5 January 2014 Article “Global governance should recognise global citizenship” supports Single Global Currency. Article by R. Seetharaman, CEO of the Doha Bank Group, in the Gulf Times.
Excerpt from the article…
A single world will have a single global currency. The single global currency
would be managed by a single global central bank, with representative governing
boards for the people, governments and financial institutions of the world.
The Global Central Bank will be financed by benefits, which come from the printing of money and seigniorage. Any surplus monetary benefits coming to the bank would be allocated to the agreed-upon goals. The conditions based on which the countries will participate and the goals to be achieved should be agreed to develop a single global currency.
1 January 2014. “Latvia becomes 18th state to join the eurozone “ (from the BBC).
The article begins...
Latvia has begun the new year by joining the eurozone, becoming the 18th member of the group of EU states which uses the euro as its currency. The former Soviet republic on the Baltic Sea recently emerged from the financial crisis to become the EU’s fastest-growing economy….
8 December 2013. Barry Eichengreen gives support to development of Australia/New Zealand monetary union. See Business Week/Bloomberg article, “Australia-N.Z. Currency Union Worth Examining, Eichengreen Says“
The article begins...
Australia and New Zealand could consider a common currency to address concern their exchange rates are overvalued, said U.S. economics professor Barry Eichengreen.
2 December 2013. Burundi, Kenya, Rwanda, Tanzania and Uganda have signed a protocol to establish a monetary union within 10 years. See “East African trade bloc approves monetary union deal”
The article begins...
The leaders of five East African countries signed a protocol on Saturday laying the groundwork for a monetary union within 10 years that they expect will expand regional trade.
18 July 2013 African Union urges all-Africa Monetary Union. “Tanzania: Bank Chiefs Meet in Arusha Over African Monetary Union” from the Tanzania Daily News.
Excerpts from the article...
“The African Union (AU) heads of state have directed the continent’s central bank governors to start efforts in creating an African Monetary Union which should lead to the region’s single central bank as well as one currency,” explained Prof Benno Ndulu, the Bank of Tanzania (BOT) governor….
AACB intends to both study and harmonise monetary policies that must be put in place before an African Central Bank and a single currency can be created, with initial focus being sometime in 2020 or thereabout.
The move, according to the governor, would enable most African countries to trade freely and help to reduce the exchange rate-related losses incurred by most African traders.
The East African Community (EAC) headquartered at Arusha is so far the continent’s promising regional bloc, which brings together five economies of Tanzania, Kenya, Uganda, Rwanda and Burundi into one.
“We hope that the four African trading blocs of EAC, SADC, COMESA and ECOWAS will spearhead single currency efforts to make it easier for us to join the four monetary unions in forming a single currency than working on the more than 60 currencies being used on the continent,” the governors had pointed out.
3. Latvia given EU and EMU OK to adopt euro on January 1, 2014, pending further approvals. See New York Times article, “Latvia Is Endorsed to Adopt the Euro”.
The article begins...
FRANKFURT — The tiny Baltic nation of Latvia received official endorsement for membership in the euro currency union Wednesday, in a move that European leaders clearly hoped would demonstrate the endurance of the euro zone despite its dismal economic performance and damaged reputation.
[This is another step toward a Single Global Currency.]
10 December 2012. Theory Productions has produced a 13-minute video, “Single Global Currency” for its program,"One Hour Economy.”
The featured participants are: Kevin Landwehr, Tyler Kidwell, Andrea Eastes, Maddie Lockridge.
The project arose from the course WRD 111 (Writing, Rhetoric and Digital Media) at the University of Kentucky.
See EMAIL from Andrea Eastes about their project.
30 July 2012. "The World Needs a New Currency" by Robert Pringle, in the Christian Science Monitor.
Excerpt from the article...
….In my new book, “The Money Trap,” I propose that the global monetary unit – which I call the ikon – be expressed as a fraction of the global portfolio of all productive assets. The closest proxy for this is a diversified basket of global common stock (equity shares). Banks would compete with each other to produce money defined to these standards.
….The dollar and other national currencies would continue to circulate, but they would be linked by a silken thread, as they would have a common reference or benchmark. Gradually, this would become the new ‘gold standard’ – the modern, respectable, monetary standard for the 21st century….
[See Also Robert Pringle’s website: www.themoneytrap.com.]
25 July 2012 Erik Hare posted the blog, “Is the world ready for a global currency?” at the Minnesota “Blog Cabin.”
Excerpts from the article…
Imagine a single currency, all around the world. No more converting between Dollars and Euros and Pounds, the money in your wallet is your ticket to ride anywhere….
But we’re a global society now, with total worldwide trade taking up nearly $8T of the global product of $52T. Is it time for a new global currency that isn’t subject to the needs and politics of one nation? More and more, the answer is “yes”. But getting there, as with anything international, is the hard part….
12 February 2012 “The Case for a Global Currency – Would it make more sense to have one currency for the entire world?” by David Wolman in Salon.
Excerpts from the article.…
…On the one-world money front, there are scattered dreamers out there, outfits like the Single Global Currency Association, and supporters of something called the Terra TRC (for Trade Reference Currency). In the 1940s, the legendary John Maynard Keynes conceived of a supranational currency that he called the Bancor.
… Backers of a single Earth currency envision a great smoothing of transactions, an end to damaging currency speculation, and less economic turmoil, which could mean greater prosperity for all.
… One idea is for this new currency to be an expanded version of something that already exists: Special Drawing Rights. SDR is really a crossbreed of four of the world’s most signiﬁcant currencies, and it’s used for particular kinds of settlements at the IMF. Perhaps the SDR is the embryo of a new global currency….
[The article was adapted from David Wolman’s new book, The End of Money. from DaCapo Press, published on Feb. 14, 2012.]
23 January 2012 “Why the Euro Will Survive and Thrive” by John Maxfield at "The Motley Fool"
Excerpts from the article....
And Berkeley professor Barry Eichengreen postulated in his book Exorbitant Privilege that the euro will not only survive the crisis but thereafter thrive due to the world’s longing for a currency to rival the American dollar….
What this history demonstrates is that the European powers see the euro as more than a common currency. To them, it’s the price of peace. As a result, the union and its currency are likely much more resilient than modern-day political and financial pundits recognize…. In addition to the historical and political ties to the euro, fragmenting into individual currencies simply isn’t a palatable alternative. Today’s currency market is akin to a dark alley in an unfriendly neighborhood — it’s not somewhere you want to go alone. And the looming presence of an omnipotent dollar makes the situation even worse. …
If I were a betting man, I’d wager that the euro will not only emerge from the continent’s current economic woes intact, but that it will come out stronger, being backed by the fiscal authority of a more integrated union.
22 January 2012. “Can a Single Global Currency Work ?” by V. Kumar
The article concludes….
If you have doubts, take the example of something like paypal – suppose it manages the account in a basket of currencies, instead of US dollar, and gives it a name, and that currency basket becomes acceptable by financial institutions, it will become acceptable by international traders too – a situation not very different from single global currency.
The future of single global currency is definitely there, and that future is not too distant from today.
20 January 2012. “Russia Presidential Candidate Prokhorov Calls For Single Global Currency” By Ira Iosebashvili, Dow Jones Newswires
MOSCOW (Dow Jones)–Russian billionaire and presidential hopeful Mikhail Prokhorov Friday called for the creation of a single global currency based on the ruble and euro, one of a long list of demands that included deep cuts in the number of bureaucrats and privatization of state-owned television channels.
The demands were part of Prokhorov’s election program, which was published on Friday. Russian Prime Minister Vladimir is expected to handily win elections set for March 4, with the latest poll showing that he would collect more than 50% of the vote if elections were held Sunday.
27 December 2011. David Wolman writes in WIRED Magazine, “Dream of Universal Currency Just Won’t Die”
Excerpt from the article....
… Step back from the current crisis to consider the long view, and currency unions—or even a single global currency—have a fair share of appeal. A universal medium of exchange could eliminate currency risk and jack up trade. It would mean speculators couldn’t short an individual country’s currency. Exporters wouldn’t have to fret over the gap between a price on a contract and the value of the payment. A single currency could halt spastic swings in prices and end conversion fees, leaving more of the pie for little stuff like R&D and employee health insurance. Oh—and it could put an end to international disputes over currency manipulation. Hello? China?…
12 December 2011. “Nobel economist calls for global currency backed by dollar, euro, yuan” by Achara Deboonme in The Nation – Thailand.
The article begins…
Amid the global financial crisis, Nobel laureate Robert Mundell is calling for the creation of a world currency – anchored by the US dollar and euro with backing from the Chinese yuan – to restore stability to the Bretton Woods level.
He said this would help prevent huge exchange rate instabilities which prompted major debt and financial crises in recent decades.
Then the International Monetary Fund could truly serve as the world’s central bank, he said in a lecture hosted yesterday by the United Nations Economic and Social Commission for Asia and the Pacific (Unescap).
A lecture by the Nobel Economic Laureate on the topic “Global Currency: Dollar, Euro, Renminbi” was part of the ESCAP Distinguished Person Lecture Series.
[See also, “Single world currency ‘inevitable’ “ by Parista Yuthamanop in the Bangkok Post.]
13 November 2011. Single Global Currency is noted approvingly on blog, http://dravida-peravai.blogspot.com by SGCA member, Nandhi Varman. See specific article: “SINGLE GLOBAL COMMON CURRENCY – GLOBAL MARKET NEEDS COMMON CURRENCY”
Excerpt from the blog…
A Single Global currency acceptable to developed and developing countries will alone integrate the world economy.
2 June 2011 Article: “Will a Single Global Currency boost worlwide business” Interview by Ted di Stefano. in E-Commerce Times.
Excerpts from the article...
“In a world with a single global currency, managed by a Global Central Bank within a Global Monetary Union, there will be no foreign exchange and no multi-currency fluctuations, just as there are now no such fluctuations between Finland and France or between Maine and Michigan,” said Morrison Bonpasse, president of the Single Global Currency Association.
7 April 2011 Article: “Is the world headed toward a Single Global Currency?” Interview of Morrison Bonpasse, President of Single Global Currency Assn. by Ted di Stefano in E-Commerce Times.
Excerpts from the article...
"The world would implement a single global currency by expanding existing monetary unions, by folding them into a single global currency. The Single Global Currency can be said to exist when these currency consolidation trends create one currency for countries representing approximately 40-50 percent of the world’s GDP. After that, we will have passed a “tipping point,” and the remaining countries will clamor to join."
4 March 2011. Essay “The Uncertain Future: The World in 2111 (Part II) by Former Polish Deputy Prime Minister, Grzegorz Kolodko, excerpted in “The Globalist" from his book. Truth, Errors, and Lies: Politics and economics in a Volatile World.
Excerpt from the article.…
[In 2111]…The American currency will be the world’s third choice. The main reserve currency will be the yuan, which will also circulate in several other Asian and African countries. The euro will be in second place. Not only will it last out the century, but it will circulate in more than 50 countries in Europe, Asia and Africa.
The “global,” our world currency, will still be on the drawing board because the world economy won’t yet be rational enough for it. That day may never come, for the same reason that Esperanto never really caught on….
[Note by SGCA: Although currency can be said to be a language, there is no similarity between the fate of Esperanto and the Single Global Currency. The use of the euro across 17 countries and languages, shows that money "talks" beyond language.]
15 February 2011.“Why world needs three global currencies” by C. Fred Bergsten, in the Financial Times.
Excerpts from the Op-Ed. the title of which is valuable...
Many nations have long regarded the dominant international role of the dollar as bestowing an “exorbitant privilege” on the United States. But the privilege has now become a burden. It is time for the United States to anticipate, and begin to build, an era in which there will be several global currencies to rival its own…. The rise of China implies the renminbi will qualify for global currency status whenever it achieves full convertibility and sheds its protective capital controls. In short, the international monetary system is already becoming bipolar, and may soon be tripolar….
The United States should accept this and even promote its acceleration. The goal should be roughly to equate the international positions of the dollar and the euro in the next decade or so, and subsequently to bring the renminbi into the mix along with steady creation of special drawing rights (SDRs)….
These changes would not resolve all the problems of the international monetary system. They would certainly not absolve the United States of the need to get its fiscal house in order. But they would speed up needed rebalancing of the world economy and reduce the risk of future crises.
[Moving to three currencies would be a step in the right direction – toward a Single Global Currency. Each of the three currencies could provide a curency for its respective region. Then, the final merger of currencies could occur.]
4 February 2011 “Here Is The IMF Report Making The Case For A Single Global Currency” at www.minyanville.com by the Minyanville Staff.
Excerpts from the online article...
