Economics is defined as the branch of knowledge that deals with the production, consumption and transfer of wealth. The fundamental principles of economics are clearly laid out, it can be argued that the theories discussed in his study are universally accepted as truth. However, isn't it interesting to note that, given this information, the entire world continues to fail to implement efficient and effective policies to control their economies in a sustainable manner? This analysis will evaluate the history of international monetary policies, starting with the international gold standard, which emerged in 1871, followed by its predecessor, the Bretton Woods system, and finally the fiat currency system adopted at its end, and used today. Each system contained its own set of advantages and disadvantages regarding international trade, balance of payments, economic growth and inflation. When considering each system one must not forget that there will always be an opportunity cost. This is a key point when talking about these three systems. To get started, you need to have an understanding of money. In the late 1800s, Germany adopted the gold standard. This meant that the currency issued was backed by a predetermined value of gold. To understand this, you can consider a storage facility. People will place their valuables in these units in exchange for a receipt from the storage unit owners. This receipt constitutes a direct claim on their merchandise. Applying this example to the gold standard you will notice a safe element in the gold standard. As explained in more detail later in this analysis, the use of the gold standard meant that economies were subject only to market forces. They could not be manipulated in the way we currently do... middle of paper... p., and the Web. May 10, 2012. .Economist, The. "What Has the Government Done to Our Money? Floating Fiat Currencies, March 1973 -?" Ludwig von Mises Institute: The Austrian school promotes freedom. Np, nd Web. May 10, 2012. “History of Fiat Money.” The US debt bubble will affect gold, silver and the economy. Np, nd Web. 10 May 2012. .Horwitz, Steven. "The Freeman | Ideas on Freedom." The Free | Ideas about freedom. Np, nd Web. May 10, 2012. .Mishkin, Frederic S., and Stanley G. Eakins. Financial markets and institutions. Seventh ed. Reading, Mass.: Addison-Wesley, 1998. Print.Money: A Brief History of the American Dollar. Director of the Mises Institute. Perf. - . Mises, 2000. Film.