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The success of the euro has shown the world the value of modern monetary unions and
the world should move as soon as possible to a Single Global Currency managed by a
Global Central Bank within a Global Monetary Union (a "3-G" world) See
www.singleglobalcurrency.org.
There are many benefits to a Single Global Currency, in addition to those described in the
note "United States Dollar and the Euro",
* Annual foreign exchange transaction costs of $400 billion will be eliminated.
* Worldwide asset values will increase by about $36 trillion.
* Worldwide GDP will increase by about $9 trillion.
* Currency crises will be prevented.
* Currency speculation will be eliminated.
* Worldwide interest rates will be reduced due to the elimination of currency risk.
* Worldwide inflation will be reduced as currency exchange rates will no longer be a
cause.
* The need for foreign exchange reserves, now over $4 trillion, will be eliminated, and
these funds can be used for more productive purposes than maintaining an inefficient
foreign exchange system.
For more information, see the website, www.singleglobalcurrency.org, and/or the book,
"The Single Global Currency - Common Cents for the World."
The Single Global Currency may be backed by a type of reserve, such as gold or silver
or other commodity or may be an entirely "fiat" currency backed by the trust in the
Global Central Bank. The decision on a type of reserve, if any, can be made upon the
establishment of the Global Central Bank and the Single Global Currency.
The people of the 192 U.N. members now need only 146 currencies to transact all their
business, including the payment of taxes. They are all "fiat" currencies. By next January
the number of currencies will drop to 144 with the movement of Cyprus and Malta to the
euro. Why not plan and research now for an accelerated movement to a single global
currency? We are only as far away now from the Single Global Currency as Europe was
from the euro in the 1980's. The Single Global Currency is within our practical grasp.
How to get there from here? It can be through a combination of processes: ization
(whether euroization or dollarization) and the expansion and creation of monetary unions.
Also, the IMF or Bank for International Settlements could establish an international
"central" reserve bank for countries that wish to have a stable currency based on an
aggregate of current international currencies. At some point in this transition, there
should be convened a number of international monetary conferences, as was done in 1944
at Bretton Woods, N.H., to firmly establish the global monetary union.
The goal of the Single Global Currency Assn. is to move the world to a Single Global
Currency by the year 2024, the 80th anniversary of the 1944 Bretton Woods Conference.
It's common sense to move toward common cents.
United States dollar and the euro
Comparison of worldwide use of the U.S. dollar and the euro
Since the mid-20th century, the de facto world currency has been the
United States dollar. According to Robert Gilpin in Global Political
Economy: Understanding the International Economic Order (2001):
"Somewhere between 40 and 60 percent of international financial
transactions are denominated in dollars. For decades the dollar has
also been the world's principle reserve currency; in 1996, the dollar
accounted for approximately two-thirds of the world's foreign
exchange reserves" (255).
Many of the world's currencies are pegged against the dollar. Some
countries, such as Ecuador, El Salvador, and Panama, have gone even
further and eliminated their own currency in favor of the United States
dollar.
Since 1999, the dollar's dominance has begun to be undermined by
the euro, that represents an equivalent size economy, with the
prospect of more countries adopting the euro as their national
currency. Quite a few of the world's currencies are pegged against the
euro. They are usually Eastern European currencies like the Estonian
kroon and the Bulgarian lev, plus several north African currencies like
the Cape Verdean escudo and the CFA franc.