While global currency news over the past week has largely been focused on China pushing the yuan as a potential global reserve currency replacement for the U.S. dollar, the elephant in the room, always lurking just off to the side in the corner, is the seemingly inevitable move toward a single world currency. The idea is not a new one. Proposals for a single world currency are as old as the 1500s when paper money was very limited in supply.
But the question of a global currency, often posed without answer as a component of hysterical conspiracy theories, is an interesting one. The International Monetary Fund last April provided an in-depth look at why a transition to a global currency might make sense, and the steps necessary to achieve it.
Also, check out the site, singleglobalcurrency.org, which is, as the name implies, dedicated to moving toward a single world currency: “The Single Global Currency Association was incorporated in June, 2003 in the U.S. State of Maine.
30 January 2011 Letter to the Economist by ghaliban supports Single Global Currency, in comment to article: “The rise of the redback – China will have to open its financial market if it wants the yuan to rival the dollar”
The letter begins…
Tthe only rational long-term solution for the world is to have a single global currency, minted by the IMF (which is owned equally by countries) with a strict mandate for notes and coins to increase only at the rate of global nominal GDP, and with 100% reserve banking with current accounts (which should be non-interest bearing) fully backed up by reserves. Anyone wishing to earn interest or dividend on their savings should be required to invest through financial mutual funds, which play the role of financial intermediation.
16 January 2011. SGCA Comment to Paul Krugman critique of the euro in the NY Times Magazine, “Can Europe Be Saved?”
The SGCA comment by Morrison Bonpasse begins...
The euro is now the currency for 17 countries, and more countries are in the application process. Isn’t that a vote of confidence in the euro?
Paul Krugman cites Iceland’s economic difficulties as a support for his gloom about the euro, but Iceland’s crash began with currency and interest rate problems. Krugman does well to compare Iceland to Brooklyn, but he should have concluded that just as Brooklyn doesn’t need its own currency, Iceland doesn’t either. In my book, “The Single Global Currency, Common Cents for the World,” I compared Iceland to Pittsburgh for the same reason. In fact, Iceland is exploring an application to join the eurozone, which makes a lot of cents.
It was a matter of time before the markets determined that bond prices should vary for countries according to the risk of repayment by individual countries. Greece and others are higher risks, so they are paying higher interest rates. This is not a sign of failure for the euro; it’s a sign of maturity.
The euro points the way toward the best solution for global currency woes, and the U.S. dollar is a key part of the problem, and that best solution is a Single Global Currency. If 17 countries can use the same currency, why not 193?
1 January 2011 Estonia beomes the 17th eurozone country.
See ABC online article, “Estonia takes on euro” By Europe correspondent Emma Alberici
See article in its entirety….
Estonia has adopted the euro, taking the single currency into the former Soviet Union for the first time.
With a budget deficit representing less than 1 per cent of gross domestic product, Estonia is the most economically sound of all the Eurozone’s countries.
Its population of just 1.3 million began using the single currency as economists predicted the euro would fall to parity with the US dollar by the end of the new year.
Estonia, wedged between Russia and Latvia on the Baltic Sea, is the 17th country to adopt the euro.
The country’s GDP is worth $18 billion, making it the second smallest euro economy after Malta.
2 October 2010. Estonia to be 17th EMU member on 1 January 2011.
See beginning of related AP article “EU financial bosses praise Estonia” ….
TALLINN, Estonia — European Union officials praised Estonia’s budget discipline and said its quick spending crackdown in response to the economic crisis could serve as an example to the wider euro area — a currency bloc it will join in January.
Estonia will become the 17th member of the eurozone and the first from the former Soviet Union. And though it will be the bloc’s poorest country, its government has earned respect for tough financial measures.
20 Sept. 2010 “Waking Up To A New Currency” by Alex Newman in the New American.
Excerpts from the article…
If all the advocates of a world fiat currency (a currency not backed by a precious commodity like gold) were to scream at once, workers in world capitals, business centers, colleges, and news media may be deafened. And if global financial elites have their way, America will move quickly toward accepting a planetary fiat currency issued by a world central bank.
Other prominent advocates agree with the Mundell strategy for achieving a world currency managed by a global central bank. “We’ll probably get there by the merger of monetary unions,” explained Morrison Bonpasse, founder and president of the Single Global Currency Association and author of The Single Global Currency: Common Cents for the World, in an interview with The New American. “But there are several possible routes. One is to continue the current regionalization of currencies, to include North America, and creation, expansion and merger of monetary unions; and then combine those currencies into one. Another is for smaller countries to continue to ‘ize’ their nations’ legal tender, as in ‘dollarize’ and ‘euroize.’ … Once the ‘tipping point’ is reached where one currency supports approximately 40-50 percent of the world’s GDP, the movement will accelerate to anoint that currency as the single global currency.” The organization’s target date: 2024….
22 June 2010. “Public sees a future full of promise and peril – 41% foresee a Single Global Currency in 40 years” by the Pew Research Center.
According to the Pew Research Centers recent poll, most Americans (51%) do not expect the adoption of a single global currency in the next 40 years. However, 41% DO expect such a Single Global Currency, and that’s good news. One goal for the Campaign for a Single Global Currency is simply to persuade the people of the world that a Single Global Currency is feasible. After that hurdle is crossed, the easy-to-understand benefits will speak for themselves.
28 February 2010. “Head of IMF proposes new reserve currency” by Harry Dunphy, Associated Press in the News Tribune, Tacoma, Washington. See same article at the New York Times
The article begins….
Dominique Strauss-Kahn, the head of the International Monetary Fund, suggested Friday that the organization one day might be called upon to provide countries with a global reserve currency that would serve as an alternative to the U.S. dollar.
“That day has not yet come, but I think it is intellectually healthy to explore these kinds of ideas now,” he said in a speech on the future mandate of the 186-nation Washington-based lending organization.
Strauss-Kahn said such an asset could be similar to but distinctly different from the IMF’s special drawing rights, or SDRs, the accounting unit that countries use to hold funds within the IMF. It is based on a basket of major currencies.
He said having other alternatives to the dollar “would limit the extent to which the international monetary system as a whole depends on the policies and conditions of a single, albeit dominant, country.”
[For the full text of his remarks to the Bretton Woods Committee on 26 February 2010, see “An IMF for the 21st Century”]
12 January 2010. “How Many Currencies?” by Paul Krugman, in the New York Times.
Excerpts from the article.…
16 November 2009. “EU States Emerge from the Shelter of a Common Currency” by Peter Wilson in The Australian (13 October)
Excerpts from the article….
" [Milton] Friedman was adamant Europe’s common
currency could never survive something like the global economic
trauma of the past two years.
"When the global economy hits a real bump," he warned, "Europe’s internal contradictions will tear (the euro) apart."
The biggest bump in 60 years came not too long after Friedman’s death in 2006 and it has not even dented the euro’s standing on the continent, instead leaving policymakers and economists across Europe wondering what would have become of countries such as Ireland and Greece if they had still been relying on the Irish punt and the Greek drachma.
The governments in Athens and Dublin concede they would have been in dire shape without the common currency."
3 November 2009. E-Commerce Times published interview by Ted di Stefano with Morrison Bonpasse, “Folding the US Into a Single Global Currency”
An excerpt from the interview:
"What should replace the U.S. dollar?"
Bonpasse: "Very simply, a single global currency, managed by a Global Central Bank within a Global Monetary Union, should succeed the dollar. Such a currency should incorporate the U.S. dollar and not just push it aside, as the dollar did to the UK pound in the 20th century. The model for the dollar’s future incorporation into a monetary union was the role of the Deutschmark in the formation of the European Monetary Union.
We do not need yet another global currency, whether reserve or not. What we need is a global monetary system which will provide monetary stability, and that stability cannot be achieved in a multicurrency system. By definition, in a multicurrency system there are unpredictable currency fluctuations and risky global imbalances."
21 September 2009. Chinese bestselling novel includes Single Global Currency by 2024.
The Reuters article, China bestseller sees plots and profit in financial crisis , by Chris Buckley, begins….
BEIJING (Reuters) – A disaster worse than the financial crisis will engulf the world, predicts China’s latest financial bestseller, and its author is preparing to profit from the turmoil. But that profit will not be in U.S. dollars.
In “Currency Wars 2”, Song Hongbing claims a shadowy global elite will introduce a single world currency around 2024, tossing the dollar into the dustbin, condemned by loose-spending Washington policies and the waning dominance of the West….
14 September 2009. UN Conference on Trade and Development (UNCTAD) calls for new global currency. See UNCTAD 2009 Trade and Development Report
The Bloomberg article by Jonathan Tirone begins…
The dollar’s role in international trade should be reduced by establishing a new currency to protect emerging markets from the “confidence game” of financial speculation, the United Nations said.
UN countries should agree on the creation of a global reserve bank to issue the currency and to monitor the national exchange rates of its members, the Geneva-based UN Conference on Trade and Development said today in a report.
6 September 2009. In the Bloomberg article “Stiglitz Says U.S. Economic Recovery May Not Be ‘Sustainable’ “, Michael McKee wrote:
Stiglitz, who is a member of a United Nations commission that will study the global financial system and currency regimes, said “the logic is compelling” for a new global currency.
The current system creates instability, weakens global confidence, and is fundamentally unfair to developing countries that are in essence lending the U.S. trillions of dollars and bearing the risk, he said.
“In most quarters, there is a feeling we should move away from the dollar system. The question is do we do it in an orderly way, or a chaotic way,” Stiglitz said. “The size of the deficit and the size of the balance sheet of the Fed have just increased the anxiety and the desire that something be done.”
While some think it would hurt the U.S. to no longer be able to borrow cheaply in dollars, “that era is over,” he said. “We’re moving to a more multi-polar world.”
10 July 2009. “Russian President Dmitry Medvedev pulls new world currency from his pocket” in the Telegraph, UK.
The article begins…
Russia’s President, Dmitry Medvedev, pulled the world’s new currency from his pocket at the meeting of G8 leaders in the Italian city of Aquila.
Mr Medvedev, who has been seeking ways to displace the dollar as the world’s dominant reserve currency, produced a sample coin of what he described as a ‘united future world currency’."Here it is," Mr Medvedev said, according to Bloomberg. "You can see it and touch it." The coin, which was minted in Belgium, was presented to all the G8 leaders attending the summit and bears the words ‘unity in diversity.’
1 July 2009. Kimberly Amadeo reviews The Single Global Currency – Common Cents for the World (2009 Edition) in www.about.com:US Economy
Excerpts from the review:
clearly-written and thorough overview of all issues related
to foreign exchange, history of money, and the need for
a single global currency.
Provides a detailed argument for a global currency.
Describes clearly how the foreign exchange market works.
Recounts the history of money and foreign exchange.
Well documented with many helpful reference resources.
Easy to read.
At 500 pages, is probably intimidating to many readers.
Biased towards a single global currency.
Guide Review – Book Review
This is a thorough explanation of the history of the multicurrency system and the costs of maintaining a multiple exchange rate system. First on the list are currency speculators, who impact the value of money for their own personal profit. Second are the costs of currency transactions, for businesses, governments and individuals, especially travelers. It is well-researched and provides useful resources for additional reading. This book also covers the current conversation by economists around the single global currency debate.
It is, however, biased. Readers who are looking for a thorough discussion of why a single global currency should not be instituted will need to look elsewhere."
30 June 2009. Laurence Brahm column in South China Morning Post, “Fellow Bric road” mentions Single Global Currency Assn.
Excerpt from the column….
"While it may be premature to adopt a gloal currency, as suggested by some economists such as Joseph Stiglitz, the idea does seem to have some momentum. ‘The Bric countries can lead the world toward global monetary stability by supporting the researching and planning for the next global currency to replace the US dollar,’ said Morrison Bonpasse, president of the Single Global Currency Association, a US think tank. Mr. Bonpasse believes that ‘when such a single global currency supports a number of countries with 40-50 percent of the world’s GDP, the ‘tipping point’ will have been reached and other countries will join quickly’ ."
12 June 2009. “Let us roll out the euro to the whole Union” by Marcin Piatkowski and Krzysztof Rybinski in the Financial Times.
Excerpts from the column…
"The big bang eurozone expansion would not complicate monetary management in the eurozone, since the combined GDP of all eurozone candidate countries in central and eastern Europe amounts to less than 10 per cent of the eurozone’s GDP. Equality of treatment would also be adhered to; after all, many of the original eurozone members have not fully met the entry criteria, in letter or in spirit.
Expansion would strengthen the eurozone, as new members would provide impetus for reforms such as strengthening fiscal co-ordination, integrating financial markets and creating the world’s largest, most liquid bond market. Candidate countries do not just want to enter the eurozone; they want to become part of the most successful global currency area…."
11 June 2009. “Volcker says US growth possible this year but strong recovery unlikely; ‘long slog’ in store” by Joe McDonald, AP, in Los Angeles Times.
