Guggenheim: Return to Breton Woods

I worked directly for the CIO of Guggenheim Asset Management in my previous job, and this guy definitely knows his stuff. He's a big fan of history so he always makes sure to put things into context as opposed to just beating you senseless with stats.

The gold-convertible U.S. dollar became the global reserve currency under the Bretton Woods monetary system that lasted from 1944-1971. This arrangement ended because foreign central banks accumulated excessive reserves of U.S. Treasuries, threatening price stability and the purchasing power of the dollar. Today, central banks are once again stockpiling massive Treasury reserves in an attempt to manage their currency values and gain advantages in export markets. We have, effectively, returned to Bretton Woods. The trouble is that the arrangement is as unsustainable today as it was during the middle of the last century.

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