As of December 2006, the euro surpassed the dollar in the combined
value of cash in circulation. The value of euro notes in circulation has
risen to more than €610 billion, equivalent to US$800 billion at the
exchange rates at this time.[1]
[edit] History
Spanish Dollar: 17th-19th centuries
In the 16th and 17th century, the use of silver Spanish dollars or
"pieces of eight" spread from the Spanish territories in the Americas
eastwards to Asia and westwards to Europe forming the first ever
[citation needed] worldwide currency. Spain's political supremacy on
the world stage, as well as the coin's quality and purity of silver, made
it become internationally accepted for over two centuries. It was legal
tender in Spain's Pacific territories of Philippines, Micronesia, Guam
and the Caroline Islands and later in China and other Southeast Asian
countries until the mid 19th century. In the Americas it was legal
tender in all of South and Central America (except Brazil) as well as in
the U.S. and Canada until the mid-19th century. In Europe the
Spanish dollar was legal tender in the Iberian Peninsula, in most of
Italy including: Milan, the Kingdom of Naples, Sicily and Sardinia, as
well as in the Franche-Comté (France), and in the Spanish
Netherlands. It was also used in other European states including the
Austrian Hapsburg territories.
19th - 20th centuries
Prior to and during most of the 1800s international trade was
denominated in terms of currencies that represented weights of gold.
Most national currencies at the time were in essence merely different
ways of measuring gold weights (much as the yard and the metre both
measure length and are related by a constant conversion factor).
Hence some assert that gold was the world's first global currency. The
emerging collapse of the international gold standard around the time
of World War I had significant implications for global trade.
In the period following the Bretton Woods Conference of 1944,
exchange rates around the world were pegged against the United
States dollar, which could be exchanged for a fixed amount of gold.
This reinforced the dominance of the US dollar a global currency.
Since the collapse of the fixed exchange rate regime and the gold
standard and the institution of floating exchange rates following the
Smithsonian Agreement in 1971, currencies around the world have no
longer been pegged against the United States dollar. However, as the
United States remained the world's preeminent economic superpower,
most international transactions continued to be conducted with the
United States dollar, it has remained the de facto world currency.
Only two serious challengers to the status of the United States dollar
as a world currency have arisen. During the 1980s, for a while, the
Japanese yen became increasingly used as an international currency,
but that usage diminished with the Japanese recession in the 1990s.
More recently, the euro has competed with the United States dollar in
usage in international finance.
Hypothetical single "true" global currency
An alternative definition of a world or global currency refers to a
hypothetical single global currency, as the proposed Terra, produced
and supported by a central bank which is used for all transactions
around the world, regardless of the nationality of the entities
(individuals, corporations, governments, or other organisations)
involved in the transaction. No such official currency currently exists
for a variety of reasons, political and economic.
There are many different variations of the idea, including a possibility
that it would be administered by a global central bank or that it would
be on the gold standard [1]. Supporters often point to the euro as an
example of a supranational currency successfully implemented by a
union of nations with disparate languages, cultures, and economies.
Alternatively, digital gold currency can be viewed as an example of
how global currency can be implemented without achieving national
government consensus.
Arguments for a global currency
Some of the benefits cited by advocates of a global currency are that it
would:
Eliminate the direct and indirect transaction costs of trading from one
currency to another[2].
Eliminate the balance of payments/current account problems of all
countries.
Eliminate the risk of currency failure and currency risk.
Eliminate the uncertainty of changes in value due to exchange-caused
fluctuations in currency value and the costs of hedging to protect
against such fluctuations.
Cause an increase in the value of assets for those countries currently
afflicted with significant country risk.
Eliminate the misalignment of currencies.
Utilize the seigniorage benefit and control of printing money for the
operations of the global central bank and for public benefit.
Eliminate the need for countries or monetary unions to maintain
international reserves of other currencies.
Arguments against a single global currency
Many economists[Please name specific person or group] argue that a
single global currency is unworkable given the vastly different national
political and economic systems in existence.
Loss of national monetary policy
With one currency, there can only be one interest rate. This results in
rendering each present currency area unable to choose the interest
rate which suits its economy best. If, for example, the United States
were to have an economic boom while the European Union slumped
into a depression, this period would be eased if each could choose the
interest rate which best fitted its needs (in this case, a relatively high
interest rate in the former, and a relatively low one in the latter).
Political difficulties
In the present world, nations are not yet able to work together closely
enough to be able to produce and support a common currency. There
has to be a high level of trust between different countries before a true
world currency could be created. Critics argue that a world currency
would undermine national sovereignty.