Excerpt from the article…
"Volcker expressed support for a global currency, which he called “the ultimate logic of a globalized financial system.” China and Russia have called for such a currency to replace the dominant dollar, but Volcker gave no opinion on any individual proposal…."
8 June 2009. “IMF Says New Reserve Currency to Replace Dollar Is Possible” by Alexander Nicholson in Bloomberg.
The article begins….
The International Monetary Fund said it’s possible to take the “revolutionary” step of creating a new global reserve currency to replace the dollar over time.
The IMF’s so-called special drawing rights could be used as the basis for a new currency, First Deputy Managing Director John Lipsky told a panel discussing reserve currencies at the St. Petersburg International Economic Forum today.
“There are many, many attractions in the long run to such an outcome,” Lipsky told a panel discussing reserve currencies at the St. Petersburg International Economic Forum today. “But this is not a quick, short or easy decision,” he said, adding that it would be “quite revolutionary.”
The SDRs would have to be delinked from other currencies and issued by an international organization with equivalent authority to a central bank in order to become liquid enough to be used as a reserve, he said.
As much as 70 percent of the world’s currency reserves are held in dollars, according to the IMF, leading to calls for nations to diversify their cashpiles to avoid excessive exposure to the U.S. economy as it quadruples its budget deficit in a bid to counter the worst recession since the Great Depression.
16 May 2009. New Brunswick Business Journal columnist, Colin Dodds, terms the Single Global Currency a “bolder initiative” in article, “Can China Save the World Economy?”
Dodds is the president of St. Mary’s University in Halifax, Nova Scotia, Canada and he wrote….
bolder initiative is that advanced by the Single Global
Association for a monetary union of the world and a global central bank by 2024. This concept for a single global currency has received a lot of support from eminent economists and readers may wish to check out the Association’s website at www.singleglobalcurrency.org.
11 May 2009. Michael Grunwald writes in Time Magazine, "With his dramatic plans to restructure Wall Street and Detroit, overhaul health care and create a clean-energy economy, Obama is certainly taking political risks, even if he hasn’t gotten around to replacing the almighty dollar with some new, one-world currency the black-helicopter crowd keeps warning about." [emphasis added here]
Article: “Republicans in Distress: Is the Party Over?”
[Has the Single Global Currency now become so inevitable that it’s a project that President Obama "hasn’t gottten around to?"]
6 May 2009. Fox commentator, Sean Hannity, presents idea of Single Global Currency in “Obama Plucking Tree of Liberty Bare”
An excerpt from his statement….
"And their free trade agreements with Colombia and South Korea. When China reportedly considered pushing for a single global currency, the president said he opposed it. Only to have his own treasury secretary leave that door open, sending our dollar into a freefall in one afternoon." [emphasis added here]
14 April 2009. Citizen and Attorney Grayson Brown writes letter to the Advocate in Baton Rouge, Louisiana, US: “A possible solution to meltdown”:
An excerpt from the letter….
"World currency accounts must balance out. Thus, if all countries (other than the United States) run a currency account surplus, then the United States, as the country of the reserve currency, must have a deficit of equal amount. There lies the problem.
The Internet bubble of the 1990s and the housing boom of the 2000s allowed the United States to maintain full employment demand in the face of a staggering trade deficit. That trend, unfortunately, is played out. What is the solution? Consideration should be given to transforming the International Monetary Fund into a global central bank (such as the Federal Reserve System is for the United States)." (emphasis added here.)
24 March 2009. “Obama dismisses idea of a Single Global Currency” from Reuters by Lesley Wroughton and David Lawder.
The article begins….
WASHINGTON, March 24 (Reuters) – U.S. President Barack Obama and his top two economic officials on Tuesday dismissed suggestions by emerging economic powers that the world move away from using the dollar as the world’s main reserve currency.
"I don’t believe that there’s a need for a global currency," Obama told a prime-time televised news conference, adding that the dollar is "extraordinarily strong right now".
24 March 2009. CHINA SUPPORTS NEW GLOBAL CURRENCY
New York Times, by David Barboza, “China Urges New Money Reserve to Replace Dollar”
the head of its central bank has called for the eventual creation of a new international currency reserve to replace the dollar .
In a paper released Monday, Zhou Xiaochuan, governor of the People’s Bank of China, said a new currency reserve system controlled by the International Monetary Fund could prove more stable and economically viable….
Mr. Zhou said the goal of reforming the international monetary system was to "create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run."
[Zhou Xiaochuan’s paper is “Reform the International Monetary System”]
[See also, column by David Francis in the March 25, 2009, Christian Science Monitor: “A global currency? No. A dollar substitute? Maybe“]
15 March 2009. “Nobel Prize Winner Backs World Currency”
published in the Melbourne Herald Sun from Agence France – Presse.
The article begins…
KAZAKH President Nursultan Nazarbayev has won backing for his plan for a single world currency from an intellectual architect of the euro currency, Nobel-prize winner Professor Robert Mundell.
Nazarbayev, speaking at an economic forum in the glitzy new capital he has built on the Kazakh steppe, defended his proposal for the “acmetal” world currency saying it might “look kind of funny” but was not.
And he received intellectual support from the Canadian economist Prof Mundell, who helped lay the intellectual groundwork for Europe’s single currency.
“I must say that I agree with President Nazarbayev on his statement and many of the things he said in his plan, the project he made for the world currency, and I believe I’m right on track with what he’s saying,” Prof Mundell said, adding the idea held “great promise”.
13 March 2009. “Kazakhstan’s cure: one currency for all ” by Peter Leonard of the Associated Press, as published in the Globe and Mail.
The article begins….
ASTANA, Kazakhstan — Kazakhstan ‘s president called Wednesday for the creation of a single global currency as a potential solution for the current financial turmoil.
Discussions on a currency operating under the aegis of the United Nations should be discussed at the upcoming Group of 20 meeting in London , Nursultan Nazarbayev said — without detailing how this proposal might resolve the crisis.“The creation of a global currency should be put on the agenda of all major political and economic bodies, summits and forums, including the G8 and the G20,” Mr. Nazarbayev said at an international economic forum in the Kazakh capital, Astana.
27 February 2009. “Would a Single Global Currency Have Helped Cool the Meltdown?” in E-Commerce Times by Ted di Stefano, in interview with Morrison Bonpasse.
Di Stefano introduces the interview…
"The financial world is looking for ways rebuild people’s trust and confidence in markets, and Morrison Bonpasse sees a future for a single global currency. “The movement of vast amounts of money around the world to avoid currency risk is not productive,” he told E-Commerce Times columnist Theodore F. di Stefano."
The article was republished in:
Bizcommunity, South Africa as “Would a Single Global Currency have helped cool the meltdown?”
6 February 2009. Professor Hossein Askari of George Washington University writes in Asia Times, “Wanted – a world central bank”
Excerpts from the article…
The only sure way to stabilize the world economy is to create a world central bank and a return to a single reserve currency….
The single reserve currency would circulate along with other currencies as a mean of payments. The world central bank should have a strict and primary obligation to follow a fixed rule and would not be allowed to adopt discretionary policies. Its role would be only to provide a safe and stable reserve currency, and not the achievement of full employment for the world economy.
26 January 2009. Professor Michael Boskin of Stanford and the Hoover Institution asks the right question, “Why not create a single global currency…?” in his article in the Guatamala Times, “The Euro at Ten”
The article begins…
When a group of individual currencies is replaced by a single currency, as the Deutsche mark, French franc, Italian lira, Spanish peseta, and others were by the euro, there are two primary benefits: lower transaction costs and greater transparency.
And then asks the question…
What, then, of the costs? Why don’t all nations join currency areas, or why not create a single global currency, as Nobel laureate Robert Mundell suggests?
[After looking at some costs, and not all the benefits, Prof. Boskin concludes that the world is not yet ready for a Single Global currency – but what about starting the resarch and planning NOW?]
24 January 2009. Jeremy Warner writes in The Independent (UK) that "The only long term solution is a world currency…", in article, “Exchange Rates Reignite Fears of Protectionism”
The column begins…
Outlook: Exchange rate worries swept back on to the international agenda this week with a leading financier opining that the pound was “finished”, various eurozone nations expressing concern over sterling’s dramatic devaluation, the new US Treasury Secretary accusing the Chinese of “manipulating” their currency to prevent it appreciating against the dollar, and the Japanese hinting at renewed currency intervention to stop the yen rising any further.
Then, Warner concludes:
The only long-term solution is a world currency, but given that nations cannot yet agree even on climate change and trade, let alone war and peace, a global currency would seem rather a long way off.
[See COMMENT by the Single Global Currency Assn.]
1 January 2009. “Slovakia becomes 16th country to adopt the euro” from the Associated Press.
The article begins…
BRATISLAVA, Slovakia (AP) — Slovak banks did brisk business as they opened on New Year’s Day for a very special occasion — issuing euros to citizens eager to get their hands on the country’s new currency.
The small alpine nation on Thursday became the 16th country to adopt the European Union’s euro — a currency that also celebrated its 10th birthday this New Year’s Day. With the addition of Slovakia, the euro currency will be used by 330 million people with an annual gross domestic product of more than 4 trillion euros ($5.6 trillion).
The decision by this country of 5.4 million people to join the eurozone and abandon the Slovak koruna appears even wiser now amid the global financial crisis, as other European countries have seen their currencies severely buffeted….
30 December 2008. Wall Street Journal Editorial “The Euro Decade and its Lessons”
About a Single Global Currency, the Journal said….
"For Mr. Mundell — and former Fed Chairman Paul Volcker — the lessons point to the eventual need for a single global currency. That may be a political leap too far. But the world could still harness the benefits of exchange-rate stability if its political and economic leaders began to discuss how better to coordinate monetary policy. Mr. Mundell suggests, for starters, a mechanism for close coordination among the Fed, the ECB, and the Banks of England, China and Japan….
The decade of the euro has demonstrated that there is an alternative to the instability and volatility of the era of floating exchange rates that began with the collapse of Bretton Woods in 1971. It’s time to build on that lesson for the good of free markets and global prosperity."
[To this editorial, the Single Global Currency Assn. added this COMMENT observed, "If 16 countries can use the sme currency, whiy not 192?"]
3 December. “Spur pluralistic monetary system steadily” from the Peoples Daily Online, China.
Excerpts from the article…
…As a matter of course, the settlement mechanism with the adjustment of a single world currency cannot be accomplished overnight, but has to be materialized gradually and steadily with an incessant rise in the strength of these new-emerging economics and along with an active support from of the U.S. and other developed nations
3 December. Charles Scaliger in the New American, “Looking Beyond the Global Economic Summit” with critical reference to the Single Global Currency
Excerpts from the article…
It’s a safe bet that all of the parties are in substantial agreement on the need for a global central bank, a new global currency beholden to no one national government or central bank, and a global financial regulatory body or bodies.
The most radical proposal likely to emerge at future summits – once the public worldwide, and especially in the United States, has been sufficiently conditioned – is a new global currency, possibly only for use in international transactions, at least at first. A single world currency was a major unmet goal at Bretton Woods, with the dollar becoming the global money standard instead.
1 December 2008. “Several Countries are Rethinking the Euro” by Carter Dougherty in the New York Times.
Excerpts from the article…
At its core, the convulsions in financial markets encompass a "flight to quality," the term investors use to describe a sudden shift of money out of potentially risky assets into the safest possible assets, one of which has been the euro, and investments denominated in euros.
This dynamic has played out quickly…."
[There was no mention of the how a Single Global Currency will SOLVE this problem, permanently.]
20 November 2008. Katherine Austin Fitts writes of the G20 conference at Solari.com. Statement From G-20 Summit: In English
She wrote, inter alia:
"We will continue the move toward one world government and one world currency."
In response, Morrison Bonpasse of the Single Global currency Assn., wrote,
"As one part of the solution to the current and longstanding global financial instability, the world is moving to a Single Global Currency, managed by a Global Central Bank within a Global Monetary Union. Ms. Fitts may disagree with that trend, but the world will be better and less risky for it."
30 October 2008. Iain Macwhirter supports new currency options in “Europe’s Looming Crisis”the New Statesman.
Macwhirter wrote, " Ultimately, what is needed is an international central bank with the resources to provide liquidity guarantees, recapitalise banks and regulate international financial flows. This is an immense task, and the world may not yet be ready for it. But it is not a new idea: John Maynard Keynes argued for precisely this during the Bretton Woods negotiations in 1944. He even suggested a world reserve currency ‘bancor’. This is the kind of thinking we need today."
25 October 2008. Jeffrey Garten of the Yale School of Management, calls for Global Central Bank in article in Newsweek, “We Need a Bank of the World”
He wrote, " In the future, a global central bank is needed to oversee the rudderless global financial system….
