After WWII the continental European physical capital base was destroyed and local credit and currency system valueless. The Germans were living on 800 calories a day with strict rationing. Central Europe had a barter economy.
England wasn’t in much better shape. John Maynard Keynes had been running the economy from the ‘30s until he died during the war. English industrial productive capacity really was very low. Food rationing in England continued until 1949, as I recall, and was strict. For instance, there was a pint of milk a week for babies and toddlers and none for anyone else. Strikes were endless.
Japan, of course, was nothing but fields of rubble. I have seen them.
Russia and China pulled out of the world economy with Communism.
The result was, if you wanted to buy something, like enough wheat to make a loaf of bread, you had to buy it from the Americans. Since you had no money you had to beg for a loan up front. If you wanted a bulldozer, steel girders, ship engines, a car or truck, an airplane, or a loan, you went to the Americans.
Americans had the nuclear weapons, which, to the people of the era, was like Americans being from the far future, as if they were the alien from “The Day the Earth Stood Still”. The most serious mojo there can be.
There was a rather severe post war recession in the USA. The solution was to loan money to all sorts of foreigners so they could buy American made products. See the “Marshall Plan”.
This all worked because the world wanted the US dollar. The USA had immense prestige in those days. (And almost all of the gold in existence was in Fort Knox.) The dollar was literally “as good as gold”. The world is still packed full of hoarded US$100 bills. This, of course, made it easy for Americans to cherry pick physical assets all over the world, many of which were very profitable.
As a result of all this interest rates world wide could be held at below market equilibrium without intolerable inflation (due to US$ hoarding as a “reserve currency” by individuals, banks, and governments. Just like during the Clinton Era as the Chinese came on line.) It felt like increasing prosperity to most people, and to most Americans things got more prosperous without seeming effort or cost. If you weren’t alive in the 1940’s you can have no idea of how hard Americans used to work.
Thank you very much.
I was born in 1947. My parents were fanatically frugal. At 95 they both still are.