During the Bretton Woods System, how did the world "buy" US dollars for their reserves?
During the time of the Bretton Woods system, foreign countries held US dollars as a gold substitute due to the dollars convertibility in gold. My question is what did these countries use to acquire these dollar reserves as it was my understanding that the US controlled over 2/3s of the world's gold supply after WW2. If that is so, then were they basically "buying" us dollars with their own currencies in order to stabilize their own currency? I'm almost there in my understanding, but am still missing a piece to the puzzle. Thanks for the help.
- Anonymous10 years agoFavorite Answer
they were selling goods to US, and getting dollars in payment.