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For several decades during he previous century, the world did have a single currency, it was the U.S. dollar. Many countries pegged the value of their money to the American dollar. The value of currencies often were compared extensively to the American dollar. Stories of places like Iran and North Korea going to great lengths to bolster their balance of trade by, allegedly, forging hundred-dollar bills. Then there was the discovery that Saddam had horded a personal store of over a billion U.S. dollars on one of his palace grounds was interesting.

The people that did the most to break the dollar as the world currency was the European Union. Anti-Americanist sentiments bid up the Euro for currency speculators on political grounds, while shoddy political mismanagement of fiscal responsibilities in the United States added fuel to the Euro's fire.

The problem is, however, that the economic conditions of the European Union, in the composite value which should support the price differential in relation to the American dollar are over-valued. It is quite likely that sometime not too very far away, there will be an end to the exuberance of the Euro support. China, meanwhile, cannot sustain the rate of growth that they have experienced. Since China has not divorced itself (yet) from the American dollar, they will have lost the opportunity to dilute the international dollar standard, before the dollar recovers.

The dollar will recover its dominance in world trade, although not in the next few years. Several things will have to shake out first. Once the urgency of political posturing grows old, then the comparative stability and safety of the American economy will again come into favor. Somewhere about that time, some bright bulb in the United Nations will once more think that America cannot be permitted to continue their world currency dominance. That is when a proposal for averaging currency values and replacing the member's national currencies with a world dollar. The hushed secret, meanwhile, is that the U.S. dollar will be the primary support.

What will sink the revamped proposal is the same thing that always has. Even poor countries, with pathetic economic value, will feel as ashamed, if not more so, to adopt a world currency as they are to use the U.S. dollar. Politics will kill the world credit/euro/dollar/whatever. Once again, after the flap is over, the U.S. dollar will again be the global currency, a central store or standard of value.

Learn more about this author, Larry Swinford.
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