A new institution could have influence over key exchange rates, and might lead a new monetary conference to realign the dollar and the yuan, for example, for one of its first missions would be to deal with the great financial imbalances that hang like a sword over the world economy."
8 October 2008. “Calls grow for a new model for global trade” in the Boston Globe, by Robert Weisman.
Excerpt from the article…
"It also could mark the start of an effort to overhaul the global financial system conceived at the 1944 summit in Bretton Woods, N.H., which set the rules of international commerce for industrial countries.
That model, developed in an era of slower communications and simpler financial transactions, has proved inadequate to govern today’s rapid flow of capital across borders. The World Bank’s president, Robert Zoellick, this week called for a "new multilateralism."
"We’re going to have to build new international financial institutions," said Joseph L. Bower, a professor at Harvard Business School. "Bretton Woods was relatively primitive. We live in a world where trillions of dollars are moved around the globe daily. No one at Bretton Woods imagined that."….
26 August 2008. “Nobel Laureate Mundell Predicts Dollar to Reach $1.30 Per Euro” by Simon Kennedy at Bloomberg.
Excerpts from the article….
Aug. 22 (Bloomberg) — Nobel economics laureate Robert Mundell predicted the dollar will climb to about $1.30 per euro in the next year as the U.S. economy rebounds….
In a presentation to a conference of Nobel winners and young researchers, Mundell today said the dollar’s long-term trend remains down as U.S. indebtedness grows and more dollars are held abroad. The U.S. currency’s next decline will push it below this year’s record low, he said.
As the dollar falls, it may eventually be replaced as the world’s chief currency, paving the way toward a single global currency, he said.
"The dollar era will last until the U.S. is replaced by the next superpower,” he said, noting China’s economy could surpass the U.S. in size by 2030. "My hope, if not my expectation, is that the beginnings of a new international monetary system could be made at the time of the World Fair in Shanghai in 2010.”
The article presented the responses of 55+ prominent political people and economists to the question: "Ten years from now, what will be the next great global currency?"
Most predicted the dollar, and some the euro and even a few the yuan. However, the most accurate two respondents were:
HANNES ANDROSCH, Former Austrian Finance Minister and Head of Creditanstalt-Bankverein, who said, "I suspect questions about currency blocs or lead currencies will naturally resolve into the emergence of a world currency."
ALLEN SINAI, Chief Global Economist and President, Decision Economics, said, "Markets will first identify those currencies and commodities most favored that will be part of the ‘next great global currency,’ not a single currency such as the dollar has been, but a basket reflecting the new and emerging realities of global economic wealth and power. A defined currency bloc would follow."
23 August 2008. “One World, One Money,” by Carl Teichrib at the website for “Forcing Change”, a monthly intelligence journal and a division of Globalization International in Manitoba, Canada.
Teichrib reviewed the progress toward a Single Global Currency, including the work of the Single Global Currency Assn., and shares his concern of excessive concentrated power in a Global Central Bank.
20 August 2008. “Slovak mint starts production of euro coins” by Lucia Kubosova in Eu Observer.
The article begins…..
Slovakia’s mint has started manufacturing euro coins as the country prepares to join the 15-strong monetary union on 1 January 2009.
Some 500 million coins weighing 2,406 tonnes began to be produced at a speed of 750 coins per minute at the Mint in Kremnica on Tuesday (19 August) in a run to last till the end of the year, the state company’s spokesman, Jaroslav Setnicky, told reporters….
19 August 2008. In The New Nation, “The dollar’s reign coming to an end.” by Chandra Muzaffar.
Excerpts from the article….
One of the most significant trends in the global economy in recent years has been the decline of the US dollar. It is a trend that has far reaching consequences for all the inhabitants of this planet….
we start working now – even if it takes a few decades –
towards a common world currency which is not linked to any
particular nation or region that can be used for international
trade? Why shouldn’t we let our imagination run
ahead of reality at a time like this? [emphasis
17 August 2008. “Southern African countries launch free trade zone” from the AFP, online.
Excerpts from the article….
Southern African countries launched a regional trade zone at a summit on Sunday that aims to eliminate import tariffs, with plans for a common currency by 2018.
Eleven of the 14 countries that are part of the Southern African Development Community (SADC) will participate in the free trade area…
The free trade area precedes a customs union planned by 2010, a common market by 2015, monetary union by 2016, and a single currency by 2018.
11 August 2008. In Interview in Broker Deal Journal, Former Federal Reserve Chair, Alan Grenspan, stated his view of the Single Global Currency.
He was asked, “Do you believe we will go to one global currency in five decades?” and Mr. Greenspan responded, “No, I doubt it.”
In response, SGCA President Morrison Bonpasse an online “Comment” that began,"His answer, “No, I doubt it," is most certainly wrong. He joins the ranks of national economists who doubted the euro would be established and then doubted that it would succeed. Rather than settling for doubt, he could help advance the cause of worldwide monetary stability by urging that research and planning be initiated for the Single Global Currency. For starters, there should be a comprehensive study of the Costs and Benefits of a Single Global Currency."
21 June 2008. “An Economist Who Matters – The weekend interview: with Robert Mundell” by Kyle Wingfield in the Wall Street Journal.
Excerpts from the article….
…As for the euro’s overvalued status, he forecasts deflation in Europe, along with a slowdown and an end to its housing boom. The answer, he suggests, is for the Federal Reserve and the European Central Bank to cooperate in putting a floor and a ceiling on both the euro and the dollar. “You have to grope” to the appropriate range, he maintains, but a good starting point would be to keep the euro between 90 cents and $1.30.
Even better, in his mind – and now we’re really talking long term – would be to have a global currency. This could take the form of a new money or a dominant existing one to which all others are fixed – probably the dollar. “As Paul Volcker says,” Mr. Mundell relates, “the global economy needs a global currency.”
To get there, he proposes holding a new, Bretton Woods-type meeting in 2010 at the Shanghai World’s Fair. Mr. Mundell, who has been spending “a lot of time” in China advising the government, says reviving an international system of fixed exchange rates would be a tremendous help to Beijing as it tries to fend off demands from U.S. and European politicians that it appreciate or float its currency. …
Another part of his solution is for Asian countries to form their own currency bloc. If they did so, he says, “it’d be comparable in size to the European and the American bloc. And then it would not be so much the question of . . . the U.S. and Europe bashing China” or other rising economies.
These three currency blocs, he predicts, would be large enough to weather wide swings in their exchange rates. But the swings would still do economic damage, so “the best thing you could do is to stabilize them, and that’s where the global currency comes in.”
Could it happen? Mr. Mundell allows that three decades may pass, but predicts that like the euro and the Reagan revolution before it, the global currency’s time, too, will come. Any skeptics might want to review the last few decades before betting against him.
18 June 2008. “Experts embrace a currency union” from AME, about the GCC 08 Conference, with presentation by Single Global Currency Assn.
Excerpts from the article…
In a joint presentation, Mr. Russell Krueger, on leave from the International Monetary Fund, and Mr. Erwin Nierop, Senior Official from the European Central Bank, focused on the efforts in many regions to create currency unions. They spoke about how the economies of the countries joining the union could be affected, the legal framework, and the process of changeover.
‘An impressive line up of speakers at the GCC Currency Forum 08 raised expert debate about the economic and banking developments required to converge the currencies’ said, Allard Marx, Managing Director INCIDE, the consulting firm that registered a world currency sign in 2002. He emphasised on the implementation and acceptance of such a major change and to show how the process could be helped by visualising an outcome ahead of time.
(See also, “Latest News” "Latest news" on this website.)
17 June 2008. “Despite Irish Vote, the Euro Remains Strong” by Mark Landler in the New York Times
Excerpts from the article…
But the angst has not spilled into the currency markets, where the euro — perhaps the most tangible symbol of European unity — rose against the dollar Monday, the first full day of trading since the results of the Irish vote were announced.
That is a marked change from three years ago, when the rejection of a proposed European constitution by France and the Netherlands deeply rattled the euro. At that time, some experts questioned whether the currency could survive without a more unified Europe.
Few people are saying that today, a testimony not only to the resilience of the euro but also to a widening belief that the European monetary union can function without an accompanying political union.
“Any poll in Ireland would show massive support for the euro, but not for political integration,” said Philip R. Lane, professor of international macroeconomics at Trinity College in Dublin. “The question is, do you need political integration for a functioning monetary union?”
The answer, for the most part, is no, said Professor Lane, adding that “monetary policy is essentially a technical exercise, when delegated to an independent central bank.”
10 June 2008. “Time Overdue for a World Curency” by Hossein Askari and Noureddine Krichene in Asia Times.
Excerpts from this groundbreaking article…
A world central bank is becoming a necessity in a global
economy. Such an independent central bank, not subject to
the political whims of a particular government, would be
more likely to apply orthodox and safe central banking.
Contrary to any country’s central bank, a world central
bank would have no obligation to accommodate budgetary deficits,
war spending, domestic wage and price rigidities, speculative
asset bubbles, or rescue ailing domestic banks. Its law
should be as meticulously applied as any constitutional
law of a Western democracy….
The world currency note will circulate along with national currencies, serve as a reserve asset, and become part of the international payments system.
By becoming a full-fledged reserve asset, a world currency would cushion the real value of international reserves against inflationary policies of reserve currency centers and wide fluctuations in exchange rates….
3 June 2008. “Dollar crisis looms, China ponders reform-Mundell” by Jason Webb, Reuters.
Excerpt from the article….
1 June 2008. Ezine article by Hans Bool, “Towards a Single Global Currency?”
The article begins…
Some initiatives or ideas count on direct acceptance. Then the problem is: how do we do it, is the project feasible? Other ideas might be feasible but count on resistance from the day they get announced. To me, a single global currency would fall in the second category.
I was just imagining how the financial crises would evolve when there was only one global currency and one central bank. It could have been better, but it also could have been worse.
my opinion a single global currency is both not feasible
[Hans Bool gets credit for at least thinking about the idea of a Single Global Currency even if his conclusions are short sighted.]
26 May 2008. “South America eyes common currency” from Thomson Financial News at Forbes online.
The article begins….
BRASILIA (Thomson Financial) – South America is thinking of creating a common currency and a central bank along the lines of those in the European Union’s euro-zone, Brazilian President Luiz Inacio Lula da Silva said Monday.
The idea is a logical next step following the signing last Friday of a teaty creating a Union of South American States that aims to promote joint regional customs and defense policies, Lula said during his weekly radio broadcast.
8 May 2008. “Slovakia gets the go-ahead to adopt the euro” by Carter Dougherty, International Herald Tribune.
The article begins….
The European Commission on Wednesday approved the application of Slovakia to adopt the euro as its currency on Jan. 1, 2009, completing a fast and furious transformation that brought the small country from dictatorship to thriving market economy in less than a decade.
Slovakia will become the 16th country using the euro.
8 April 2008. Harvard Professor and former IMF Chief Economist Kenneth Rogoff writes article in the Lebanon Daily Star, “Has the moment come to replace the U.S. dollar?”
Excerpts from the article…
Of course, if the dollar were to fall off its perch as the
world’s dominant currency any time soon, the euro would
be the only serious alternative. The yuan may well supplant
the dollar in the second half of this century….
As central bankers and finance ministers ponder how to intervene to prop up the dollar, they should also start thinking about what to do when the time comes to pull the plug.
3 April 2008.“The Fed’s Revolution” Article in BusinessWeek by Peter Coy and Michael Mandel contains Paul Volcker comment re: Single Global Currency.
Excerpt from the article……
The possibility that a primarily domestic crisis could quickly become global highlights the need for international cooperation. Former Fed Chairman Paul A. Volcker, who broke the back of high inflation in the early 1980s, told BusinessWeek on Mar. 19: “If you have a closely integrated world economy with free trade and free movements of capital, the logical complement of that is a global currency.”
21 March 2008. See COMMENTING ARTICLES (PRO AND CON) at www.helium.com on Barry marcus’s article below (17 March 2008).
17 March 2008. E-Article by Barry Marcus at Helium.com “Could a single global currency work?”
The article begins…
"A single global currency has a few advantages over the current system of 190 separate currencies in circulation in the world. The first of these is that it would eliminate huge volumes of global currency trading and the considerable costs associated with this. Currency speculation which has at times resulted in quite spectacular currency fluctuations would become a thing of the past. Of course it follows that currency fluctuations would end. It can also be expected to bring about greater stability to world trading conditions…. "
[See Barry Marcus’s blog for more articles and thoughts about currency and the Single Global Currency.]
The interview begins with two questions….
Ted di Stefano: Why do you and others support the creation of a single global currency?
