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What if there was a single global currency ?

I was going through the world economics the other day and thought on why shouldn't there be a common currency to the whole world ? There wouldn't be any need of the interest rates variation to compensate for the drop of the currency of that particular nation. Share your opinions on this, does this look valid to you ?

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  • Jul 23 2013: There are many more issues related to making one currency for the world

    1. The world should become one country
    2. All the countries , should become it's state
    3. All the citizens should become the citizens of the world
    4. All the citizens should be governed by the common law
    5. All the products, Agriculture , Medical , Mining & technology should be available to each & every
    citizen of the one world.
    6. All the citizens should enjoy the same judicial system, irrespective of the cast creed or region.
    7. After Attaining all these practically , economically the one currency system will work
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    Jul 23 2013: What the people of the world want is stable money. Since its creation, the euro has been remarkable stable. The people of Greece, Ireland, Portugal, and Spain understand that it wasn't the euro that caused the economic difficuties in their countries. For both reasons, the euro is popular.
    Ironically, the problem with the euro was the creation of high expectations that having the euro would make countries immune from other monetary realities, such as the need to balance budgets and to build homes where there is a demand and not just where there are low interest rates.
    What Greece needs to do is get its fiscal house in order, including reforms of its tax collection services and movement of some key sectors into the private and competitive economy.
    Yes, it's true that eurozone countries can no longer devalue their currencies in order to boost exports. However, such devaluation was always a double-edged sword. While the boosts in exports were well recorded, it was not so well recorded how that devaluation hurt the rest of economies, such as by the flight of money to safer havens such as London, New York or Zurich. Also, devaluation increases the costs of imports so manufacturers who rely upon imported raw materials were in worse shape than before.
    It's also true that the eurozone countries have learned that their banking systems much work more closely together and in synch with the European Central Bank.
    Today, the 193 U.N. members use 142 currencies, which will decrease to 141 when Latvia joins the euro. The number will drop further when the East African Monetary union begins and further when more European countries join the eurozone. As the remaining countries with their own currencies join monetary unions, and as the monetary unions merge with each other, the "tipping point" will be reached and the Single Global Currency will be achieved. Why not plan for that moment instead of denying the obvious trends and reality?
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      Jul 23 2013: I often wonder if there was a conversation some time while they were planning the roll out of the Euro that included questions like "Do you think the fact that Greek citizens don't seem to pay a lot of income tax will cause problems?"
  • Jul 23 2013: Hi Avishek,
    that's what they tried to achieve with the euro. I am no economist, but know that since the introduction of the euro, prices have increased and currency value has fluctuated drastically in the past 10 or so years. Making a living has been harder than ever, and several countries have gone bankrupt.
    Now, whether this has to do with one common currency or not, I don't know. I do know that it has been harder to get by on a meager income since the euro, even before the whole bank crisis.
    It has made it easier to travel, with the exchange rate of each different currency no longer an issue. One common currency has also been damaging culturally - there was something very personal and beautiful about foreign currencies.
    I don't know what the effect of a global common currency would have on inflation. Or would inflation vanish? What do you think?
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      Jul 23 2013: "Or would inflation vanish?"

      not at all. the history of modern money shows that inflation is limited by competitors. in the beginning, banks inflated money. but they had to balance it, because sooner or later they were sucked dry of gold, and when the word got out, depositors rushed to take what's left. that's the bank run. banks did not like that. they started to propose mechanisms that would allow them to inflate more. finally, after a century of struggle, with the help of the states, they managed to establish central banking. central banks create a nation-wide inflation, eliminates bank runs and other threats. and inflation took off like a rocket.

      but nation-wide inflation also has its limits, the other countries. if there are competing currencies, it becomes apparent that a money loses value, and people start to use a foreign currency instead. you can limit this with regulations, but the pressure grows, and sooner or later something has to be done.

      hence the idea of world currency and world central bank. central banks and governments push for a global solution, so they could get away with inflation, as if everyone inflates at the same rate, there is no escape from it. there is no progress, because different governments want to inflate at a different rate. so they can't agree. they call it "sovereignty". but with events like greece, potentially followed by spain, and the fact that the biggest superpower, the US, follows a highly inflationary policy, there is an increasing pressure to come to an agreement.

