George Graham

It’s Time for a Mulligan in the World’s Financial System

I don’t quite understand how the world’s financial system works, so my perceptions might be all awry. But this I believe: It’s time for a do-over.

The way I learned it, this bewildering maze of currencies, international debts, trade deficits and so on grew like Topsy without any central plan. A few private bankers in Europe, who started out as goldsmiths, created the financial system that dictates how you and I eke out a living in this cockeyed world today.

Have you ever wondered why a Jamaican dollar is worth little more than an American cent? Does it mean that an hour’s work by an American is a hundred times as valuable as an hour’s work by a Jamaican? Absurd, right?

Even more absurd is the fact that a Chinese yuan will buy you about 15 cents in American currency. Who’s kidding who? Who owes who truckloads of money?

Also, who knows what is happening in Greece? Why is Germany in such a good position that it can “bail out” the Greeks? Why are Portugal and Spain teetering on the edge of financial collapse?

How stable is the U.S. dollar? Why is the price of gold skyrocketing? When I was a youth, gold was fixed at $35 (US) an ounce. Today, the price is in the four-digit range – and climbing.

What did the U.S. Federal Reserve get in exchange for some 13 trillion dollars it recently “lent” a few big banks? What did the Fed accept as “collateral”? And which banks got the loot? It has taken an act of Congress to (maybe) give the public a peek inside that can of worms. And it will take bolder political action to find out what’s really up at the Fed.

Obviously, the world’s financial system is tottering. Obviously, everything being done now to prop it up is temporary. I say let’s end the charade and do something permanent. And I hear you saying, “How?”

I don’t know how, but I know it’s been done before – more than once.

You might have heard about Bretton Woods. Officially called the United Nations Monetary and Financial Conference, it was a gathering of 730 delegates from all 44 Allied nations at the Mount Washington Hotel in Bretton Woods, New Hampshire after World War II.

The conference, held in July 1944, produced agreements to set up the International Bank for Reconstruction and Development, the General Agreement on Tariffs and Trade, and the International Monetary Fund. That conference established the U.S. dollar as the basis of world finance.

At the time the U.S. held a big chunk of the world’s available gold – about $26 billion worth. And the dollar’s value was based on these reserves.

Over the years, the U.S. stockpile of gold dwindled and its commitments multiplied. The U.S. dollar was no longer worth its weight in gold. Various American administrations tried this and that to fix the problem but nothing seemed to work, and in 1973, President Nixon said to heck with the “Gold Standard.”  From then on the dollar would be worth what he (or some other big shot) said it was.

Nobody has that kind of clout any more.

So, how about another “Bretton Woods”? How about getting the world’s leaders together to find out what the bankers are doing to the lives of everyday citizens? The Chinese would have to play a leading role because they hold a huge amount of America’s debt and have cornered much of the world’s remaining raw materials. How much is the (oh-so-cheap) Chinese yuan really worth? And how much do the Chinese think a U.S. dollar is worth? Or a Jamaican dollar, for that matter?

I bet the Canadian dollar would be worth a lot. That vast country with only 30 million or so people has huge reserves of gold, copper, uranium, oil, natural gas, timber, water …. and on and on and on. Not to mention abundant waves of amber grain, lowing herds and foraging fowl from sea to shining sea.

Meanwhile, America has succeeded in exporting nearly all its manufacturing and is now a net importer of food.

Yet, the last time I checked, the Canadian dollar is worth less than the American greenback.

Left to me, I would get rid of the network of private bankers who really run the show. They’ve had their turn and they’ve made a royal mess of everything.

Yet there are those who advocate placing even more power in private hands. The Swiss-based Bank für Internationalen Zahlungsausgleich (Bank for International Settlements), for example. Some influential folks insist that a stronger role for the BIS is a necessary hedge against the “ideology” prevailing at the International Monetary Fund. They want more hard-nosed policies that would mean even more Third World suffering.

The BIS is not accountable to any national government; it is a creature of central banks and supposedly “fosters international monetary and financial cooperation.”   When the BIS was formed in 1930, the main actors were the then Governor of The Bank of England, Montague Norman, and his German colleague, Hjalmar Schacht, later Adolf Hitler’s finance minister.

How healthy does that sound?

It seems to me that the world needs to scrap the current financial system – with its existing debts and commitments and obligations, and start over from scratch. The current mess is the result of a vast scam, anyway.

About the author


I am a Jamaican-born writer who has lived and worked in Canada and the United States. I live in Lakeland, Florida with my wife, Sandra, our three cats and two dogs. I like to play golf and enjoy our garden, even though it's a lot of work. Since retiring from newspaper reporting I've written a few books. I also write a monthly column for