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New global currency on the way?

Discussion in 'Off-Topic' started by RedRalph, Mar 26, 2009.

  1. JerichoHill

    JerichoHill Bedrock of Knowledge

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    Is the optimal monetary policy for country A going to be exactly the same as country B? Country A may benefit from a more loose monetary policy while Country B would like a stricter monetary policy. They will not be equal unless they're exactly the same. Just think through the implications of a BASIC trade model for a moment. That's why the Euro is so contentious at times.

    Note that : "In order to participate in the currency, member states are meant to meet strict criteria such as a budget deficit of less than three per cent of their GDP, a debt ratio of less than sixty per cent of GDP, low inflation, and interest rates close to the EU average."

    Not every country in the world can meet those criteria.

    Money is already pretty mobile.

    For a brief reading on why you won't have a global currency:

    http://en.wikipedia.org/wiki/Optimum_currency_area

    (The guy who thought that up was one of the guys behind the Euro)
     
  2. Mise

    Mise isle of lucy

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    It makes sense that China would want to put different eggs into its basket. If you fill your basket with only one type of egg, and those eggs turn out to be bad eggs, then you're left with a basketful of bad eggs. If, OTOH, you pick lots of different kinds of eggs, from lots of different hens, you'll have a much better, safer, more effective basket of eggs. Wait, how does that saying go again? :p

    I also don't understand how this in any way amounts to a "new global currency". It's just a diversification of reserves away from one purely denominated in dollars.
     
  3. Camikaze

    Camikaze Administrator Administrator

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    I was more thinking of a global currency with the retention of individual monetary policies, not a singular central one. But I suppose that would cause all sorts of valuation problems.

    Well, Australia wouldn't get in.
     
  4. plarq

    plarq Crazy forever

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    You cannot hedge the systematic risk of all money goes rot in the long run.

    Invest, not save, is the solution.
     
  5. Winner

    Winner Diverse in Unity

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    Half of current Eurozone members wouldn't either :lol:
     
  6. Phlegmak

    Phlegmak Deity

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    Because if it's bad for the US, then you like it. I was willing to give you the benefit of the doubt in the past, but that Raptor crashing thread convinced me that yep, you're just antiAmerican.
     
  7. RedRalph

    RedRalph Deity

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    Really? My American step-father would be astounded to hear that... my house is full of American music, games, etc etc... I have several Americans on my mates list here... most of the authors of books I read are American...

    but dont let that fool you. Incidentally, I'll be watching form now on to see if anyone ever is anyhting less than horrified at any foreign military failure, i.e. if the next Russian Bulava test fails and you are glad about it, you are just AntiRussian.
     
  8. Phlegmak

    Phlegmak Deity

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    I don't have a history of wishing ill on Russia. :shake:

    Ok, so I'll change my statement to you being anti-US-government. AND, you have not yet addressed your obvious hypocrisy of being glad for "hubris overturned" and then ignoring the fact that the Soviet Union lost in Afghanistan and all the other things I mentioned.
     
  9. RedRalph

    RedRalph Deity

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    I wish America all the best, believe me.
     
  10. bigfatron

    bigfatron Emperor

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    It's not a joke.

    Currency baskets already exist, such as SDRs, and both can be and are exchanged electronically all the time.

    Just because there is not a physical buck at the the end of the chain matters not a bit in the modern electronic market, as long as the basket is exchangeable into the constituent currencies at the relevant central bank, in this case the World Bank.

    In terms of economics, the US has enjoyed a long-term economic advantage by virtue of the USD's position as reserve currency; this advantage would be shared across the countries making up the basket, benefitting - to a small but useful degree - the euro-zone economies, UK and Japan, at the expense of the US.

    Works for me then...

    BFR
     
  11. amadeus

    amadeus As seen on OT

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    Unless you're in aerospace engineering, I guess. :rolleyes:
     
  12. RedRalph

    RedRalph Deity

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    I dont think its the best thing for America to continue to spend so much on the military and try and outcompete the rest of the world in arms.
     
  13. Cutlass

    Cutlass The Man Who Wasn't There.

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    The thing is, a currency basket can be useful in some cases. But the value of the currencies is still going to be fluid with relations to one another. So while it can be used to smooth over some international transactions, it does not actually function as a single currency would. Every nation still pursues its own monetary and fiscal policies, without regard to any agreement with other nations. So currency values are constantly adjusting.

    The Euro is the great experiment in doing it otherwise. And when faced with a crisis, the Euro doesn't look as pretty as it used to. We'll have to wait for the crisis to pass before we can take any real lessons away from that, but it would not surprise me if there is a lot of call for some changes in that program.
     
  14. Ondskan

    Ondskan Emperor

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    You know what amazes me?

    No that there's a global currency being pushed for. But that we - the people - who in theory OWN the politicians are supposed to debate things after the politicians decide them for us!


    Damn bastards.
    Politicians and huge Corps already have their global unions in the form of various political "discussion groups"(CFR, IMF, UN) and corps have RIAA, ESAA etc...

    Time for us to unite and fight them on the same scale. We have what they lack, diversity. United in our struggle for independency enables us to fight in a way they no longer can. They have become complete hive minds, unable to do anything independently as they risk getting kicked out from their organisations. We can. :goodjob:
     
  15. Bill3000

    Bill3000 OOOH NOOOOOOO! Supporter

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    We are?

    Isn't that why we elect public officials in the first place, to debate (while we vote for people who match our views) and vote on policy?
     
  16. Ondskan

    Ondskan Emperor

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    A government by the people for the people.
    A real democracy (representative or not) is that in which the people put the issues on the table through debates, demonstrations, inquiries and so forth.
    Then the politicians see these things and depending on which ideology the peoples representatives have take action in accordance to that ideology or that political view and attempt to attend the concernes of the people.

    Anything ellse is an illusion of democracy.
    It should be obvious to any intelligent person that the politician should not introduce drastic policy without there being a popular demand for that policy. If this is allowed then it does not matter who we choose as we will be catering to their ideas and not them to ours.
     
  17. devilhunterred

    devilhunterred Prince

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    Real democracy is awfully dangerous for a country.

    The harsh truth is the majority of the population can never educate themselves in politics, economics, social issues and national affairs well enough to make a wise decision.
     
  18. Bill3000

    Bill3000 OOOH NOOOOOOO! Supporter

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    Good thing that we're a liberal democracy then, not a democracy.
     
  19. Integral

    Integral Can't you hear it?

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    Maintaining a global currency while retaining country-specific monetary policy is rather difficult (= nigh-impossible) in the face of open capital flows. Here's a good primer on why that is the case.
     
  20. Cheezy the Wiz

    Cheezy the Wiz Socialist In A Hurry

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    Of course they can. But it is in the ruling classes' best interests not to allow them to.
     

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