During the gold standard, the value of currencies was fixed. Nations agreed to limit the amount of currency they would issue, to the amount of gold they held in reserve so they could back up their currency. The significance of this is that a nation could not print money, or spend more than what they had. In addition, it meant that the exchange rates could not adjust to differences in trade …show more content…
But, after WWI, nations began printing money, lowering the value of money. Later in 1929 came the great depression, which lowered many assets across the globe, and was a big setback to the gold standard. Then, during WWII, countries began spending on military hardware again, without having enough money to spend on military goods. They began to print money and lowered the value of their currencies even more, which lead to the creation of the Bretton Woods