 Thank you everyone for attending I'm very grateful very honored to be at the supporter summit I just want to extend a thanks to my sponsors Brian and Shana it's Fenstrup and it means a lot to me that my talk is being sponsored so I hope it will live up to expectations and if if not John you can close the doors right yeah no okay so what am I talking about I'm talking about Wall Street in the the origins of Bretton Woods right we've heard a lot about the the dollar the theme of this conference is the the end of the dollar era what might that look like and if we think about what the end of the dollar era means it's I think it's very helpful to understand how we actually got to this dollar era how we actually got to the dollar as the world reserve currency what was the process behind that was this just a public interest motivated legislation or were there actually sort of some crony forces at work etc and I want to I want to talk about this because we all know about the the origins of the Federal Reserve it's sort of the the code you in order to get into the Mises Institute they say alright where was the Fed founded you got Jekyll Island you go okay who was at Jekyll Island and you have to name at least two or three people at least that's what I had to do so I don't know if any of you had to go through the same test as me I'm gonna you might remember that we've got Nelson Aldrich he was a famous senator from Rhode Island and he was the Aldrich plan and what's very fascinating is like father-like son his his son Winthrop Aldrich was actually played a big role in good setting up Brentwoods so that's interesting runs in the family just so we know what Brentwoods was Brentwoods was the system created after it really right around the end of World War two and it lasted until the early 70s and this helped establish the dollar as the World Reserve currency the dollar was redeemable internationally in gold by large banks by governments 35 dollars would buy an ounce of gold other currencies were redeemable in dollars okay so the United States currency was in a sense the reserve for all of the other currencies at least of the free capitalist world so to speak countries in Europe Japan etc and this created an enormous demand for the dollars so the dollar was redeemable in gold at least for some people everywhere else it was redeemable other currencies were redeemable in dollars you also Brentwoods created the IMF at the International Monetary Fund this is government funded and it would loan dollars to various countries for currency stabilization if they were at risk of suffering a devaluation under this under this regime they could get an infusion from the IMF right which still exists to this day and also the World Bank was created this was government and privately this is part funded by the government part funded by private funds as we'll talk about such as Wall Street and this would loan dollars abroad for infrastructure development a loan to Chile to build a road or a loan to Europe to to build to build some sort of infrastructure so these two institutions helped spread dollars around the world and this is often under the guise of foreign aid okay so that these are heavily linked to the Bretton Wood system all right and so what I want to do in my talk is I want to show how Wall Street banks so particularly the Chase National Bank which was led by Winthrop Aldrich Chase National Bank is now part of JP Morgan Chase very famous institution prominent some of you hopefully are know of in affiliated think tanks the Council on Foreign Relations right with the Council that we all know and love and not quite but that that was play a big role in Bretton Woods as we'll see and they played a big role in devising and lobbying and also shaping Bretton Woods so there's a lot of parts to this story I'm gonna go through obviously just a condensed version I hope to elaborate this on this and in future books and in future papers etc and why did Wall Street want Bretton Woods what were they gonna get out of it right was it for the good of the United States no they wanted other countries to hold the dollar as reserves right they wanted the dollar to become the world reserve currency this would increase the demand for dollars of course all of their assets and securities etc are denominated in dollars this would increase the prestige of New York City as a worldwide financial center they also wanted other countries to borrow more from Wall Street Wall Street in the 1920s had grew tremendously loaning to Europe and to South America for a variety of reasons and in the Great Depression a lot of these countries defaulted on their loans which Wall Street was not happy about okay Wall Street it's it was a risk and that's of course it's a market risk but if you can get the government to get rid of that risk that's even better and Wall Street wanted these countries to not default on their loans and so they basically wanted the United States to lend them money conditional on them repaying Wall Street back right so Wall Street stood the game from this and for that reason Wall Street played a big role in shaping the Bretton Woods system and in making the dollar a world reserve currency because in the 1920s the dollar was actually technically a world reserve currency post World War 1 Wall Street in the New York Fed with Great Britain they created a new international gold exchange standard now Dr. Solano has briefly spoken about this gold exchange standard it's a phony gold standard it's not a it's not the real gold standard it's not the real thing we all we all know and love and why was it not the real thing well it's because only dollars and pounds were redeemable in gold the United States dollar twenty dollars