Why Agreements Aren't Necessary
Yes, I picked a bad day to blog, but rec's aren't important to me, educating you is (and yes, I'm being sarcastic). That said, news today from the G20 "The world's leading advanced and emerging countries vowed Saturday to avoid potentially debilitating currency devaluations"
What a nice agreement. Let's see if everyone adheres to it.
But agreements wouldn't be necessary 120 years ago, during the hey day of the gold standard. Devaluing your currency, either by putting less gold into your coins or by making artifically low interest rates, only sent MORE of your gold to other country's. To stop the loss of all your gold, you had to strengthen your currency.
Gold has one serious weakness and it became its ultimate downfall as a currency standard, it really isn't suited towards war. Of course we could argue that is golds flaw, its a flaw in humans. None-the-less, long wars make gold a poor commodity to back up a currency. The other flaw is that paper is well accepted while the war goes well. German marks were in high demand from 1939-early 1942. This gives politicians cover when embarking on crazy ideas like killing millions of people, but that's another discussion entirely.