Morrison Bonpasse: Briefly, it will save the world the equivalent of trillions of dollars and greatly reduce the risks to the international economy currently posed by the existing multi-currency system.
di Stefano: How would it save the world trillions of dollars?
Bonpasse: The most straightforward savings would come from the elimination of foreign exchange trading. Currently, the equivalent of US$4.2 trillion per working day is traded. This costs the world approximately $400 billion per year. Other savings would come from the elimination of the need to maintain low-return foreign exchange reserves….
December 2007. Cover Story in Global Finance: “Universal Currency Could Hold Key To Stability And Growth” by Gordon Platt.
The article begins….
With a single global currency, prices worldwide would be denominated in the same unit and could be easily compared….
13 November 2007. Speech by Nicholas Garganas, Governor of the Bank of Greece, “Does One Size Fit All?” The speech was given at the Central Bank of Chile on 12 October 2007.
"To conclude, the euro area has indeed come a long way. The success of the single currency has demonstrated that one size can fit all. Such has been the success of the euro area that it has given rise to considerations, still at an early stage, of regional currency arrangements in Africa, Asia and Latin America. Nevertheless, much more needs to be done to ensure that the euro area becomes a more dynamic force for growth in the global economy on a sustainable basis. It is my view that the experience of the euro area to date only serves to highlight the fact that a currency union requires more flexibility in factor and product markets, and greater competition than do independent monetary areas. Flexible markets and strict fiscal rules are not just superfluous conditions for members of a monetary union. They are necessities that make monetary union work by providing the adjustment mechanisms that the one size fits all monetary policy cannot." [emphasis added here]
9 November 2007. Canadian party advocates common currency with U.S. from Reuters.
The article begins….
OTTAWA, Nov 7 (Reuters) – A political party that advocates the separation of Quebec from Canada pushed on Wednesday for a union of the two North American dollars as a way of easing the pressure on exporters from the surging Canadian currency.
Paul Crete, the lead finance spokesman for the separatist Bloc Quebecois, which elects members to Canada’s Parliament only from Quebec, said the manufacturing and forestry sectors were already struggling with an economic crisis and did not need big swings in the Canadian-U.S. exchange rate to add to their woes.
“Adoption of a common currency would make the life of our exporters a lot easier,” he said.
Morrison Bonpasse of the Single Global Currency Assn. attempted to post the comment below on the version of the story appearing on Canada YAHOO!
Instead of monetary union with the U.S., Canada would do more for itself and the world by supporting a Single Global Currency, managed by a Global Central Bank within a Global Monetary Union. (See www.singleglobalcurrency.org)
The implementation of a Single Global Currency will save the world approximately $400 billion in foreign exchange transaction costs, and will eliminate currency crises and balance of payment problems and eliminate all currency fluctuations.
It’s Common Cents.
19 September 2007. According to Poll, “Majority of Poles Want Euro” from www.thenews.pl.
The entire article…
The latest opinion poll conducted by GfK Polonia shows that 59 per cent of Poles are for the replacement of the Polish currency – the zloty – with the Euro and 27 per cent are against.
Seven per cent had no opinion on Poland’s accession to the Euro Zone.
More than half of respondents (51 per cent) believe that Euro should be introduced within 4-5 years.
Poles can see the following positive consequences of the introduction of the common currency: easier travel within the Euro Zone (58 per cent), closer association with Europe (28 per cent) and an increase in the number of foreign investments in Poland (27 per cent).
Poles are mainly afraid of an increase in prices in the initial stage (61 per cent), deterioration of families’ welfare (47 per cent) and difficulties in getting used to the new currency (46 per cent).
But there was indication that Poles have more to learn about the single currency.
Twenty two per cent do not know what institution is in charge of monetary policy in the Euro Zone and 43 per cent do not know how many states have adopted the common currency.
The opinion poll was conducted among a sample of one thousand respondents above 15 years of age across Poland.
10 September 2007. Ratnam Alagiah, member of the SGCA Board of Directors, writes REVIEW of The Single Global Currency – Common Cents for the World, in the Australian journal, JAMAR, Vol. 5 Number 1, Winter 2007, p. 69. JAMAR is the Journal of Applied Management Accounting Research.
Excerpts from the review…
"… a refreshing approach to the problem in accounting [of fluctuating international currency values] is the introduction of a common currency across the globe. Clearly, the solution lies in not inventing yet other methods in accounting for inflation but to change the very basis of the measurement of transactions. That is, to change the currency. With the implementation of a common currency across the globe, all companies in all countries will use the same currency, and therefore the same measure in recording transactions, based on the same accounting standards…
I recommend the book to all accountants, and challenge accountants to help implement what is the next generation of accounting."
11 August 2007. “Europe Offers Strong Case for Single N. American Currency” by J. Collin Dodds, Halifax News
The article begins….
The concept of a single currency for North America has reared its head again. There is no doubt that a single currency would be more efficient for Canada , as we have close trade and investment relationships with the U.S.
Those engaged in the movement of goods, services
and capital cross border would not have to worry as they
do now about the short- and long-term volatility of the
currencies and the costs of hedging the currency exposure.
As we know from recent experience, the Canadian dollar can
move sharply on a day-to-day basis and over time, the movement
can be very significant, particularly against the U.S. dollar.
27 July 2007. IMF Managing Director Rodrigo de Rato speech: “Capital Flows in an Interconnected World”
He said in his paragraph #5:
Of course, financial globalization also has risks, for investors and for the countries in which they invest. Over the last few months I have on several occasions cautioned about some of these risks: stemming from global imbalances and from increased protectionist sentiment; from carry trades across various currencies; and from the lack of information about the exposure of financial institutions, including hedge funds, in the U.S. sub-prime mortgage market. My aim in drawing attention to these risks is not to predict disruption in global financial markets, but to forestall it. By taking timely action, governments and regulatory authorities in industrial countries can protect their investors and markets. And countries which are the recipients of large capital inflows can protect their economies from the consequences of market disruptions.
[What he didn’t say in his presentation is that the best long term way to avoid many international risks is to move to a Single Global Currency managed by a Global Central Bank within a Global Monetary Union. See email to Mr. de Rato from the Single Global Currency Assn. Sergio Cardenas, of the Public Affairs Division of the IMF responded on 6 August 2007. "Dear Mr. Bonpasse,
Thank you for your recent e-mail to Rodrigo de Rato. It has been circulated to the offices of the Managing Director and Deputy Managing Directors, and also to the Monetary and Capital Markets (MCM) and Policy Development and Review (PDR) Departments.
Best regards, Sergio.]
Excerpts from the Article…
Of course, no one can predict if or when a worldwide currency consolidation will happen. Presently, we are seeing gathering strength in currency zones such as the dollar, euro and yen. There certainly is consolidation going on because it makes international trade a lot more efficient and seamless.
My best guess is that we’ll see more consolidation of currencies, but I wouldn’t dare guess when or if we’ll see a single global currency. I’ll leave that to the mavens like Mr. Morrison Bonpasse. Even if his goal of a single world currency by the year 2024 is optimistic, the prospective benefits warrant further research and planning now, rather than later.
[Ted di Stefano is a member of the Board of Directors of the Single Global Currency Assn, which he fully disclosed in his column.]
19 July 2007. “Mirror of the Boom” Editorial from the New York Sun.
Beginning and ending paragraphs…
These columns are ever ready to raise a cheer at the milestones of American prosperity. New highs in the Dow or in the Manhattan real-estate market are, to us, markers of the progress of the age. Quibbles, we leave to others — though, there is one thing. The yardstick by which these triumphs are measured is getting shorter. The dollar is setting 15-year lows in the world’s currency markets….
So while we glory in the soaring New York real estate market and the Dow nipping over 14,000 on intra-day trading, let us not forget the mirror image — the shrinking Bush dollar.
the Single Global Currency Assn wrote a letter “The
Single Global Currency – The long term solution to currency
fluctuations” The letter begins, "
The long term solution to many of the world’s financial
problems and risks is to implement a Single Global Currency,
within a Global Monetary Union where there will be no such
currency fluctuations and no current account imbalances
and no currency crises…."]
11 July 2007. National Public Radio (U.S.) interviews Benn Steil for segment, “Is a World Currency Realistic?” (audio file)
The NPR summary:
Morning Edition, July 11, 2007 · In a recent article in Foreign Affairs magazine, economist Benn Steil says most national currencies should be eliminated because they end up being manipulated by politicians, and do more economic harm than good.
The interview begins…
JOHN YDSTIE, host: This is MORNING EDITION from NPR News. I’m John Ydstie.
RENEE MONTAGNE, host: And I’m Renee Montagne. Politicians often accuse China of keeping its currency, the yuan, deliberately weak. Sounds like a case for burgernomics. For 20 years, The Economist magazine has published a Big Mac index. Since Big Macs are sold in about 120 countries, the hamburger can be used as a yardstick to compare currency values.
YDSTIE: The undervalued yuan in…
10 July 2007. “Cyprus, Malta to join euro” By AOIFE WHITE in Business Week.
Excerpts from the article…
The European Union gave Cyprus and Malta final approval Tuesday to start using the euro next year, taking to 15 the number of nations sharing the currency.
Diplomats said finance ministers had voted to allow the two tiny Mediterranean nations to join the currency zone on Jan. 1. They were also to set the exchange rate for the Cypriot pound and Maltese lira as the two currencies are swapped for the euro, but details were not immediately available.
Cyprus and Malta will bring just over 1 million people to the 318 million who now use the euro. Their economies account for only 0.2 percent of euro-zone gross domestic product.
Cyprus and Malta worked hard to meet the strict EU economic standards for euro nations, with Cypriot workers agreeing to calm wage demands that could hike inflation while Malta paid off debt to cut its budget deficit below the EU maximum of 3 percent of gross domestic product.
Both entered the European Union in May 2004. Only one other country that joined the EU at the same time — Slovenia — has so far adopted the euro.
The largest of the EU newcomers — Poland, Hungary, the Czech Republic, Romania and Bulgaria — have yet to set a date. Estonia had originally planned to join next year but will delay membership as its growing economy sees inflation surge, a problem that has also slowed Latvian and Lithuanian plans. Slovakia is scheduled to join in 2009.
To keep their shared currency stable, euro nations are also supposed to keep overall public debt below 60 percent.
2 July 2007. Former U.S. Presidential candidate, Jesse Jackson, urges common currency for Africa. from “A US of Africa must exert moral authority: Jesse Jackson” at www.rawstory.com.
Excerpts from the article…
A United States of Africa which is being debated by the continent’s leaders must exert moral authority and address the problems on its doorstep, former US presidential hopeful, Jesse Jackson, said Monday….
Jackson also called on Africa to consider the creation of a common currency as part of any moves to forge closer unity which could carry weight outside the continent.
"They need a common currency. With the exception of the (South African) rand, no African currency has value in the north," he said.
29 June 2007. “IMF managing director De Rato to step down in October” by Peter Kasperowicz, from AFX News, in Forbes.
Excerpts from the article…
WASHINGTON (Thomson Financial) – International Monetary Fund Managing Director Rodrigo de Rato will not serve the full length of his term, and will resign in October, he said in a statement today….
De Rato oversaw a change in IMF policy on currency monitoring that was announced last week, although many critics in the US said he was not aggressive enough in policing undervalued currencies.
[Hopefully, the new Managing Director will want to focus on the long term strategy for the IMF, including the Single Global Currency.]
27 June 2007. Rodrigo de Rato, Managing Director of the IMF, “Expanding world economy is risky business” in the Globe and Mail on 20 June.
Excerpts from the Op-Ed….
The world economy is set to grow again for a historic sixth year, spurred on in no small measure by financial markets and cross-border movements of capital in recent years. But recently risks have been on the rise, particularly in financial markets…
One of our central objectives at the International Monetary Fund is to promote international financial stability. Working with other international bodies, the organization plays a key role in international discussions on these issues, and is deepening its work on them….
As financial globalization grows deeper, so do the risks that turbulence in one country’s markets might spill over to others. The IMF is focusing increasingly on mitigating these risks. At the same time, it is also helping to integrate developments in financial markets and the financial sector into economic analysis, with the aim of reducing the frequency and severity of financial crises….
[Mr. de Rato’s concern about international financial risk is well-placed, but he has said nothing about a long term plan to reduce that risk – with a Single Global Currency.]
25 June 2007. “Time for a single Caribbean dollar” by Sir Ronald Sanders in the Jamaica Observer.
Excerpts from the column…
Serious attention has to be given to the creation of a single currency by the countries of the Caribbean Community and Common Market (Caricom) that earlier this year signed an agreement to establish a single market…
A monetary union and a single currency in the countries
of the Caribbean Community and Common Market (Caricom) would
be a boon to commercial operations in the region from the
smallest trader to the largest corporation.
