Archive for economics

Global Currency?

Posted in Miscellaneous with tags , , , on July 28, 2008 by coryangennet

The world, whether we like it or not, revolves around money. Take a look at the underdeveloped countries and the developed ones. The major difference is usually living conditions, which inevitably circle back to money. So the question arises: “Why not have a single global unit of currency?” I’ve had the thought before but, as humorously as it seems, Stephen Colbert’s show from last Thursday caught my attention. He talked about the US joining the EU, which is quite a bit different than what I’m talking about now. However, it does pose an interesting debate. So that being said, and before I get into my details, I want you all to know that this has been brewing in my mind for only a few hours now. In other words, I’m not an economical or political or any kind of expert. This is just a simple citizen’s perspective and findings on the matter.

So let’s start with the Pros:
First of all, there are roughly 190 different currencies in the world. Simplifying that down to one create far less of a hassle.
There would be no real national currency crisis. Our (the US) economy is in the shitter. There’s no way around that anymore. A Global Currency that is mandated to keep inflation low would boost our economy as well as keep it somewhat stable in the future.

Now the Cons:
If, for some reason, there was an economic slump in one specific country, that country could not use their monetary system to adjust for it.
Also, I’m sure there would be significant protests from some American (any maybe other) citizens that wouldn’t want to trade the dollar, the dollar that they’ve used their entire life, for something new. Another problem would be how it would be governed. How would it work? What would effect these prices?

Obviously there would be some things that would need to be known internationally for this to work, but systems like this have been popping up all over the world in recent years. Most notably is the Euro. But there are other places doing this too. The Caribbean Community (most of the islands in the Caribbean along with some South American countries), the East African Community (Burundi, Kenya, Rwanda, Tanzania, Uganda), West African Monetary Zone (Gambia, Ghana, Guinea, Nigeria, Sierra Leone, possibly Liberia), and ASEAN +3 (Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, Vietnam, People’s Republic of China, Japan and South Korea) all have a proposed currency. There are even talks of Mexico, the US and Canada to share a similar currency. These would be a great way to get the world started on something that could be an eventual possibility.

So what are your thoughts? I’m sure you’ve thought about it before, and if not, well here you go. If you have any other knowledge on the matter, or just simply want to state your opinion on it, please comment.

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Sources:
Are you ready for a global currency? by David R. Francis (a bit outdated, but the basis for most of my info)
‘Currency’ Wikipedia article
‘United States dollar’ Wikipedia article
‘Euro’ Wikipedia article