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Edward Gonzalez

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Creating a global currency

Government currency as we know it today is a perceived value. We work and are paid based on the perceived value of our work. We pay for products on the perceived value of those products or services. When an economy or government experiences trouble the perceived value of their currency is impacted as well. This can be dissuaded by establishing a global currency. With the advent and growing use of Bitcoin, how long before currency comes in only one form. The Euro is a great example on how many countries can agree to work on one standardized form of currency. With the increase of trade among nations and the internet making it easier for consumers to buy products online developing a standard global currency makes sense.

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    Aug 9 2013: Hey Edward
    My first response to the idea of global currency is "of course." Then I think creating new currencies itself might be a useful feature of global economy. As bitcoin is proving, almost any mutually agreed value can be represented in a currency of some sort.

    Maybe the idea should morph into finding ways to have as many people as possible creating currencies, each one for the express purpose of facilitating some class of transaction. Frequent-flier-miles works. My neighbor's IOU-favors works too. Points on various accounts (Starbucks, etc.) becomes a playful extra form of currency. Even volunteer services (free by typical accounts) can have a pay-it-forward value.

    Bucky Fuller had the idea that real wealth is practical knowledge. Maybe that can be transferred to some form of currency like a diploma of sorts. The Barefoot College in India has such currency without paper. It's an understood acceptance within a community that recognizes a person as resourceful in some helpful way.

    I applaud your efforts to make sense of economics. It seems even the best economists have been having a hard time lately. Keep up the good thinking.

    Encore! Encore!
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    Aug 8 2013: Establishing a global currency is not enough in itself to dissuade the effect that cause a country's currency to fall in value. There are many other reasons to create an effect to that end. You claim that when there is just one currency which is a global, there is going to be no worries about the fluctuations of the value of the currency. But then, there is going to be another concern. This time, whoever gets the highest amount of money or the authority to produce the highest amount of money, will dominate the market, and nothing will change.
    There is another important point i'd like to make. One nation's issuing his own money and with his statemen's and his culture specific things and places on it, this is something different. Your culture, your nation and your places and your pride on it. No thanks. ı am ok with my currency...
  • Aug 8 2013: Wrong. A global currency will fix nothing. Everything will still function on "perceived value". The Euro did absolutely NOTHING to "fix" this for Europe. A "standard global currency" is irrelevant in the present day, when all "currency" is merely hunks of rubbish and the actual money is now information stored in computers via "accounts" and "transactions".
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    Aug 6 2013: The Euro is a success but also got some major problems to Europe. The currency is the same, but the laws, and the economical situations are far from being standardized and balanced. As an example are the IMF and ECB ransoms of Ireland, Greece and Portugal. In Portugal, the EURO got to inflated prices. Things almost doubled price. I see a global currency as a interesting project...if the economical and markets culture get changed in the next years. I see that as likely improbable to happen. The Bitcoin only can survive if someone profit with that, and I think that it's not the main goal fot the existence of an global currency.
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    Aug 5 2013: I'm a hopin but the government does not like competition.

    When you consider how much of an advantage the FED gives to the croynies.

    With guaranteed profits that will bail out any stupid investments they make.

    With the 2 trillion dollars stolen from savers since 2001 from artificially low interest rates

    And the unkindest cut of all: the low interest rates encourage speculation and carry trades rather than investment in small business.

    The last sentence is the very reason there are no jobs as the money that otherwise would be invested in small business is instead going to low risk speculation.

    Read more about it here:

    http://www.peakprosperity.com/blog/82488/fed-matters-much-less-think?utm_campaign=weekly_newsletter_86&utm_source=newsletter_2013-08-02&utm_medium=email_newsletter&utm_content=node_title_82488