It would also be a delight to multi-destination tourists and to the ordinary Caricom citizen travelling from one country to another.
countries need look no further than within their seven smaller
member states, the countries that comprise the Organisation
of Eastern Caribbean States (OECS), to witness some of the
benefits of a currency union and single currency.
In the OECS countries, cross-border investment has increased; the currency is the strongest in the region, transaction costs for business is less than they are with other Caricom countries, and the people of the area are able to travel without the burden of having to change their money…
21 June 2007. Bloomberg Columnist, Mark Gilbert, writes of hypothetical move to Single Global Currency, “Granddad, Did You Believe in Central Banks Once?: “
After world financial crises, the boy asked his Granddad …
"I’ve been meaning to ask you, Granddad; what are all those funny little rectangles of green paper in that big frame on the wall next to your desk?”
"They’re called dollars,” Granddad said. "We used them to buy things in the olden days. In 2015, a group called the Single Global Currency Association convinced the Bank for International Settlements, which by then was running the world’s financial systems, that everyone should switch to one type of money.”
"And they didn’t choose the dollar, Granddad?”
"No, Joel. There was a global referendum to make the decision on which currency people wanted. Which is why we now use the yuan all around the world. Anyway, it’s getting late. Back to your Mandarin homework, young Master Bernanke.”
19 June 2007. “Rwanda, Burundi sign East African Community deal” by Tim Cocks, Reuters, Africa
The article begins…
KAMPALA (Reuters) – Rwanda and Burundi officially joined the East African Community (EAC) on Monday, signing accession treaties that will expand the regional economic bloc to five nations and boost trade.
Officials said their entry into the EAC, alongside Kenya, Uganda and Tanzania, would be effective from July 1.
“I would like to welcome the two new members of the East African Community. We hope to make this combination of five countries a big success,” said Kenya’s president and outgoing EAC chairman Mwai Kibaki at the signing ceremony.
Rwanda and Burundi hope to benefit from an EAC customs union, which began setting common external tariffs for goods entering the region in January 2005.
The move would also allow the tiny central African neighbours to join a planned political federation, including a common market for the region’s combined population of 110 million, a monetary union and a common president and parliament by 2010….
13 June 2007. Indian political party has long supported Single Global Currency. (Now is supports new global calendar, too: See “Uniform global calendar : Dravida Peravai supports uniform global calendar” in Asian Tribune.
Dravida Peravai’s party manifesto registered with Election Commission of India advocates single global currency to end the supremacy of dollar.People laughed at it when it was mooted in an article by Nandhivarman in an English weekly New Times Observer in the year 1994.
Europe started with different currencies but today with single currency Euro, Europe has reached a common market, whereas in India we started with single currency namely rupee but we have not become one common market, lamented India’s former Finance Minister Yaswant Sinha in a personal meeting with him.
Euro had challenged the might of the dollar regime and the day for single global currency to end economics of speculation is not far off. The next logical step would be to begin with single Asian currency….
13 June 2007. New British Petroleum (BP) Chair mentions "Single Global Currency" in article, “BP chief backs carbon trading”
In an article about a global carbon emissions market, Mr. Tony Hayward said, “Nobody can doubt that financial markets are now global and that there is a global market in equities, commodities, futures, options, foreign exchange and bonds. Yet all these markets started off in individual countries, sometimes just in small localities, and grew up without the need for a single global currency” he said.
[However, he was partially wrong. Even if it is true that finanical globalization is ongoing, there still IS a need for a single global currency. It would make thje world financally safer and more prosperous.]
1 June 2007. “71% of Maltese feel informed about euro” from Maltamedia news.
The article begins….
71% of citizens feel they are “rather well” or “very well-informed” about Malta’s changeover to the euro currency. The result emerged from a Eurobarometer survey on the introduction of the euro in the new European Union states.
In the last similar survey held by the European Commission, only 38% felt they were rather well or very well-informed about the currency. The Maltese’s increase in self-perceived euro-related knowledge is believed to have come about through the campaign tied to the introduction of the common currency.
However, the self-reported level of information does not necessarily coincide with actual levels of knowledge. Although 71% of Maltese said they were well informed about the euro only a minority at 28%, was able to correctly say how many countries there are in the eurozone . This indicates that citizens appear to be less interested in the global aspects of the European Monetary Union (EMU), though they seem to be content if they are well informed about the changeover scenario.
The survey also found that 98% of Maltese believed the country would adopt the euro currency by 2008….
1 June 2007. Support for Single Global Currency from Investors Daily Edge by Dr. Russell McDougal.
"Sooner or later, I believe we will see a global currency, likely a conglomerate of the dollar, euro, and Asian currencies. It may or may not be backed by anything of substance. Central banks no longer hold silver and their gold holdings are beyond suspect. Power is typically consolidated out of chaos.”
The article begins…
Vacation in Europe this summer and you’ll be shocked at what things cost. Today a dollar is worth about 0.74 euros, down sharply from about 1 euro four years ago. The fall has virtually unbroken since early 2006. In fact, the dollar has been losing value against many major currencies since early in the decade.
Most experts blame the U.S. trade and budget deficits, which cause Americans to send dollars overseas, increasing the amount of money in circulation that drives down the price.
The rate at which one currency is exchanged for another is governed by supply and demand in the 24/7 global currency markets, where an estimated $3 trillion changes hands every day through forwards, futures, spot trades and other transactions….
[emphasis added here.]
22 May 2007. “Dodge says single currency ‘possible’ ” by Barrie McKenna in the Globe and Mail.
The article begins…
WASHINGTON — Bank of Canada Governor David Dodge says North America could one day embrace a euro-style single currency.
But to get there, Canada, the United States and Mexico must first tear down barriers to the free flow of labour, which he pointed out yesterday have “gotten a bit thicker” in recent years.
Answering questions from the audience after a speech in Chicago, Mr. Dodge said a single currency was “possible.”
The idea of a common currency has long been a subject of curiosity, particularly among Canadian academics, who see it as a way to escape sharp gyrations in the exchange rate….
16 May 2007. from the Christian Science Monitor: “Many Countries – One Currency For kids: It’s common ‘cents’ – these countries share the same currency.” by Wendy Watson.
The article in "kidspace" begins…
Have any Euros in your pocket â€“ coins, that is? If you have traveled recently to Europe, to any of the 13 member countries of the European Union or a few smaller states that have adopted the currency, perhaps you do. The countries are Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia, and Spain.
All these nations except Slovenia, which adopted the euro earlier this year, have used the euro as their currency for about five years. It was introduced into circulation Jan. 1, 2002. Instead of all countries having their own coins and bank notes, as they used to, they now share a common currency.
9 May 2007. “Goodbye U.S. dollar, hello global currency” by Jerome R. Corsi in WordNetDaily.
The article, mostly about Benn Stei’s article in Foreign Affairs, begins…
The director of international economics at the Council on Foreign Relations has launched a scathing attack on sovereignty and national currencies.
Benn Steil, writing in the current issue of CFR’s influential Foreign Affairs magazine, says “the world needs to abandon unwanted currencies, replacing them with dollars, euros, and multinational currencies as yet unborn.”
3 May 2007. “Split Over Fees Hampers Move To Modernize Currency Trade” by Katie Martin in the Wall Street Journal.
The article begins…
— The foreign-exchange market is still suffering from data
overload after the board of currency-settlement network
CLS Bank International couldn’t agree on how to change its
fee structure if it moves to consolidate users’ trades.
The New York-based firm, which acts as the plumbing behind the $2.5 trillion-a-day global currency markets, has come under pressure from …
[Thus the WSJ has seconded the $2.5 trillion estimate for daily foreign exchange trading as was published in 2006 in The Single Global Currency – Common Cents for the World.]
29 April 2007. “The End of National Currency” by Benn Steil in Foreign Affairs magazine, April/May 2007.
Summary [from FA magazine]: Global financial instability has sparked a surge in “monetary nationalism” — the idea that countries must make and control their own currencies. But globalization and monetary nationalism are a dangerous combination, a cause of financial crises and geopolitical tension. The world needs to abandon unwanted currencies, replacing them with dollars, euros, and multinational currencies as yet unborn. [emphasis added on this website.]
Governments must let go of the fatal notion that nationhood requires them to make and control the money used in their territory. National currencies and global markets simply do not mix; together they make a deadly brew of currency crises and geopolitical tension and create ready pretexts for damaging protectionism. In order to globalize safely, countries should abandon monetary nationalism and abolish unwanted currencies, the source of much of today’s instability…
Since economic development outside the process of globalization is no longer possible, countries should abandon monetary nationalism. Governments should replace national currencies with the dollar or the euro or, in the case of Asia, collaborate to produce a new multinational currency over a comparably large and economically diversified area.
[See 17 July 2007 letter to Foreign Affairs from SGCA members, John Edmunds and John Marthinsen which states that the vast increase in European and worldwide asset values is a major reason to encourage currency unification.]
24 April 2007. “UNESCO Ambassador welcomes common currency proposal “ in the Sri Lanka Daily News.
COLOMBO: Madanjeet Singh, UNESCO’s Goodwill Ambassador and founder of the South Asia Foundation has welcomed President Mahinda Rajapaksa proposal to establish a common currency for South Asia.
In a letter to President Rajapaksa, Ambassador Madanjeet Singh has congratulated him for his proposal for a common currency for South Asia made at the recently concluded 14th SARRC Summit held in New Delhi.
Ambassador Singh’s letter states the Governing Council of the South Asia Foundation is happy at this proposal, because at their annual general meeting at UNESCO House, Paris, held recently, “they too had recommended a common currency called the ‘Sasia’, with a hope that it will become the anchor of economic stability and regional cooperation like the Euro.
23 April 2007 Public Opinion Poll in New Zealand and Australia: “Your Views: Should we have an Anzac dollar?” from the New Zealand Herald
The article begins…. (and two reader comments are included)..
A new poll says half of New Zealanders want a common transtasman currency.
The UMR poll reveals 49 per cent of New Zealanders favour a shared dollar, against 41 per cent of Australians.
This forum debate has now closed. Here is a selection of your views on the topic….
Rodriguez de Lima Souza
Ultimately there is no need for separate currencies: one single global currency would do nicely, with prices set by demand for products and services. On the way to get there, neighbouring countries should team up and combine currencies. For practical reasons, we should also include the Pacific islands in the Australian dollar zone. Later on, we would need an Asian dollar, which would have all of South-East Asia and our region covered. And so forth…
I am not in favor of a trans Tasman currency. I am however in favor of a global currency. It is so simple to go Global. All the world leaders need to do is introduce a global currency valued on the American dollar. Give each Yank a dollar for dollar swap. Give the Aussies a swap at a rate that depicts the dollars value, Give the Kiwis a swap at a rate that depicts our dollars value. Do the same to the rest of the world. Say a American earned $1000 a week, the Aussie would earn $805.41, The Kiwi would earn $661.71. Each country would be able to purchase goods at a global dollar value from any other country. Where is the problem in going global? There is no problem, the answer is so simple.
22 April 2007 10-member Economic Cooperation Organization in Asia, “ECO Central Banks Network (ECBN) soon launched: Governor SBP “ from International News Network
The article begins…
Karachi: Governor State Bank of Pakistan Dr. Shamshad Akhtar has announced to set up an ECO Central Banks Network (ECBN) aiming at promoting banking in Asian countries and enhancing mutual interests in member states of Economic Cooperation Organization (ECO).
She said this while addressing the first meeting of the heads of Central Banks of Economic Cooperation Organization (ECO) Member States here on Monday.
Dr. Shamshad said that the bank would star working from June 2007 with the name of ECO Trade Bank.
This network would focus on exchange of experiences and information on economic and monetary policy, greater cross border cooperation on Anti-money laundering and explore opportunities for harmonization of standards and systems, where feasible.
She said that Pakistan, Iran and Turkey had approved the establishment of Trading Bank, while initiative work on the project would be started very soon.
Governor SBP stressed the need for setting up a Monetary Union of Asian countries in line with European Union for economical progress in the region.
[The member countries are: Iran, Pakistan and Turkey, Islamic Republic of Afghanistan, Republic of Azerbaijan, Republic of Kazakhstan, Kyrgyz Republic, Republic of Tajikistan, Turkmenistan and Republic of Uzbekistan. See ECO website at http://www.ecosecretariat.org]
22 April 2007 Nigerian President “Obasanjo calls for common currency in Africa” in Vanguard Online.
The article begins…
President Olusegun Obasanjo has called for the introduction of a common currency in Africa to enhance trade relations in the continent. Speaking while inaugurating the Enugu branch of the Central Bank of Nigeria (CBN) today in Enugu State, Obasanjo said this had become necessary in order to eliminate trade barriers created by the absence of a common currency.
