A new Bretton Woods to save the dollar against Covid? Bitcoin rubs its hands

Who will save the global economy?

The global economy has still not recovered from the 2008 crisis. It has been faltering ever since, and it is only now standing upright with a great deal of „monetary easing“ (i.e., money supply). The new crisis due to the coronavirus is in danger of driving the nail in, and the question of a major Bretton Woods style monetary reset arises.

A pivotal moment for the world economy

The Bretton Woods Agreement was concluded in July 1944, when the world and its economy had just followed the First and Second World Wars in a few decades, with the Great Depression of the 1930s in between.

The old gold standard was then backed by the U.S. dollar, which then began to become the world’s reference currency. The fixed parity was 35 dollars for an ounce of gold (31.1 g). These agreements also saw the creation of the International Monetary Fund (IMF).

IMF-report

It was IMF Managing Director Kristalina Georgieva who called on world leaders to come together around a table to discuss a major new economic agreement:

„How can we seize this Bretton Woods-like situation to move forward to a better world after the pandemic? (…) we are faced with two major tasks: fighting the crisis today and building a better future. »

A real question, but a bad solution in perspective?

Unfortunately, the IMF Managing Director does not even envisage the end of fiduciary currencies based solely on trust in their issuing states. No return to a healthy currency therefore, as in the old gold standard, where the precious metal was not printable at will, just like Bitcoin (BTC) today, with its fixed quantity of units – 21 million and not one more.

For Kristalina Georgieva, it’s all about more and more economic stimulus and investments in various areas. One just wonders where all this magic money comes from.

Of course, if high inflation is eventually triggered because of all these monetary impressions, it will have a significant impact on assets perceived as safe havens.

No matter what decisions or agreements are made, it seems less and less likely that the world economy, which is completely broken, will be able to keep going for a very long time like this. The IMF’s solution to the headlong rush is merely a time saver in the face of an economic paradigm shift that has become inevitable.