AN HISTORICAL EXAMINATION OF THE VALUE OF

THE US DOLLAR IN RELATION TO THE INTRODUCTION OF

NEW INTERNATIONAL CURRENCIES

DISSERTATION

Submitted by MARIA P. GOMEZ

ID 10005045

Supervisor Dr GEORGE KAPAYA

For the degree of

MASTER OF BUSINESS ADMINISTRATION (MBA)

UNIVERSITY OF WALES INSTITUTE

Cardiff ACKNOWLEDGEMENT

“Praise the LORD, all you nations; extol him, all you peoples. For great is his love toward us, and the faithfulness of the LORD endures forever.”

Praise the LORD. (Psalm 117)

I would like to take this chance to thank my family, friends and researcher supervisor from the bottom of my heart for extending assistance in completing this dissertation. First of all, I would like to thank my father and my family, who have always been a source of inspiration for me, for giving me unconditional support and encouragement in all aspects of my life. It is a pleasure to thank those who made this dissertation possible, especially my supervisor Dr. George Kapaya, who has been supportive, and all my teachers during the MBA for their contribution and cooperation in developing my studies and my career. I would also like to thank all the staff of LSC for their help and support, especially staff from the library that have been always helpful. I cannot forget to say thanks to my classmates during the last semester, my colleagues and friends for all the cooperation and help. God bless all of them.

DECLARATION

I, (Your name), would like to declare that all contents included in this dissertation stand for my individual work without any aid, & this thesis/dissertation has not been submitted for any examination at academic as well as professional level previously. It is also representing my very own views & not essentially that are associated with university.

Signed __________________ Date _________________

ABSTRACT

In this research we try to explore the notion of dollar as an international currency and its hegemony in world capital market in a holistic context. The main function of this study is to analyse the function of the US dollar as international currency in the development of trade between nations, during the WWII and the post-war period; starting from the US economy and its consequences in other countries. How it would affect the US economy and international trade if the currency is swap for different one or a basket of currencies, like the euro, the sterling pound, the yen or the Chinese. According to that, this study started analysing the historic role that the dollar had in the post war time and how influenced the development of the US economy, the creation of the Bretton Wood System, how was the shift from the gold standard to the US dollar and how it affected the economy of the nations. The dollar as international currency gives to the US a lot of political power in international relations, as dominant currency is associated with political and economic world leadership. After the European integration and the creation of the euro, how it affected trading between the US and Europe and all countries, and what are the political implications, as the new currency began to surpass the dollar in international transactions. How the devaluation of the dollar have affected ...