- Smithsonian Agreement
The Smithsonian Agreement was a December 1971 agreement that ended the
fixed exchange rates established at the Bretton Woods Conferenceof 1944.
Bretton Woods Conferenceof 1944 established an international fixed exchange rateregime in which currencies were pegged to the United States dollar, which was based on the gold standard.
By 1970, however, it was clear that the exchange rate regime was under threat, as the United States dollar was greatly overvalued because of heavy American spending on
Lyndon B. Johnson's Great Societyand the Vietnam War. The American economy was also coming under serious inflationary pressures.
In response, on
August 15, 1971, Richard Nixonhad the United States unilaterally devaluethe United States dollar, announced suspension of convertibility of dollars into gold and effectively ending the gold standard. The United States then entered negotiations with its industrialized allies to appreciatetheir currencies.
Meeting in December 1971 at the
Smithsonian Institution, the Group of Ten signed the Smithsonian Agreement. In the Agreement, the countries agreed to appreciate their currencies against the United States dollar.
Although the Smithsonian Agreement was hailed by President Nixon as a fundamental reorganization of international monetary affairs, it quickly proved to be too little and of only temporary benefit. The gold value of the dollar was realigned again in 1973, from $38.02 to $42.22. In addition, further devaluation occurred against other European currencies. The end of the system came in March 1973 when the major currencies began to
floatagainst each other. A few currencies, such as the British pound, had begun to float earlier.
Sherman Silver Purchase Act
United States Mint
History of money
* [http://www.britannica.com/eb/article-61797 Britannica]
* [http://www.anz.com/edna/dictionary.asp?action=content&content=smithsonian_agreement ANZ]
Wikimedia Foundation. 2010.
Look at other dictionaries:
Smithsonian Agreement — An agreement reached by a group of 10 countries (G10) in 1971 that effectively ended the fixed exchange rate system established under the Bretton Woods Agreement. The Smithsonian Agreement reestablished an international system of fixed exchange… … Investment dictionary
Smithsonian Agreement — A revision to the Bretton Woods ( Bretton Woods Agreement) international monetary system that was signed at the Smithsonian Institution in Washington, D.C., in December 1971. Included were a new set of par values , widened bands to +/ 2.25% of… … Financial and business terms
Smithsonian agreement — A revision to the Bretton Woods international monetary system which was signed at the Smithsonian Institution in Washington, D.C., U.S.A., in December 1971. Included were a new set of par values, widened bands to +/ 2.25% of par, and an increase… … Financial and business terms
Smithsonian Institution — Smithsonian redirects here. For other uses, see Smithsonian (disambiguation). Smithsonian Institution Rear view of The Castle , the Institution s headquarters Established August 10, 1846 … Wikipedia
Smithsonian (disambiguation) — Smithsonian can refer to:* the Smithsonian Institution, a museum in Washington, DC ** the Smithsonian Institution Building ** Smithsonian (magazine) , a magazine published by the Institution * Smithsonian (Washington Metro), a station of the… … Wikipedia
Smithsonian National Zoological Park — The front entrance to the National Zoo Date opened 1889; 121 years ago (1889) … Wikipedia
Smithsonian Networks — Smithsonian Channel Launched 2007 Owned by Smithsonian Institution Showtime Networks (CBS Corporation) Picture format 480i (SDTV) 1080i (HDTV) Country … Wikipedia
international payment and exchange — ▪ economics Introduction international exchange also called foreign exchange respectively, any payment made by one country to another and the market in which national currencies are bought and sold by those who require them for such… … Universalium
Bretton Woods system — The Bretton Woods system of monetary management established the rules for commercial and financial relations among the world s major industrial states. The Bretton Woods system was the first example of a fully negotiated monetary order intended… … Wikipedia
History by Contract — History by Contract, published in 1978, is a book written by Major William J. O Dwyer, U.S. Air Force Reserve (ret.), of Fairfield, Conn. about the aviation pioneer Gustave WhiteheadAfter spending 30 years and a small fortune on detective work, O … Wikipedia