Forex Trading Systems And Forex Brotherhood

To understand politics, most of the time you just have to follow the money. While central banks manage economies through interest rates, politicians use a variety of methods to influence trade and move markets.

You don't need to be an Einstein to understand that everything is relative. Whether we are talking about being early vs. being late, or being cheap vs. being expensive, you need a point of reference to make meaningful qualitative or quantitative distinctions. The same is true for money.

FIXED AND FLOATING CURRENCIES

Without turning this into a history lesson, here's a little background. After the end of World War 11 and with their economies in ruin, the 44 Allied countries met in Bretton Woods, N. H. in July 1944 and fixed the value of the U.S. dollar relative to gold at the rate of $35 per ounce. The value of the non-U.S. currencies were then individually fixed to the value of the dollar, et voila, the gold standard was bom. Each of the countries knew where they stood relative to the U.S. dollar, and where the dollar stood relative to an ounce of gold. Individual currencies were allowed to vary within a narrow band and if they floated out of that range, central banks adjusted monetary policy to bring them back in line.

That worked great for a while, but the United States had limited gold reserves and certainly not enough to cover all of the currency in circulation, a situation akin to check kiting, and the lack of gold and dollars put a damper on global economic activity.

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