15 April 2007. Sri Lankan Headline: “G7 mulls global currency, hedge funds, amidst Wolfowitz scandal” from Lanka Business Online.
[The headline was inaccurate, but some day, the G7 or G8 or G-whatever WILL, in fact, contemplate a Single Global Currency, and the sooner the better.]
8 April 2007 “One World Currency and Why It Matters” from Mark Warner’s Blog.
Many world economists see a time in the not so distant future when National Currencies are merged into one or a few. It makes sense considering the massive electronic flows of the money. Of course some nations are very concerned with this as no one wants to be on the losing end of the stick and get trapped with mass devaluation or hyper inflation after the switch-over.
When talking about One World Currency or the move closer towards that there are many things to consider indeed. Sure that makes sense eventually to have only a few or one currency in the long-term. For instance; maybe an Asian Dollar, Euro w/Australia/Japan/England joining in, US Dollar used throughout Western Hemisphere, Middle East-African Dollar. Then merge either Asian Currency with Euro or US with Asia, then when you have 3 merge them to one. Have supercomputers monitor the flow of money to insure stability?
This would be the best for humanity in the long run, although there are issues with a Global Currency Collapse in that case right? An "Earth Unit" or "Dollar" would make long-term sense. Earth Unit might even be better and more stable for an Earth Citizen, it also crosses cultural divides of what types of things people value. What are your thoughts on One-World Currency?
These are very tricky discussions when it comes to a nation’s currency, as everyone wants control. However, with World Trade things are moving faster and closer together and the debt on the currency needs to be set to the flow of the currency and not specifically to the nation borrowing the money.
we will have continuous mini-economic collapses of emerging
nations and currency crashes of first world nations. That
does not serve the people or the bankers and certainly adds
to the changes of civilization collapse. In reality no one
wishes to discuss this, but in the future something must
be done to shore up the risks being created in the present
period, abstractly thinking of course."
30 March 2007. “Cypriots oppose Cyprus entry to EMU by 51%” in the Financial Mirror, Cyprus.
The article begins….
Less than a year before Cyprus’ entry to the EU’ Economic
Monetary Union (EMU), Cypriots oppose by 51% to the adoption
of the Euro, the EU’s single currency, according to ”Cyprusbarometre
2006” survey, carried out by RAI Consultants on behalf
of the Laiki Group.
According to the survey Cypriots oppose by 51% the accession of Cyprus to the EMU, recording an increase of 10% compared to 41% of the 2005 Cyprusbarometre.
Furthermore, as Cyprus is getting closer to the date of accession to the EMU on January 1 2008 Cyprus, Cypriots disagree with the EU single currency. In 2002 Cypriots were opposing the Euro only by 25%, whereas this figure rose steadily to 27% in 2003, 45% in 2004, 49% in 2005 and 54% in 2006.
The Cypriots believe that Cyprus’ entry the EU will have negative effects to the unemployment rate and inflation with 79%, followed by the competitiveness of the economy with 67%, financing cost with 60%, the fiscal deficit with 57% and tourism with 27%.
30 March 2007. Book about North American Monetary Union on Short List for $35,000 Donner Prize in Canada. “Ninth annual Donner Prize shortlist announced “
Excerpts from the press release….
TORONTO, March 29 /CNW/ – The finalists for the 2006/2007 Donner Prize, the award for best book on Canadian public policy, were announced today by Allan Gotlieb, Chairman of the Donner Canadian Foundation. Mr. Gotlieb said, “Last year, the Toronto Star wrote ‘Donner-winning books tend to have far-reaching influence on government and industry.’ This year’s first-rate group of finalists all tackle key issues that we hope will have policy makers taking notice.”…
Many believe that Canada’s deepening economic integration with the United States and the worldwide trend towards currency blocs will eventually lead to a North American monetary union. In this excellent analysis of Canadian exchange rate politics,[Towards North American Monetary Union? The Politics and History of Canada’s Exchange Rate Regime] Eric Helleiner challenges this view and finds little support in the U.S. for the concessions that would be necessary to make a North American monetary union palatable in Canada. Towards North American Monetary Union? is a fascinating book that explores Canada’s unusually strong commitment throughout the twentieth century to a floating exchange rate for its national currency – a commitment that Heilleiner argues is likely to endure. Eric Helleiner is CIGI Chair in International Governance in the Department of Political Science, University of Waterloo.
(In April 2007, it was announced that the book won the Donner Prize. See “2006/2007 Donner Prize winner announced”)
28 March 2007. “Reign of the Dollar” by Prof. William Silber in the New York Sun.
Excerpts from the article…
Is the dollar about to lose its dominance as the international currency to the euro?
Not any time soon, despite the dollar’s vulnerability.
Today the euro lacks the credibility to unseat the dollar.
America’s record of free capital markets, the rule of law, and the maintenance of price stability strengthens the dollar’s role as the unparalleled safe haven currency.
In response, Morrison Bonpasse wrote the following comment: “We should begin planning for a Single Global Currency”
Instead of a continuing struggle to see which national or regional currency is THE preeminent international currency, the world should begin planning for a Single Global Currency. The euro is now used by 13 countries in the largest, most successful monetary union in history, and the number will soon grow to 22. Why not develop a monetary union for the 192 members of the United Nations and eliminate the need for foreign exchange reserves, eliminate the problem of imbalances of payments, eliminate the annual $400 billion in foreign exchange transaction costs, and eliminate the risk of currency crises? The goal of the Single Global Currency Assn. is a Single Global Currency, managed by a Global Central Bank within a Global Monetary Union by 2024, the 80th anniversary of the 1944 Bretton Woods Monetary Conference. See www.singleglobalcurrency.org. We should begin planning now.
27 March 2007. Martin Wolf writes in the Financial Times: " The pain in Spain will follow years of rapid economic gain"
Excerpts from the article….
Do current account deficits matter inside a monetary union? The answers are “no” and “yes”: no, because there cannot be a currency crisis; and yes, because there cannot be a currency crisis. Where unsustainable divergences in competitiveness emerge, adjustment occurs largely through changes in relative nominal costs, particularly of labour. The bigger the required adjustment, the greater the pain….
For Spain, better times for the eurozone presage a much bigger challenge to itself. Adjustment to a different and more sustainable path will be required. A decade or so from today we should have a far better idea than today of how far one of Europe’s hitherto most successful economies is able to thrive within the straitjacket of the currency union.
25 March 2007. “Reverse Foreign Aid” by Tina Rosenberg, New York Times Magazine.
Excepts from the article…
For the last 10 years, people in China have been sending me money. I also get money from countries in Latin America and sub-Saharan Africa — really, from every poor country. I’m not the only one who’s so lucky. Everyone in a wealthy nation has become the beneficiary of the generous subsidies that poorer countries bestow upon rich ones. Here in the United States, this welfare program in reverse allows our government to spend wildly without runaway inflation, keeps many American businesses afloat and even provides medical care in parts of the country where doctors are scarce….
Increasing the transfer of capital from rich nations to poorer ones is often listed as one justification for economic globalization.
Historically, the global balance sheet has favored poor countries. But with the advent of globalized markets, capital began to move in the other direction, and the South now exports capital to the North, at a skyrocketing rate. According to the United Nations , in 2006 the net transfer of capital from poorer countries to rich ones was $784 billion, up from $229 billion in 2002. (In 1997, the balance was even.) Even the poorest countries, like those in sub-Saharan Africa, are now money exporters.
How did this great reversal take place? Why did globalization begin to redistribute wealth upward? The answer, in large part, has to do with global finance. All countries hold hard-currency reserves to cover their foreign debts or to use in case of a natural or a financial disaster. For the past 50 years, rich countries have steadily held reserves equivalent to about three months’ worth of their total imports. As money circulates more and more quickly in a globalized economy, however, many countries have felt the need to add to their reserves, mainly to head off investor panic, which can strike even well-managed economies. Since 1990, the world’s nonrich nations have increased their reserves, on average, from around three months’ worth of imports to more than eight months’ worth — or the equivalent of about 30 percent of their G.D.P. China and other countries maintain those reserves mainly in the form of supersecure U.S. Treasury bills; whenever they buy T-bills, they are in effect lending the United States money. This allows the U.S. to keep interest rates low and Washington to run up huge deficits with no apparent penalty.
But the cost to poorer countries is very high. The benefit of T-bills, of course, is that they are virtually risk-free and thus help assure investors and achieve stability. But the problem is that T-bills earn low returns. All the money spent on T-bills — a very substantial sum — could be earning far better returns invested elsewhere, or could be used to pay teachers and build highways at home, activities that bring returns of a different type. Dani Rodrik, an economist at Harvard’s Kennedy School of Government, estimates conservatively that maintaining reserves in excess of the three-month standard costs poor countries 1 percent of their economies annually — some $110 billion every year. Joseph Stiglitz, the Columbia University economist, says he thinks the real cost could be double that.
In his recent book, “Making Globalization Work,” Stiglitz proposes a solution. Adapting an old idea of John Maynard Keynes, he proposes a sort of insurance pool that would provide hard currency to countries going through times of crisis. Money actually changes hands only if a country needs the reserve, and the recipient must repay what it has used.
[A better answer is the Single Global Currency, which would eliminate entirely the need for foreign exchange reserves, and also remove the incentive to move money from high currency risk countries to lower currency risk countries. See SGCA Letter to the Editor in response.]
23 March 2007. Letter to the Editor, Portland (ME) Press Herald: “Global trade needs common cents”
Single Global Currency Association
Newcastle [Maine, US]
23 March 2007. Mark Leonard predicts euro as global currency.
Mark Leonard is the author of "Why Europe will Run the 21st Century." He recently commented on an International Herald Tribune article, “Quotes on Poll,” about a European Union 50th Anniversary poll, that
"This poll should cheer them up. It shows that Europe’s citizens expect the EU to repeat its trick of peaceful regime change in the East through enlargement — creating a eurosphere that covers a quarter of the globe. They think Europe could help save the planet by freeing itself from fossil fuels. And the euro could become a global currency. Instead of creating presidents and constitutions, EU citizens expect the EU to become a transformative power on the world stage."
23 March 2007. Indian Prime Minister: “Time not ripe for common Asian currency” from the Times of India.
The article begins….
NEW DELHI: India on Friday said a common currency for Asian countries, similar to the Euro for European nations, was still a few years away and would require more coordinated efforts on part of all the participants.
“I do not believe that time has arrived for the common ASEAN currency like Euro,” Prime Minister Manmohan Singh said at an event here.
A common Asian currency would require more coordinated efforts and may become a reality in near future, he said.
Apart from ASEAN members, the Asian Development Bank has also considered a plan to create a regional currency unit –before introducing an actual currency — that could bring down exchange rate volatility among member countries and give a momentum for the regional bond market.
Despite its potential benefits to ASEAN members and Japan, China, South Korea as well as countries like India, the idea of common Asian currency has not made much progress due to various technical and political obstacles.
Singh pointed that common Asian currency would require
coordinated efforts and removal of various obstacles.
[The good news is that the highest leaders of Asia are considering the issue.]
16 March 2007. “A customs union among Islamic countries? What good news” by Prof. MUSTAFA ACAR in Today’s Zaman, Istanbul.
Excerpts from the Op-Ed….
An interesting item about some prospective economic cooperation projects among Islamic countries appeared in the press a few days ago.
"OIC member states took a first step towards a ‘customs union’” (Zaman, March 12, 2007): The piece reported that the Organization of the Islamic Conference (OIC) was preparing to initiate a "preferential trade” regime among its member states from Jan. 1, 2009. One step further down the road was customs union and even a “common market.”
Common market, which adds free movement of production factors — labor in particular — across member states on top of the customs union. Monetary union implies adoption of a common currency by the member states in addition to the common market. Finally economic union means adoption of common fiscal, monetary, financial and commercial policies and common rules of competition within the region.
11 March 2007 “Global Economic Cooperation or Bust” by By Jose Antonio Ocampo, United Nations Under Secretary General, and Rob Vos, Director Development Policy and Analysis Division of the U.N. Dept. of Economic and Social Affairs.
Excerpts from the article:
According to estimates by the United Nations, the global economy expanded by 3.8% last year, continuing the strong performance recorded since 2003. Led by China and India, developing countries were prominent among the best performing economies, expanding by 6.5% on average in 2006. But can this apparently benign pattern of global growth be sustained, particularly since growth has been accompanied by ever-widening global financial imbalances?
To be credible as a mediator of this mechanism, the IMF itself would need reform, including a substantial change of voting power to bring the influence of developing countries in line with the weight they carry nowadays in the global economy. Modest steps in that direction were taken during the IMF meetings in Singapore last September.
