Trading manual part 1 Forex History

This is the first part of a series of articles we are going to publish about crypto and forex trading. With this we will help all our followers get a deeper knowledge about the functionalities and of the crypto and forex trading. We will be releasing a part by part a complete guide of trading for everyone to follow. This way newcomers an veterans of the trading world will be able to comprehend the the secret of the trading world. Hope you all enjoy this manual and don´t hesitate in leaving your opinions as well as questions on the bottom of the page.

Trading manual part 1: Forex History

it is important to learn some of the historical events who relate to currencies and the exchange of them. We will go through the international monetary system and how it became what it is these days. So, it basically started with the Gold Standard System. The creation of the gold standard monetary system in 1875 is one of the most important events in the history of the Foreign exchange market. Before the gold standard system was created, countries were commonly using gold and silver as a method of international payments. The main issue around this was the fact that the price of these materials depends on supply and demand. For example, when a new gold mine was discovered the prices usually went down. The basic idea behind the gold standard was that governments guaranteed the conversion of currency into a specific amount of gold. ln other words, a currency had back-up from gold. Obviously, governments needed a fairly substantial gold reserve in order to meet the demand for currency exchanges.

the forex history part 1

The late 19″ century

During the late 19″‘ century, all major economic countries had pegged an amount of currency to an ounce of gold. Over time, the difference in price of an ounce of gold between two currencies became the exchange rate for those two currencies. This represented the first official means of currency exchange in history. The gold standard eventually broke down during the beginning of World War 1. Due to the political tension with Germany, the major European powers felt a need to complete large military projects, so they began printing more money to help pay for these projects. The financial burden of these projects was so substantial that there was not enough gold at the time to exchange for all the currency that the governments were printing off.

Before the end of World War 2, the allied nations felt the need to set up a monetary system in order to fill the void that was left when the gold standard system was abandoned. In July 1944, more than 700 representatives from the Allies met in Bretton Woods, New Hampshire, to deliberate over what could be called the Bretton Woods System.

 

Stay tuned for the release of  part 2 very soon!

Don´t fall for the pirates! check out our broker scam list:
Choose the best broker! check out our top 5 broker reviews: Best Brokers to invest

Comments are closed.