Rebellion of the Poor

From the perspective of monetary policy the main problem of the post-war years was the convertibility of European currencies, i.e. the power to exchange them into other currencies in an unlimited manner. Convertibility is an integral part of any free-trade order. The lack of tariff barriers alone does not guarantee the free movement of goods and services across borders. If the residents of a country cannot freely obtain dollars for import transactions, this kind of arrangement impedes US exports as much as customs duties or trade quotas. Since the European countries had to spend their few hard-earned dollars mainly on acquiring strategically important production inputs, a company that wanted to apply for dollars had first to receive a permit from the central bank every time. Foreign currencies were sold to civilians planning to go abroad in very limited amounts, if at all.

Website: International Centre for Defence and Security (ICDS / RKK) http://www.icds.ee/

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