Until World War I it was always in prinicple possible to go to the central bank and ask for gold or silver in place of your bank notes. Now and then, however, such as in Germany after World War I, there would be a tragic run on the banks, leading to silly inflation and the downfall of the national economy. This was a big factor in the upward thrust of the German nazi party and therefore might be declared to have caused World War II. Round the same time, the global monetary Fund and World Bank were made to assist in maintaining world economic stability. This held until the early 1970s. The US dollar was dropped as a reference point for almost all of the major nationwide currencies, and the relative values of different currencies started to vary according to business conditions and market forces.

Suddenly it was possible to trade in currencies, and the financial establishments were fast to recognize the potential. Banks had to exchange money to offer their customers with foreign currencies for travel and importing products, but pretty soon they were exchanging far more than they wanted in order to profit from the continuous rise and fall in the values of the different currencies.

Steadily, personal investors joined in the game and the foreign exchange market mushroomed. The development of the web meant the market became accessible to anyone, in principle. To deal with the massive numbers of potential new clients and because their costs were dropping, brokers commenced reducing the minimum investment amount. At about that point in foreign exchange 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.