      if a world currency comes about, with a world central bank, on the basis of keynesian economics, inflation will not stop. on the contrary, it will grow without check, until the entire system finally collapses.
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    Jul 23 2013: The idea of a single currency is a lot like communism, nice in theory but would never work. Because of the fluctuations of a country's economy it's not feasible. The economy in many countries is crumbling and a single currency might become too high of a price for them to earn or spend. We see this in history when the Germans after world war I, the German people couldn't afford the price of a loaf of bread. If we had a world currency then we'd have to have a world economy with everyone sharing the load. which would inevitably lead to wars.
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    Jul 22 2013: Lejan,
    What the people of the world want is stable money. Money they can earn and save and not worry about a future loss in value due to inflation or devaluation. I understand that the people of Greece, Ireland, Italy, Portugal and Spain WANT the euro to remain as their currency. The euro has been remarkably stable since its creation.
    Yes, it's true that countries in the eurozone no longer have the ability to escape their debts by devaluing their currencies, but that loss is like losing the ability to push on a string. While devaluation may help debtors and may help exporters, there are at least an equal number of losers. One loss for a country which devalues is currency is that the people with money that money to safer places, such as London, New York and Zurich.
    The problems in Greece were not caused by the euro, except to the extent that too many people, creditors and government officials alike, thought that being a eurozone member exempted the country from responsible accounting, budgeting and tax collection. The good news is that Greece can fix its fiscal house and its economy while relying upon a stable currency. Economic recovery is more difficult in a country where a currency has also collapsed.
    Countries in the eurozone now know more about the needs for bank cooperation and security than were though necessary during the first few years of the euro, and those reforms are coming.
    Back to the subject of the Single Global Currency, there are currently 141 currencies for 193 members of the United Nations, and that number is gradually decreasing as more and more countries join or create monetary unions. At some "tipping point" the world will see the obvious, which is that a Single Global Currency is the only reasonable alternative.
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      Jul 26 2013: Morrison,
      money in itself has no value on its own and its purchasing power is nothing but a dynamic Agreement and trust of trading entities. Its creation is privatized, debt-based and hops into existence out of nothing (Fiat money). And all of these factors are no condition for stability, especially as any debt based value creation is incapable in its inherent nature to stabilize itself. And because of this and periodically, agreements will change and trust will be broken at that point in which an economy becomes more and more unable to withstand the rising burden of the dept trap.

      What the people of the world need is a debt-free monetary system, which serves their common wealth and which is not held as a monopoly in the hands of a view private companies.

      Devaluing currencies does of course create losers, thats the whole idea behind it, but the current understanding of 'lending money for an interest rate' is a risk taking activity in its very nature. And as long investors are willing to take the profit, they have to take the risks coming with it. But exactly this principle has been perverted in the recent bailout programs for a 'to big to fail' private bank system, which grew itself out of control. So tax-money is used to compensate for the risks, yet any benefit remains privatized.

      A world currency wont fix the flaws of the given monetary system, it won't stabilize it, nor benefit the common wealth of all involved people. It would enslave all nations by taking away their only escape mechanism of debt relief and thereby enslave their people even more to make up for it. I don't think this is what 'the people' want, but I do see, that this is heaven for investors, as all their risks suddenly shift to the shoulders of the working people. Nice try, well thought, but NO THANKS!

      The Euro only appears to be stable since its creation, but it has never been, because it had a ticking 'time fuse' by joining countries together, whose economical strength didn't match.
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      Jul 26 2013: 'One loss for a country which devalues is currency is that the people with money that money to safer places, such as London, New York and Zurich.'

      That is true. What is also true is, that this could be minimized by 'freezing' any fleeing capital on the move and by declaring it illegal with high penalties. Money usually gets transferred via computer transactions, so one of the most easiest ways to control it. And those 'suitcase people' get hunted.

