Letters: A single global currency: Why not?

Wed, 06/24/2009 11:36 AM  |  Reader's Forum

The next major realignment of the world's major currencies should be to a common currency managed by a monetary union central bank. When such a currency supports countries with 40-50 percent of the world's GDP, that currency will become the de facto single global currency, and the "tipping point" momentum will favor its continued growth, until it supports all the countries of the world.

Thus will come the single global currency managed by a global central bank within a global monetary union, and the benefits could be measured in the trillions, annually. Such a single global currency will provide what the people of the world want - stable money.

The primary problem for the Euro and every regional monetary union today is that they still exist in the multi-currency world, where the value of the currency will fluctuate against other currencies. If 16 countries can use the same currency, why not the 192 UN members? Those 192 countries now use 141 currencies and the number is dropping annually.

The Euro is definitely a harbinger of the future, and soon all 25 EU members will be part of the European Monetary Union, and by then, there will be more EU members to add. Several of the remaining non-Euro EU members are now seeking admission as soon as possible. The IMF has even urged several EU members to "Euroize" even before completing the standard accession process.

In addition to eliminating currency fluctuations, the use of a single global currency would eliminate the current foreign exchange trading expense of US$400 billion annually (a small percentage of the $3.8 trillion traded daily); eliminate currency risk; eliminate current account imbalances; eliminate the need for foreign exchange reserves (now totaling more than $6 trillion); and bring other benefits worth trillions, such as reducing the impact of global financial turmoil such as we are now experiencing.

The Single Global Currency Association (www.singleglobalcurrency.org) promotes the implementation of a single global currency by 2024, the 80th anniversary of the 1944 conference. That's only 15 years away. The world is moving toward a single global currency through the creation, expansion and merger of regional monetary unions.

Another route is through international monetary conferences proposals and agreements, such as were seen at Bretton Woods. The merger of the Eurozone with one or two other currencies is one possible route to a single global currency. The challenge now is to reach that goal deliberately, as soon as possible, with as little cost and as few crises as possible. If the Eurozone were to merge with the US dollar or the yen, or if the yen and the US dollar were to form a monetary union, the road to a single global currency would be clear.

Morrison Bonpasse
Newcastle, Maine, United States

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