Home > currency, economics, globalism > >Are we moving toward a global currency?

>Are we moving toward a global currency?

> There seems to have been a recent spate of articles discussing advocates of a global currency. This concept has been discussed for decades, if not longer.

The president of Kazakhstan Nursultan Nazarbayev recently outlined a proposal for a world currency. His “acme-capital” has been endorsed by Robert Mundell who was behind the euro. There may be some sense to this if the acmetal is actually backed by, or better, made with, a precious metal.

A United Nations advisory committee has recommended international monetary reserves be changed to a system not dependant on US dollars. China had previously made a similar request as has Russia. The proposal is to use something similar to the previous

European currency unit [Ecu], that was a hard-traded, weighted basket.

…The SDR [Special Drawing Right] and the old Ecu are essentially combinations of currencies, weighted to a constituent’s economic clout, which can be valued against other currencies and indeed against those inside the basket.

Russia suggests that at least part of the weighting be gold.

Granted, all these articles are somewhat related to the UN report. There may be some real concerns about the US dollar, though it is likely the UN will use any excuse to internationalise and seek increased control over national sovereignty. This may be especially true if control over money transfer allows opportunities for the UN to increase the size of its own coffers.

Personally I think any commodity should be traded in any currency by agreement on the 2 parties.

I wonder whether there would be less complaints that

the current system contributes to global instability, it contributes to the insufficiency of global aggregate demand

if the reserves were held in commodities rather than promissory notes from people with inadequate integrity.

Categories: currency, economics, globalism
  1. 2009 April 3 at 05:32

    I wonder if the UN is even in a place where it could really propose such an arrangement. As a federalist, I tend to get really worried about centralized power, and nothing does that more than money. The idea of a global currency is not really that appealing to me. If the entire world goes under one currency than if something were to happen to it, then the entire world would collapse, much like what is happening now. It is not wise.

  2. 2009 April 3 at 09:27

    I have just been reading Adam Smith’s book on The Wealth of Nations and he goes into a bit of the history of money and minting and some of the issues with having money made out of different metals, then the watering down of the coin (ie reducing the precious metal content)
    Using real precious metal in a worldwide coin would have the instant effect of making that metal worth more (since you would need an absolute truckload of the coin for the whole world). Of course for large transactions you would then have to have notes backed by the metal and then how do you really know the metal is where it should be etc…
    In my reading of Adam Smith I see money as a good thing, the issue is what level of confidence can people have on the ongoing value of any currency… people in the US may have been shaken recently but that is nothing compared to those in Zimbabwe!!

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