by John Talleos

Created on: April 04, 2009

One world single currency has a nice ring to it. It's has though the world were one country with one identity. This is the attraction to single currency, in that we are all closer together through cash. There are so many problems with this idea but the main one is sovereignty. In the US the amount of currency in the system is set by the federal reserve and they gauge by looking at prices of commodities and metals and if there is inflation/deflation they will set interest rates accordingly. The federal reserve chairman is a political appointee and he sits on a board who are also the same. Whenever there is an opening on the board replacements are made and from those replacement we know what we're going to get. In some political philosophies there are those who feel some loose money is good (and there are reasons for this) and there are others that believe tight monetary policy is better in the long run. The main thing here is the federal reserve is under control of the US government which is controlled by the people. If the exchange rates are made by an international body we have little control over their principles. They may feel that the market needs to be flooded with cash because there are poorer countries that have high deflation and will simple allow wealthier countries live with a devalued currency as a "sacrifice" until the deflation is fixed elsewhere. Regardless if this is a good idea or not the point is its not a decision we have any control over. This is a realistic scenario.

The problem with economics is that there are two sides, one which believes that bureaucrats and government could make all the difference in peoples lives and the other which has greater faith in people. The world is filled with the bureaucrat/government end of the argument and could use monetary policy towards that end. Its not so much of a problem within a country that is allowed to choose which side but when choice is made for us and money is used as a weapon towards whichever end then this is the first step towards the end of democracy. People have to determine their destiny not international bodies. Monetary policy is one of the tools where the people have a say in the outcome of their lives.

The movement towards one currency, more times then not, will arise from a faction of politics that sees nothing especially exceptional about America. What one has to do with the other is that the US dollar is the de-facto world currency because of its stability in value and the US economy as a whole. One currency is just a by-word for replacing the dollar. Abroad this takes on a more virulent anti-American connotation. Currently those who advocate this are China, Iran, Venezuela, you get the picture.

One currency is an idea more of fantasy and ideology. In the details it is an international mess and at home a giving up of how we choose to live our lives. This is so apparent that it would never be seriously considered.

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