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-Todays international monetary strategy is private with only marginal official participation. Showdown between government activity and banks during currency crisis of 1972. ?Smithsonian Agreement ,? allowed greater flexibility in currency values. In the 70?s U.S firms weren?t even loyal to the dollar. Sophisticated guesswork playing a major role in international finance. Everyone is arduous to cash in on exchange fluctuations ?leads and lags.? (I say why not) interchange banks are big losers their intervention, and inflow of dollars was so large that it was swellingary. Lesson learned is that they cannot underwrite private capital flows. Firms did protect themselves against the anticipated devaluation over a lasting term by shifting the currency composition of liquid assets and debts, and by prepaying accounts payable in currencies expected to be devalued. In 1973 we basically exported inflation to Europe. No one is sure how close we came to a financial calamity in the 70 ?s, but it?s a fact that we were on the edge. *Franklin-Herstatt failure contained. Floating rates survived.Chapter Four-The Economics and Politics of spherical Debt-In the nineteenth century, private banks helped countries cope with swings in the trade cycle and made extremity loans to keep governments afloat. A reason why bankers disliked the Bretton Woods conference was that it created a competing public sector institution, the IMF, to provide short-term loans to countries experiencing trade and financial difficulties. The Third World owes the Western banking system over half a trillion dollars. Lost cause thinking we will be payed back. Global debt crisis had two fundamental causes-importance of Third World countries in global banking renewing of 60?s and 70?s series of economic shocks that stunner the world economy in the 70?s.Richard Weinert lists four main factors that are responsible for the banks? expansionist thrust into the Third World in the 70?s servicing client ne eds, defensive expansion to keep clients, remuneration exploitation, and the opportunities offered by Eurocurrency markets. Economic shock of 70?s inflation, dramatic make up in oil prices, and slowdown in world economic growth (recession on 74-75), soaring interest rates.