could buy an ounce of gold right other currencies they were not redeemable in gold or they were only redeemable in large amounts of gold bullion which basically prevented your ordinary citizen from ever getting gold right other currencies in Europe and in South America were redeemable in dollars in pounds so the idea was that the gold would tend to be concentrated in the United States in the United States could inflate they could increase the money supply and that would let other countries increase the money supply and when people in those other countries wanted to redeem their their Frank's or their really you could say their mark the German mark for for gold they wouldn't be able to get that they would get dollars right and especially in South America as well there's a very famous the so-called money doctor Edwin Kemmerer made quite a lot of money going around South America in the 1920s helping set up central banks right now what's very important about this system is that the Council on Foreign Relations right which was established basically a hundred years ago it was established in 1921 it heavily advocated this and it supported the creation of a new worldwide monetary system and it praised the heads of the Federal Reserve in the Bank of England Benjamin Strong and Montague Norman they said they're doing great work all of this stuff lots of Wall Street bankers had donated to the CFR they served as prominent directors these were some individuals associated with Coon-Loban in company as prominent investment bank JP Morgan in company another prominent investment bank and so on so this was a this was a big deal this was not something that just came spontaneously so to speak this was devised and this is planned after World War one and when you look at the holdings this is some new research that's been done over the past 15 years or so the you look at the holdings of central banks and governments their foreign exchange reserves by 1929 the United States dollar was actually composed 55% right so it had already technically beating out the pound right technically in a sense the dollar had gotten that a little bit of that world reserve currency status by then right so it's we already had gotten there by the 1920s okay so what happened well the the Great Depression destroyed the gold exchange standard there were runs in Austria and Germany and then that spread to Great Britain Great Britain left the gold standard in September 1931 then there was pressure on the United States pressure in South America a lot of South American countries in particular defaulted on their loans to Wall Street which really hurt Wall Street the entire government engineered monetary system had imploded and that put a lot of pressure on these over expanded fractional reserve banks and they started to implode in the entire system crumbled Great Britain adopted a fiat pound they put all of their countries on this new currency block Canada Australia New Zealand there's satellite countries we could think of and in early 1933 the United States left the the domestic gold standard or internationally this is settled after a little bit of experimentation by FDR internationally $35 would be redeemable for an ounce of gold all right so the United States was was it basically left the domestic gold standard and this was an issue Wall Street didn't like this JP Morgan and Company supported the United States leaving the gold standard in early 1933 but they everyone always wanted to go back and by this time Wall Street was was led really the major bank for a variety of reasons I can't get into was led by Chase National Bank a very prominent bank it had the most assets it had like three billion in assets so again this is before some of the feds moderate inflation but that was a lot back then and the the chairman of the board was Winthrop Aldrich right he was the son of Nelson Aldrich he had married John he was related to the the Rockefeller family believe he had married he had married one of the the the Rockefeller daughters he was he was LinkedIn and Aldrich and other Wall Street bankers they wanted a new gold exchange standard and Aldrich also around this time became a member of the Council on Foreign Relations okay so it was about okay how can we get rid of all these currency blocks Germany's got its own unique system going on Britain's got its own system the United States is no longer a world reserve currency how can we actually create this a new system okay how are we going to be able to do this what is what is the strategy so to speak well Wall Street got a big boost during World War one and World War two would lead to a similar boost so when World War two breaks out in September 1939 you've got Germany invading Poland Soviet Union follows not too long after that the Council on Foreign Relations their prestigious journal which is which is still around today foreign affairs the editor of that journal talks to the State Department having some secret communications about devising a new postal order so this has been this has been established this is in the archives this is in the history books etc the State Department didn't always give the Council on Foreign Relations a whole lot of credit for this but again that's that's part of a sort of a secret arrangement and it's very clear that the CFR influenced the the United States system you could say leadership after the war and in terms of the foreign affairs editor in his words he said World War two provides the United States with quote a grand opportunity and quote to become quote the premier power in the world but economics military politically etc this is our opportunity the British Empire was no more and now we can become you know the Duke of New York a number one