In the context of the U.S. gaining powerful economic power, the fact that no bombs fell on U.S. soil during both world wars, with the exception of Pearl Harbor in 1941, is telling.
Much of Europe lay in ruins twice during the twentieth century, while the U.S. economy was not only unscathed but strengthened by intensive military supplies.
After the United States entered the war, manufacturing capacity increased by a third and agricultural production by 32%. In 1945, the United States’ share of world production rose to 60%, its share of world exports to 40%.
At the end of the war, the United States remained the only developed country in the world whose economy felt the positive effect. America offered Western European countries the “Marshall Plan” – economic aid in the form of loans, investments and free delivery of goods.
It was after the Second World War that the USA became the greatest economic state in the world.
Founded in 1944, the Bretton Woods system consolidated the status of the U.S. dollar as the world’s reserve currency. Under the terms of this system, the countries of Western Europe, as well as Canada, Japan and Australia, undertook to peg the exchange rates of their currencies to the U.S. dollar. The United States pledged to exchange U.S. dollars for gold at a rate of $35 per ounce.
The system was designed to regularize exchange rates, which was necessary to rebuild post-war economies.
The International Monetary Fund and the International Bank for Reconstruction and Development, now part of the World Bank Group, were established to support the system.
The World Bank is headquartered in Washington, D.C. The U.S. has the largest share of voting power in management, followed by U.S. allies Japan, Germany, France, and the United Kingdom. The IMF is also headquartered in the American capital.
On August 15, 1971, President Richard Nixon issued an executive order to de-peg the U.S. dollar to gold. Since then, the dollar and other leading currencies have moved from a fixed exchange rate regime to a floating, i.e. market-based determination of currency value. In 1976, the new reality was adopted as the Jamaican Monetary System, which exists to this day.
“Because of direct dollarization, official pegging, or de facto currency pegging, the dollar serves as the currency or currency substitute of more countries than any other currency. Because the States is home to the largest financial center in the world (New York) and its closest allies have the next two most important (London and Tokyo), this country can functionally set the rules of the global economy,” writes historian Bret Devereux on his blog.
The replenishment of the World Trade Organization (Ukraine acquired full membership in the WTO on May 16, 2008. – Ed.) depends on the position of the United States.
In addition, the United States initiates economic sanctions against states that threaten US national security or violate international principles of democracy.