The international monetary system was backed by gold reserves and allowed currency holders to convert their coins and notes into the precious metal.

Under such a system, exchange rates were fixed in relation to the value of the metal.

The gold standard was first put into practise in the UK in 1821. Before this, silver had been the main monetary metal.

But the gold standard became more and more prevalent. By the 1870s, the US, France and Germany had adopted the same scheme.

Three times and you're out

All seemed to go swimmingly until the First World War, which upset the fiscal apple cart.

Economies came under such strain to fund the war effort that their respective currencies were shaken up and lost their relative values.

Paper money became inconvertible and gold exports were restricted.

But the world's bankers were not easily put off and again in 1926 Britian went back on the gold standard and other countries soon followed.

But this time it was short-lived as the Great Depression came along to throw economies into turmoil. By 1937 not a single currency was able to maintain itself on the gold standard.

World War I: Blew apart the gold standard

This was to remain the case until well after the end of the Second World War.

In 1944, the world agreed a new system of foreign exchange based on fixed rates against the US dollar which, again, was backed by gold.

Under the Bretton Woods agreement the value of gold was set this time set at $35 dollars per ounce.

By 1958, as currency controls were lifted, most countries followed the new system.

This was to be the case for the next dozen or so years until in 1971 the US, faced by dwindling reserves and a growing balance of payments deficit, came off the gold standard.

This was the final nail in the coffin for gold and never again was the gold standard to be revived.

The international money system is now based on the dollar and other paper currencies.