Letter: Millionaires and U.S. dollar weakening

Wed, 06/18/2008 10:44 AM  |  Reader's Forum

Day after day we watch and read about millionaires, actor millionaires, singer millionaires, heiress millionaires and others. Every day the number of millionaires in the world is rising with incredible speed.

This millionaire phenomenon has become very important in global society; in fact, sometimes millionaires and billionaires are front page news before domestic or global issues. By comparison, large numbers of companies, newspapers and TV stations are conducting detailed research into the value of their assets but do not get the same attention as millionaires.

There is no definition or internationally recognized basis for the U.S. dollar being the currency for identifying (or counting) the wealth of the world or individuals. Yes, the dollar has been the de facto world currency since the 20th century, and as of 2007 the dollar still dominates at 63.3 percent of foreign reserve holdings while the euro has 26.5 percent.

However since the year 2000, the dollar share has been falling and the euro share has been rising. As of December 2006, the euro surpassed the dollar in the combined value of cash in circulation. One million dollars exchanged in other currencies does not always make millionaires.

On the other hand, the UK pound and the euro are hard currencies. They are reserve currencies, and currencies with a good buying power which are widely accepted as a reliable store of value. But we don't see them as a basis for counting world wealth.

The dollar is not the strongest currency unit, especially not now; even the Cuban convertible peso and the Azerbaijan manat are stronger than the dollar. Therefore, using the dollar as the currency unit or as a basis for identifying millionaires is giving the wrong picture of who is a millionaire in the world.

Consequently, what should be the definition of a millionaire? Perhaps a millionaire is an individual whose net worth of wealth exceeds a sufficient amount of units of any currency worth one million units of the world's highest valued currency, or the world's highest anchor currency.

It can also be a person who owns enough units of any currency when exchanged worth 1 million units of the world's highest valued currency unit in cash, bank accounts and savings.

If one person has enough currency to buy one million of the world's highest valued currency, or the worlds highest anchor currency, that person should be counted as a millionaire.

IVAN SIMIC
Belgrade, Serbia

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