      By the way, did you know that within the current financial crisis in Greece, many rich people of Greece transferred their money out of their country to avoid it from being taxed, because the Greek government can not devalue its currency and therefore has to increase the taxation to compensate for this? This way and again only the 'ordinary people' have to pay the bill ... nice move ...
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    Jul 22 2013: There is no question that the world is moving toward a Single Global Currency, managed by a Global Central Bank within a Global Monetary Union. The important questions are when, and how smooth or costly will the transition be.
    The success of the euro, despite the recent problems caused by national deficits, shows that monetary union is the best way to ensure monetary stability. If 17 countries (soon to be 18 on January 1, 2014 with the accession of Latvia) can use the same currency, why not 192? The world should begin researching and planning now for a Single Global Currency, which would eliminate the current foreign exchange trading expense of $200-400 billion annually, eliminate the need for expensive foreign exchange reserves, eliminate currency fluctuations, and bring other benefits worth trillions.
    There would be one core global interest rate, as established by the Global Central Bank, with national or regional variations as appropriate.
    The Single Global Currency Assn. promotes the implementation of a Single Global Currency by 2024, the 80th anniversary of the 1944 Bretton Woods conference.
    That's only 11 years away. The Assn's website is www.singleglobalcurrency.org. See, also, the book, "The Single Global Currency - Common Cents for the World."
    Morrison Bonpasse
    President
    Single Global Currency Assn.
    Newcastle, Maine, USA
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      Jul 22 2013: 'The success of the euro, despite the recent problems caused by national deficits, shows that monetary union is the best way to ensure monetary stability'

      Despite the mainstream media terror, the Euro is NO SUCCESS which, by a multitude of other reasons, is based in the diversity of economic powers of its member states, which in the current case of Greece does not allow anymore for a state to devaluate its currency to balance it against rising debts. Or even to declare bankruptcy of the state if anything else fails. As it should be known by now, the current economic system is not capable to operate and to remain stable, which is not a feature, but simply a bug. Also known is, that for several reasons, countries tend to get themselves into debt - at least there seems to be worldwide tendency to do so. But what do you do, if your economy doesn't work that well for some time, yet the monthly payments on your dept are due? Regardless what you do, you open just another vicious circle. Either you rise taxes, which reduces the purchasing power of the people and the will to investments of 'job creators', or you start fighting dept by taking just another loan to be able to leave your economy alone ... But what when the crisis lasts and is not getting any better. Then you reduce the cost of the government, which is just another word of 'austerity', but comes with a lot of restrictions for the citizens, and additionally doesn't kick-start economy, but makes it even worse... So only if a nation owns the authority on its own currency, it is able to devaluate its value to be able to cope with the depts, by reducing the impact it is going to have by doing so of its very economy and its people.

      Therefore Greece is trapped by the Euro, because it does not have authority over it and therefore is forced to cast draconian austerity-programs over its people, to meet some random 'stability criteria' dictated mainly by Germany and France, thereby undermining the rest of EU democracy!
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      Jul 22 2013: The idea of a Global Central Bank I would only accept at a point in time, in which all countries, all people on this planet reach the same standard of living, all of them, have equal purchasing power, the same working conditions and that this bank is not in the hands of any private company.

      Anything else but this is neither realistic, nor economically stable, which out of itself defines the need of the introduction of a worldwide balanced, sustainable, fair and inherent stable economic system, of which we are a long long distance away.

      Who now things about 'socialism' or 'communism' is not only unimaginative but stuck in outdated 'cold war' ideologies...

      Morrison, please take a closer look at the ESM, the European Stability Mechanism, and decide for yourself, if you consider it worth to sacrifice democracy over the violent attempt to calm down 'hyper active and super nervous' markets which root in a destructive monetary system.

      The tax money taken from the European people by this ESM is not bailing out the Greece people, as they are suffering already and are going to suffer even more, this tax money is taken to bail out Investors, such as German and French banks (and others), who contradict the original principle of taking the consequences of risky decisions.

      Take a close look at the 'obligation of secrecy' and the 'immunity' of its members and its buildings, which create a complete vacuum within EU territory against its legal EU legislative and judiciary powers. If this, by its very nature, is not against the foundation of ANY democratic principles, I don't know what then is. And if you still call this a 'success of the Euro', we then certainly have different understandings about what success means to us ...

      I don't wish the world to be enslaved as such, as Europe is already to much for this be allowed to happen!
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    Jul 22 2013: i recommend to read this book:
    Murray N. Rothbard: What Has Government Done to Our Money?

    available for free in online form (pdf) at
    http://mises.org/money.asp

    tl;dr: there was a single universal currency once, and it was gold. modern currencies came to life in order to grant governments the right to "tune" the money, which, at the same time, out of pure coincidence of course, grants them a huge amount of income. that can be seen as a hidden tax. so ask yourself: what is the chance that governments give up that power and source of income?
  • Jul 22 2013: Look these are all theories and some of them will work

    But my opinion is If you like the Euro in Greece You will really like the International there.

    Beware of economists bearing gifts.