    So yes bring on Bitcoin and crowdsourcing as the main reason to support them is in the above.
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    Aug 12 2013: As you can tell from the picture on my profile, some of us prefer cold, hard, cash.
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    Aug 10 2013: At present almost all currencies can be traded with other currencies, with a global currency most of the exchange and transaction costs will disappear, I think a global currency would have an effect on purchasing power parity of developing nations, however autonomy and sovereignty of smaller and weak nations will be in question, but this might not be a problem because we may see more mobility of human resources across the globe and more international interaction at an individual level because of a common currency.
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    Aug 10 2013: All economies around the world were weekend, it was a recession. The problems for some European has to do with poor economic and fiscal decisions. Even in the current depressed economy the Euro is strong when compared to the US Dollar. But in all the Euro is still highly competitive against the dollar and has remained rather consistent over the past ten years. As a matter of fact the Euro exchange to the US Dollar is stronger today than it was in 2003.
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    Aug 10 2013: A GLOBAL CURRENCY ALREADY EXISTS!!! IT'S CALLED TIME!!!
  • Aug 9 2013: The Euro did not change price fluctuations within Europe, either. Indeed, the Euro has ultimately fixed nothing and only weakened the stronger economies of Europe as they desperately try to prop up the self-poisoned economies of Europe or risk their shared currency collapsing.
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      Aug 9 2013: They are just waiting for the price of teeth brushes and teeth paste to fall first, I guess.
  • Aug 9 2013: Bitcoin is global right?
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    Aug 9 2013: We could eat it, we could make clothes out of it, and we could build shelters out of it. Gold too!
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    Aug 8 2013: Hello Enis,
    I'm sorry if you believed I made a claim that there would not be a variance or fluctuation in currency. I must have missed where I wrote that. I believe that some people may be reading or assuming more into my suggestions. Yes there will always be countries that have more than others. My suggestion is not to change economies or improve the economic principals of individual governments. The concept is to reduce inefficiencies in trade and manipulation of markets. It will also help stabilize the inconsistencies in trade due to the fluctuations in currency between countries. This standardization would not impact the sovereignty of nations and I understand that while the term global is being used, that it may be limited to a portion of countries that maintain consistent trade with each other. In regards to printed currency, the transactions I am discussing are mainly electronic and bundles of cash are not being exchanged for products and services.
    Enis, your points are valid that globalized currency will not serve economic problems, but that was not the purpose of my argument.
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    Aug 8 2013: we had a single currency, and it was gold. what happened to that?
    • Aug 8 2013: Well finaly we will realise that gold is something that will protect us. The problem in the world with gold is that politicy and central banks can't print gold like they do with the dollar (euro etc.). So for them gold is something bad that they can't regulate. If we start believe in gold the financial system will fail because the trust in the dollar will fail. They central banks make gold not popular (see the prince of gold last months) because we will believe more in the dollar and our current financial system.
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        Aug 8 2013: i see no problem with the financial system failing. bad things should fail. we can't get rid of bad things without failure.
        • Aug 8 2013: Bad thins will always fail once.. but if the financial system fail, it will bring us in a new crisis..
          That does not mean that I think the current system is good.. I think our system is very bad and it is only good for the people who have influence.. who can earn a lot of money with it.. It is made to fail..
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        Aug 8 2013: there is no new crisis. the previous is still going on.
        • Aug 8 2013: I did not say that there is a new crisis but a redical change of our system will bring us in big trouble and a new crisis. If they will change things in our (financial) system they have to do that slowly and with little steps..

          The previous crisis is still going on.. true... but it will fix nothing with one currency or so...
  • Aug 8 2013: The idea is good! But I think we have to think different. Not in one currency but to buy stuff more easier than now. At the moment if you will buy something in China you have to do a lot of things before you have it. Also to travel to a other country. I think we can make different countries and economics more closer to each other and in my opinion that is important but also very difficult.
  • Aug 8 2013: While theoretically possible according to very basic economic models, a global currency is highly unlikely, if not impossible for a numer of reasons. As Vincent said, with a global currency, there would cease to be individual economies in the same way there are now. The system would become increasingly volatile and shocks or recessions in one region could quickly create a large scale global crisis. Also, as the currency market underpins the financial sector, moving towards one currency would essemtially destroy the financial market which would then obviously have huge flow on effects. Trade would become increasingly difficult, especially for poor, or predominantly importing countries. Essentially, a global currency would force a much larger gap between developed and developing nations and exacerbate the prevalence and severity of crises.

    More importantly though are the political requirements underpinning a global currency. As the US is currently the global hegemon, it is exceptionally unlikely they would relinquish the dollar as it would significantly reduce their economic dominance and subsequently global power. A global currency would require an unprecedented level of cooperation between states, as well as the establishment of some form of overseeing body which would regulate the entire system and ensure adherence. It is highly unlikely that any state would agree to a global currency as it is not of benefit to their people.

    Rather than being an evolutionary step in the currency system, a shift towards a global currency would essentially involve the evolution of society into a different form.
    • Aug 8 2013: The Euro did not eliminate individual economies of Europe.
      • Aug 8 2013: No, but it did change them as they no longer had economic policy autonomy, which reduced the capacity for individual economies to respond to shocks.
  • Aug 7 2013: Hi,

    My name is Vincent and I like this subject so I will give my opinion about this:

    One currency is impossible. When this happen there will be no economy anymore. Only countries like USA and Canada will survive because they can make everything inside the country. Other countries have to buy it and will export less, because they pay everywhere the same price. There is no normal competition between coutries and companies.
    • Aug 8 2013: A single currency does NOT mean a single price. IT DOES NOT MEAN THAT! The USA does not have "a single price" for goods across the country. Prices can fluctuate wildly within a single currency.
      • Aug 8 2013: Prices will not fluctuate. Let me explain. Price of coffee in USA in dollars... maybe you can buy it in Brazil because you have a pofit with the different forex price. But when there is one currency you can't make that profit.....
        • Aug 9 2013: Prices WILL fluctuate. Let me point to this little thing called "reality", which you seem to pretend does not exist. Within the USA, which has ONE CURRENCY, prices fluctuate. All within ONE market, that has ONE CURRENCY. The prices still fluctuate. HAVING ONE CURRENCY HAS NOT STOPPED PRICES FROM FLUCTUATING WITHIN THE USA. I use all caps to make sure that you get the point, since simply pointing out this little thing called "the real world" doesn't seem to make a dent in your little dogma. Prices fluctuate within a single currency. Prices fluctuate across the Euro-zone. Prices fluctuate across the USA. Prices fluctuate. Having a single currency DOES NOT CAUSE PRICES TO FLUCTUATE.

