid enrichment for them and their class.  What did dollar stability matter if stability itself would be defined in terms of the dollar?  Clearly, it was other peoples' problem.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Sep 23rd, 2009 at 11:38:12 AM EST
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