Till World War I it was always in prinicple feasible to go to the central bank and ask for gold or silver in the place of your bank notes. Naturally, this very rarely occurred in serious amounts and many state banks stopped keeping enough gold to cover. On occasion like in Germany after World War I, there would be a disastrous run on the banks, leading to crazy inflation and the collapse of the national economy. This was an important factor in the upward push of the German fascist party and therefore may be said to have caused world war 2. To prevent a similar disaster occuring in a fragile country again, the Bretton Woods agreement was drawn up in 1944. This ‘permanently’ pegged all countrywide currencies to the US buck, and fixed the value of the dollar against gold at $35 per oz. Round the same time, the international monetary Fund and World Bank were created to help in maintaining world business stability. This held till the early 1970s. However, countries were developing at different rates and in different directions, and in 1971 President Nixon postponed the gold standard. The US dollar was dropped as a reference point for most of the major countrywide currencies, and the relative values of different currencies began to fluctuate according to business conditions and market forces. All of a sudden it was feasible to trade in currencies, and the finance institutions were fast to recognize the potential. Banks had to exchange money to offer their clients with foreign currencies for travel and importing products, but pretty shortly they were exchanging far more than they required to profit from the continual rise and fall in the values of the different currencies. Gradually, personal investors joined in the game and the currency market mushroomed. The development of the Net meant that the market became accessible to anyone, in theory. To accommodate the massive numbers of potential new clients and because their costs were dropping, brokers began reducing the minimum investment amount. At about that point in forex history, daily trading turnover has reached between $3 and $4 trillion, more than the trading volume of all of the world’s stock and bonds markets added together.