          WITHIN THE USA, WHICH HAS A SINGLE CURRENCY, PRICES STILL FLUCTUATE WITHOUT FOREX BEING INVOLVED AT ALL.

          What planet are you from, and how long have you been living on Earth, because anyone who has lived on this planet for more than a week should already know that prices can fluctuate within a single country without any influence from forex.
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    Aug 7 2013: George,
    I am not an expert on the Greek situation, but I don't believe that their problem was a result of the Euro. I would compare Greece to Detroit in the United States. It was not the currency that led to their woes. A shared currency will not solve bad economic policy.
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    Aug 7 2013: Currency manipulation is one of the reasons that I believe having a standard system is necessary. If we are all working on one currency I don't believe that a country will be able to impact the currency across nations. Perhaps since a complete 100% adoption is not likely, there still can be manipulation between the countries that share the standard system and the countries that don't adopt or participate.
    • Aug 8 2013: The Euro can be manipulated by member nations. They just have to use more finesse.
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    Aug 6 2013: Hi Edward,

    I agree and my point is not really to address the subjective or perceived value of things. I merely addressed it since some of the audience had mentioned this as an obstacle. My goal in addressing it was to your point that it is not relevant. Whether it's bitcoin, points or some other standard I believe that the market will develop such a currency model. Over time consumers will use the currency from their territory to buy these points, bitcoin, or whatever model is introduced. And eventually it is possible that all citizens (that have an internet connection) will have the majority of their money on this currency model.
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    Aug 6 2013: Isn't all monetary value subjective? Some sentimental detail from my past makes me willing to pay $300 for an old comic book which has a Blue Book value of $6. That comic book now has a value of $300. Even the Blue Book goes out the window when the true determinant of value- emotional subjectivity- comes into play. A single, global currency would exist apart from subjective, perceived value. Without a global government there can be no global currency. The Federal Reserve is moving us quickly toward just such an arrangement. EVERYBODY PANIC!!
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    Aug 6 2013: I'd like to see something independent of governments and corporations.
    something of actual value.

    I wonder how the bitcoin can be manipulated. Can it be devalued or manipulated?

    The euro is a good example because within the EU, no government can step in and devalue it. like they can't set an exchange rate between french euros and german euros. Regional fluctuations are there just because the price of goods vary.

    Am I right? can governments manipulate it in some other way? (within the EU I mean)
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      Aug 6 2013: I share an equal concern about Bitcoin. I am merely referencing it as an example of what may evolve in the future. It is rare that the first iteration of a new innovation will set the standard. I think that over time there will be other attempts to create a standard for exchange and digital currency.
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        Aug 7 2013: Right, I got it that Bitcoin is just an example. It's a good example, just like the euro. What I understand is that you're talking about the evolution of money and what comes next.

        I do support having a global currency, but I'm afraid my economic knowledge is very very little. I know thattt governments can manipulate currencies against other currencies. Like china did. I know they can deliberately set exchange values independent of the market. My question is, am I right in saying that they can't do that if there is a global currency?
  • Aug 6 2013: one thought How does citing the Euro help your argument?
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      Aug 6 2013: Hi George,

      My thought is for the globalization of currency which would require an agreement among nations. This is why the example of using the Euro supports my argument. Although I do mention Bitcoin, I am not suggesting that Bitcoin in itself become the global currency. The problem with Bitcoin is that it is only another form of currency. And it is traded more like a commodity or stock than an actual currency.
      • Aug 7 2013: I may be on a different track, but Greece and other countries have had real problems due to the participation in the euro. I am not in complete understanding that's the beauty of these conversations. The euro has been a disaster for some countries and people. How would this idea work better?
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    Aug 6 2013: Edward, There has been much talk about this. First I concur with Pat below. Second as you mention the Euro this was was a great experiment in this area. The problem will always be how to reconcile the economies. The value in the US will not be the same in a third world country. One Euro in Germany will buy less than if spent in Greece. Step one would appear to be stabilizing the world economies in order to have a single currency.

    The banks of the world have already lined up against the bit coin. It is a direct threat to their power.

    Wish I was smarter in this area ... I ain't.

    Be well. Bob.
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      Aug 6 2013: Bob,
      I agree the buying power will vary by region. The same can be said for any currency. Even in the United States you can buy a much bigger home with $300,000 in Arizona than you ever could in New York City. The cost of goods, services and real estate will still vary regionally even within a country. So the value would be consistent, the buying power will vary based on supply and demand. There are benefits between nations and companies to use such a standard currency system as there will not be issues with fluctuations in currency while conducting trade.

      I do agree that the ones that have the most to lose from this are the banks. They benefit in the transaction fees in exchanging currency. But there are opportunities for them as well, by making it easier for a bank to expand its reach into other countries, especially the smaller banks.