In the years leading to the collapse of the Bretton Woods system

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In the years leading to the collapse of the Bretton Woods system, it became clear that the dollar was overvalued. The United States had been running persistent balance of payments deficits and significantly increasing the money supply to finance their spending on military and social programs. As a result, foreign governments began to lose confidence in the dollar and sought to convert their dollar reserves into gold, which ultimately led to the breakdown of the system.

In the Years Leading to the Collapse of the Bretton