A currency needs an interest rate, while one of the largest religions in
the world, Islam, is against the idea of interest rate. This might prove
to be an unsolvable problem for a world currency, if religious views
concerning interest do not moderate. It is not, however, necessary for
a Muslim user of such a banking system to either receive or pay
interest, in much the same way that Muslims avoid the problem under
the current system in the modern non-Islamic world (for example,
through using Islamic finance). Although the central bank must set an
interest rate, there is no compulsion for individual banks to do so, it is
simply accepted practice in the West.
Economical difficulties
Some economists argue that a single world currency is unnecessary,
because the U.S. dollar already provides many of the benefits of a
world currency while avoiding some of the costs [3].
If the world does not form an optimum currency area, then it would be
economically inefficient for the world to share one currency.
A world currency would not allow for adjustments by national central
banks to accommodate local economic problems. A single currency can
only have a single interest rate. However, different regions in the
world, with varying rates of economic growth, may require different
interest rates.
As an example, consider a hypothetical Country A that is a petroleum
exporter and a hypothetical Country B that is an oil importer. If the
price of oil goes up, this is an advantage for Country A, and a
disadvantage for Country B. If the oil price goes up, this stimulates the
economy of Country A; to avoid "overheating" the economy, Country
A's central bank would support increasing the interest rate of Country
A. At the same time, Country B's economy is damaged by the
increased price of oil, and Country B's central bank would seek to
lower the interest rate in order to stimulate the economy. However,
Country A and Country B would be unable to do this if they shared the
same currency.
Posted by hereyou at 10:08 AM
-- -- -- -- -- - -- The success of the euro has shown the world the value of modern monetary unions and
the world should move as soon as possible to a Single Global Currency managed by a
Global Central Bank within a Global Monetary Union (a "3-G" world) See
www.singleglobalcurrency.org.
There are many benefits to a Single Global Currency, in addition to those described in the
note "United States Dollar and the Euro",
* Annual foreign exchange transaction costs of $400 billion will be eliminated.
* Worldwide asset values will increase by about $36 trillion.
* Worldwide GDP will increase by about $9 trillion.
* Currency crises will be prevented.
* Currency speculation will be eliminated.
* Worldwide interest rates will be reduced due to the elimination of currency risk.
* Worldwide inflation will be reduced as currency exchange rates will no longer be a
cause.
* The need for foreign exchange reserves, now over $4 trillion, will be eliminated, and
these funds can be used for more productive purposes than maintaining an inefficient
foreign exchange system.
For more information, see the website, www.singleglobalcurrency.org, and/or the book,
"The Single Global Currency - Common Cents for the World."
The Single Global Currency may be backed by a type of reserve, such as gold or silver
or other commodity or may be an entirely "fiat" currency backed by the trust in the
Global Central Bank. The decision on a type of reserve, if any, can be made upon the
establishment of the Global Central Bank and the Single Global Currency.
The people of the 192 U.N. members now need only 146 currencies to transact all their
business, including the payment of taxes. They are all "fiat" currencies. By next January
the number of currencies will drop to 144 with the movement of Cyprus and Malta to the
euro. Why not plan and research now for an accelerated movement to a single global
currency? We are only as far away now from the Single Global Currency as Europe was
from the euro in the 1980's. The Single Global Currency is within our practical grasp.
How to get there from here? It can be through a combination of processes: ization
(whether euroization or dollarization) and the expansion and creation of monetary unions.
Also, the IMF or Bank for International Settlements could establish an international
"central" reserve bank for countries that wish to have a stable currency based on an
aggregate of current international currencies. At some point in this transition, there
should be convened a number of international monetary conferences, as was done in 1944
at Bretton Woods, N.H., to firmly establish the global monetary union.
The goal of the Single Global Currency Assn. is to move the world to a Single Global
Currency by the year 2024, the 80th anniversary of the 1944 Bretton Woods Conference.
It's common sense to move toward common cents.