so to speak and so the State Department agreed and there was various study groups they were called study groups that were devised between CFR officials other prominent intellectuals State Department officials during the war to think about the post war so you had one on armaments armor you know weapons you had one on diplomacy and it was all about how again the United States is going to be a new leader the new leader and from our perspective there's the economic and financial group which was going to devise the new economic order particularly regarding topics such as tariffs and also regarding currencies right how are we going to rearrange the world currency systems we don't want to go back to the 1930s where you have all of these currency blocks in these constant trade wars in competitive devaluations beggar thy neighbor policies as they are often known so on and so forth so what did Wall Street want well Wall Street in Aldrich they were very concerned about this new Bretton Woods system that the economic and financial group was devising remember Bretton Woods system the the main points is that the dollar would be a world reserve currency you'd have the creation of the IMF and you have the creation of the World Bank and as this proposal is being was was gone out into the public the CFR is getting ready to push for this proposal is going through Congress etc Aldrich in Wall Street they did not want the IMF making long-term loans because they would compete with their loans they wanted to be very clear that it would be a compliment and not a substitute to what they were trying to do so they didn't want and they didn't want countries going to the government agency instead of going to their own private institutions right so that was one thing they wanted the other thing they wanted is they also wanted the World Bank and the IMF loans given only the countries that repaid back their earlier loans from Wall Street yeah this is a very big concern they did not just want countries that were not paying their previous loans to then get more loans and then they would forget about the previous loans they'd taken out from Wall Street and this was a serious concern in 1945 87% of European bonds and 60% of South American bonds were in default okay the European bonds you can make that makes sense okay there's World War two there's basically Europe was completely decimated South America South America was had borrowed a lot in the 1920s and you still had some bonds that were in default a great deal of them and this was an issue because a lot of them were given out by Wall Street and they still still had them so what this really means is that Wall Street wanted these countries to raise taxes to pay off these loans that's more or less what it came down to they said look gotta have the money you got to pay off your loans before you can borrow from these new government agencies that were helping to create and Aldrich testifies in front of brand you testifies in front of Congress is a partially a lobbying campaign also the American Bankers Association a lot of stuff going on and Congress does revise Bretton Woods this that this was enough pressure and the agreement was that the IMF loans would only be for short-term currency stabilization which is more or less what Wall Street wanted there so they were able to get the system where it would really act as a complement and not as a substitute to the Wall Street loans okay so where does that leave us all right Wall Street get what gets what's at once and one of my one of my favorite pictures I guess I could say of Winthrop Aldrich because there's actually not that many pictures of him you can find this on Wikipedia etc is this is Winthrop Aldrich with Marilyn Monroe in the 1950s in his later life Aldrich was Ambassador to Great Britain and here he is at a nice dinner with Marilyn Monroe I have no idea what they're talking about I have no idea what Aldrich is thinking however I'm going to assume that it was about Bretton Woods right what else would you talk about and notice the surprise Aldrich is telling Marilyn Monroe how the system works and you can clearly just see she's completely mesmerized and just totally shocked at this so this is at least you can find these online they're very freely available I just find this is really funny this is Winthrop Aldrich which Wikipedia page he's got a picture of him in his nice military outfit when he was a young young strapping lad and then he's got some pictures of Marilyn Monroe so I again I'm going to assume they were talking about Bretton Woods during all of this so Bretton Woods gets past Bretton Woods gets created who runs Bretton Woods how is the system actually getting off the ground now something more a Rothbard was always very big on was the looking at the actual personnel who run the situation very often the government passes a law and everyone applauds we get a couple news articles about it and then it just sort of disappears from the public the public mind so the real attention early on in the post-World War two era was not the IMF so much because that was kind of relegated to a short-term currency stabilization status the real center of attention was on the World Bank because there were a lot of juicy reconstruction loans so to speak right a lot of loans to Europe European countries decimated by World War two a lot of loans to South America Europe was previously a major investor in South America and now the United States would supplant that role so it was all about the World Bank and one other thing about a lot of these loans is that you loan dollars to countries and then if they want to rebuild themselves they need to buy cement they need to buy equipment whatever where they're gonna get that from they're gonna get that from large American corporations right and this is a whole another sort of set of cronies I'm going on the Marshall plan unfortunately I don't have time to talk about that but it's a fascinating story in itself so here's how the process worked Wall Street lends money to the World Bank right they buy they buy World Bank bonds and other securities then the World Bank lends money part Wall Street part government two countries that repay their earlier loans from Wall Street right they raise taxes right those are the terms you want more money you got to pay back your earlier loans so Wall Street basically collects two checks they get the money they lent before and they also get money from from people paying off their World Bank loans so this is really the the World Bank was kind of like a Wall Street operation so to speak and what's fascinating is Aldrich gets Truman right president of the United States Harry Truman to appoint John J. McCloy as president of the World Bank I don't know how many of you have heard of John J. McCloy he was a he was a big big figure back in the day he was a prominent lawyer for Chase National Bank after his time at the World Bank what does he do with his life does he retire no he becomes chairman of the board of Chase National Bank and he also becomes head of the CFR so it's one giant family right it's one giant happy happy family of all the of all the cronies working together and so McCloy and then his successor Eugene Black who is also a former vice president of Chase they really does steer the World Bank in the Wall Street's vision right and this is this is a very important point that a lot of times it's not necessarily what's in the legislation per se but it's more about what's in the actual actions of the people appointed to run set agency this is why when investigating a government agency you have to keep investigating it even after it drops out from the public the news cycle so to speak and that's exactly what people didn't do or not that many people did you think of this World Bank is this big public public-minded institution instead it's kind of run by it's run by a bunch of Wall Street bankers okay so in the late 1940s in the early 1950s the World Bank makes loans in Asia think of in Japan in Latin America Chile other countries is very noticeable apparently the Chile loan there was a you can find this evidence that they demanded they got a the World Bank got a call from several prominent Wall Street bankers saying you have to make sure Chile pays off its earlier loans and like a day after that got the call World Bank said look you got to pay off your earlier loans before we give you this loan it's got to be some sort of package deal so it's very much you can see Wall Street's influence so you've got countries in Latin America you've also got countries in Africa and then especially in the 1950s you have countries in the Middle East in the 1950s that's when oil politics starts to become a very big thing and so again it's all part about making sure that these countries are linked to the United States into the dollar you're granting loans to these countries in dollars they're going to use those dollars to buy things to back their currencies etc. Chase National Bank it's post-war foreign loans increased by 85 percent it's a huge amount the Chase was granting lots of loans and in terms of dollars it was becoming a worldwide bank Chase and in other banks such as National City Bank which we now know of as city they established branches around the world right so you have these these global banking enterprises and they have their they have their banks in a lot of countries that the United States has now has troops in and that was a part of a condition they say well we're going to establish a bank in Japan or a bank in countries in Europe we want to make sure there's also United States protection and so on and that was that was heavily linked there's a lot of stuff going on with the Marshall Plan these banks were handling economic cooperation administration funds which is the agency designed to administer the Marshall Plan they were heavily involved in that and the dollar becomes the world reserve currency other currencies are now redeemable in dollars and there's foreign aid basically pushes all of these dollars out from the United States across the world right so you have this huge supply of dollars there are now dollars in Europe there are now dollars in Asia there are dollars in South America there are dollars in Africa there's dollars everywhere right dollars for you dollars for me dollars for outside right dollars for everybody okay and this was the beginning of the of the establishment or not really you could say the the yeah the beginning of the of the establishment of the United States is having that world reserve currency status which has continued after Bretton Woods right there were some issues in the 1970s but that that super you know that that superpower status has continued in a big reason for that was Wall Street right Wall Street that was one of their motivations and they were able to accomplish that so to conclude Wall Street lobbied for a new international monetary system and they got key personnel appointed and that's the first important thing you need to remember from this talk the second important thing you remember from this talk is that Bretton Woods led to dollar dominance and benefited leading United States banks okay that's the second important thing you need to know from this talk and the third important thing is you should buy cronyism rise of the corporate estate when it comes out right that's the third and the most important thing you should know from this talk so thank you very much