Such a new platform should also be used to work towards structural reform of the international monetary system aimed at reducing its excessive reliance on the US dollar as a reserve currency. Such reforms should work towards developing a multilaterally agreed multi-currency reserve system or even, in the longer term, a world currency based on the Special Drawing Rights issued by the IMF.
The mere possibility of an imminent hard landing for the dollar – and with it, for the US and world economy – should be alarming enough to mobilize concerted action. Coordination will surely deliver more satisfactory outcomes than what any one country can achieve on its own.
6 March 2007 “Dollars to Spare in China’s Trove” by Keith Bradsher in the New York Times.
Excerpts from the article…
HONG KONG, March 3 — In the insular world of China’s central bank they are known as the Three Xiaos, three women with similar names who oversee the greatest fortune ever assembled: China’s more than $1 trillion in foreign exchange reserves….
Public pressure is mounting on the central bank, the People’s Bank of China. In postings on Internet message boards in China and in conversations among educated urban Chinese, critics suggest that the central bank should earn higher profits from its vast hoard — for instance, by taking more risk and investing in stocks — and use some of it to help a nation where most workers still earn less than a tenth of the wages of the typical American.
[The Single Global Currency Assn. hopes that such thinking will soon extend to asking why the world isn’t doing more with the approximately $3 trillion in reserves worldwide – which will be freed for other uses when the world moves to a Single Global Currency.]
15 February 2007. “FIRMS VOTE IN FAVOUR OF COMMON AUSTRALASIAN CURRENCY” on New Zealand radio.
The entire segment…
A new survey from international business advisory firm Grant Thornton has found a clear majority of local firms believe the time has come to have a common currency with Australia.
It says 60% of the 150 respondents were positive about the idea of a merged currency, while 38% were against.
Among those who favoured the common currency idea, most thought this should happen by 2010, but 23% thought it should go ahead even earlier.
Thornton spokesman Peter Sherwin believes these findings
will give impetus towards more commonality in the trans-Tasman
business world. He says a common currency could ease a lot
of transactions and aid trade in favour of New Zealand exporters.
12 January 2007. “EAC for One currency by 2009” by Emmanuel Kola/kna, Kenya Broadcasting System
East African Community (EAC) Minister John Koech says the Community will have one currency in three years time.
Koech says the EAC Committee on Fiscal and Monetary Affairs is working on a roadmap to have one currency for East Africa by December 2009.
Koech says East African states have agreed on methods to integrate the three economies to pave way for a sustainable monetary union.
Consequently, Koech says the EAC Secretariat has commissioned a comprehensive study on the EAC common market.
He said discussions and consultations on the EAC common market have been launched and a task force has been formed in partner states to start negotiations.
The Minister says the common market will enable the free movement of people, labour and services.
The EAC customs union protocol was signed on March 2nd, 2004 and launched on January 1st 2005 .
According to the treaty for the establishment of the EAC, the roadmap towards a full integration begins with a customs union, a common market, a monetary union and ultimately a political federation.
23 December 2006. “Cyprus plans to apply to join EU monetary union next Spring” from the Peoples’ Daily, online.
The article begins…
Cyprus plans to apply to join the EU’s Economic and Monetary Union (EMU) next February or March, a key step to join the eurozone in 2008, Cyprus News Agency reported on Friday.
Cypriot Finance Minister Michalakis Sarris was quoted as saying that the country will state the reasons which show that it is ready to join the eurozone in its application for EMU.
The application will be assessed by competent organs in the European Commission by next June, and then submitted to the European Council for ratification.
20 December 2006. “Mechanism To Safeguard Stability Of East Asian Currencies” by Tengku Noor Shamsiah Tengku Abdullah at the Malaysian National News Agency, www.bernama.com.
The article begins…
KUALA LUMPUR, Dec 20 (Bernama) — Central banks in Asia should set up a mechanism for consultations on exchange rate policy so as to safeguard the stability of their currencies, according to a think tank.
The Malaysian Institute of Economic Research (MIER), in making the suggestion, said that such a move could also start the ball rolling on the possibility of a common currency.
Its executive director Professor Emeritus Dr Mohamed Ariff Abdul Kareem said a coordinated exchange rate policy could minimize instability among East Asian currencies.
“For example, if one country wants to buy US dollar, all the East Asian countries must go with that decision,” he told Bernama in an interview.
Mohamed Ariff said there was a need to institutionalise the process of consultations for all East Asian countries, a move which could lead to the possibility of having a common currency.
Asian currency is a very interesting proposal. It is not
new and we have been talking about it for years. I think
it is a very bold move but East Asia is not ready for it
yet,” he said.
6 December 2006. “Single currency not in ASEAN Summit agenda” the People’s Daily
Single currency would not be a topic at the Association of Southeast Asian Nations (ASEAN) Summit meetings, an official said on Wednesday in Cebu.
“Monetary integration is not on the table,” Philippine Foreign Affairs Assistant Secretary Louie Cruz told a press conference at the Cebu International Convention Center, one of the major meeting venues for the 12th ASEAN Summit.
Instead, the ASEAN leaders would likely discuss more extensively ways and means to boost regional economies through the free trade zones scheme, according to Cruz, who added that the agenda of the leaders meeting include social-cultural, anti- terrorism, and economic concerns.
“There would be economic agreements to support previous agreements on the ASEAN Free Trade Agreement or AFTA”, he said.
Ambassador Victorino Lecaros, spokesman of the Summit, also said it is impossible at this time for the ASEAN member states to adopt a common currency system as there are several concerns derived from political and economic diversity that must be addressed before the ambitious proposal could take off.
The idea of a single currency for the ASEAN was first raised during the Hanoi Action Plan in 1997 when the region was reeling from a financial crisis.
4 December 2006. “Push for common Anzac currency” by Tim Dick, Sydney Morning Herald.
Excerpts from the article…
Australia and New Zealand should work towards a full union, or at least have a single currency and more common markets, an Australian federal parliamentary committee says.
It wants a closer relationship between the six Australasian colonies that formed the Commonwealth in 1901, and the errant one that chose to go it alone.
The committee chairman, the Liberal Peter Slipper, said the world had changed since then.
Other MPs on the committee include Malcolm Turnbull, Nicola Roxon and Daryl Melham. Their report said: “While Australia and New Zealand are of course two sovereign nations, it seems to the committee that the strong ties between the two countries – the economic, cultural, migration, defence, governmental and people-to-people linkages – suggest that an even closer relationship, including the possibility of union, is both desirable and realistic.”
It wants a joint committee between the two parliaments to report on the possibility of union….
The committee also said a common currency should be “actively” pursued, despite the Treasurer, Peter Costello, and his New Zealand counterpart, Michael Cullen, saying last year that it was not on the agenda.
Mr Costello does not want to get rid of the Australian dollar, and Dr Cullen does not want to adopt it, but the New Zealand Government looks more kindly on a common Anzac currency.
3 December 2006. “The tourist and the euro” in the Malta Independent, by Josephine Rizzo, Information officer of the National Euro Changeover Committee.
Excerpts from the article…
With the adoption of the euro, targeted for 1 January 2008, Malta will be joining a monetary zone of more than 300 million inhabitants that represents the leading tourism destination in the world.
Economic and monetary union has enhanced competition in the eurozone, provided greater price transparency, stimulated cheaper cross-border payments and eliminated foreign exchange risks. These factors have contributed to the reduction of the costs of travelling in the single currency area…
The euro will facilitate the life of tourists visiting our islands, as it will make travelling easier. Malta will certainly attract more visitors from the eurozone because exchange rate costs will be eliminated. Once the euro becomes our official currency, tourists will no longer be burdened with foreign exchange transactions and costs, and the divergences between buying and selling rates.
The cost and complexity of dealing with a different currency on arrival at our shores will cease to exist. It will be an absolute pleasure for tourists arriving from the eurozone to know that they can use the money in their pockets and that they do not have to queue in banks to change their money to the local currency. It is also worth noting that tourists’ cash can lose up to two-thirds of its value without making a single purchase, simply through currency transactions.
Consequently, tourists arriving in Malta from the euro area will have more money in their pockets due to the savings related to currency exchange transactions and costs. It is therefore up to the individual to decide how to spend that extra cash – be it in the form of choosing more expensive accommodation, or opting for a longer stay, or just simply spending more money while on holiday.
In actual fact, the euro will facilitate more spending, since a high percentage of our visitors already use the euro in their home country and they will therefore be familiar with the retail value of our goods and services. This means that it will be much easier for tourists from the eurozone to compare prices in Malta with prices either in their home country or in other euro area countries.
With the introduction of euro notes and coins in Malta, visitors from the eurozone will immediately benefit from the simplifications resulting from the adoption of the single currency. When European tourists travel to another European country, they obviously prefer to deal in euro rather than in a foreign currency. As from January 2008 they will indeed find it very convenient to pay in euro when they visit our islands.
3 December 2006. “Euro booklet to be distributed to all secondary schoolchildren” in the Times of Malta – showing what can be done to prepare a population for currrency changeover.
Excerpts from the article…
Within the next few weeks, 30,000 booklets containing information about the euro will be delivered to all secondary school students, said Education, Youth and Employment Minister Louis Galea yesterday.
Speaking to students at Dun Guzepp Zammit Brighella Boys Junior Lyceum Hamrun, the minister said this is the first initiative in a series that will lead to schoolchildren being prepared for the currency changeover on 1 January 2008.
He said that after the EU accession, students are eager for the next move – to join 12 other countries who share a common currency, He added that this will bring more work, investment and price transparency to the country.
National Euro Changeover Committee (NECC) chairman Joseph FX Zahra told the students that in 13-months time they will be witness to a historic step for the country. He recalled his own experience when, in 1972, Malta eliminated the pound sterling and adopted the decimal system.
Mr Zahra said NECC will be taking part in the next Skola Sajf and that Education 22 is airing a series of programmes aimed specifically at helping students cope with the change….
1 December 2006. In response to Washington Post columnist Robert Samuelson’s column, ” ‘Fair Trade’ Foolishness”, SGCA President Morrison Bonpasse posted the following comment on the Washington Post website:
addition to avoiding "Fair Trade" foolishness,
the U.S. must avoid "Currency Foolishness" by
reducing its twin deficits in Federal spending and international
trade. As Mr. Samuelson notes, our U.S. dollar is a keystone
of international trade, but that status is slipping, and
our deficits are greasing the slippery slope.
The U.S. should initiate, or join, research and planning efforts for a new Single Global Currency to be managed by a Global Central Bank within a Global Monetary Union.
Such a Single Global Currency would eliminate hundreds of billions of dollars in foreign exchange transaction costs, eliminate the need for expensive foreign exchange reserves, eliminate the problem of imbalances of payments for every country and eliminate the risk of currency crises.
As the world moves inexorably toward a Single Global Currency through the expansion and creation of regional monetary unions, the question will be whether the road to a Global Monetary Union will be smooth, with planning and research, or rough with crises and collapses.
Paraphrasing Mr. Samuelson, we must decide whether to hold onto the ephemeral symbolism of the formerly mighty dollar or embrace the benefits of a future and stable Single Global Currency.
30 November 2006. “Almunia speech on euro changeover in Cyprus” from the Financial Mirror, Cyprus
Excerpts from the speech by EU Economic and Monetary Affairs Commissioner Joaquin Almunia at the “EMU Governance and Euro Changeover” Conference
As Cyprus draws closer to its target date [1 Jan 2008?] for joining the euro-area, this conference provides an excellent opportunity to reflect on the broad range of issues that require consideration ahead of euro adoption…
This assessment reflects notable progress in the area of public finances. The budget deficit has been reduced by four points from 6.3 percent of GDP in 2003 to 2.3 percent of GDP in 2005, and the government debt has been brought onto a declining trend. As a result, last July the Council decided to abrogate the Excessive Deficit Procedure. More good news came at the beginning of this month, when the Commission forecast for the current year a further reduction of the deficit to just below 2 percent of GDP and a further decrease of the debt. This indicates that Cyprus is on the right budgetary track, although the long-term sustainability of public finances remains a source of concern.
This economic assessment indicates that Cyprus is well on its way to meeting the Maastricht convergence criteria. Nevertheless, as I have stressed on many previous occasions, countries entering the euro area require strong budgetary policies and structural reforms that produce well functioning markets. Since national monetary and exchange rate policies will no longer be available to euro-area members, candidate countries must ensure sustainable convergence in order to maintain competitiveness once in EMU. Cyprus will be no exception to this rule….
[See also, the Associated Press article in the Houston Chronicle article about this speech and the 1 January 2008 target date for Cyprus and the current perception by most Cypriots that the euro will not be good for them: “EU Official: Cyprus on Track on Euro”]
30 November 2006. On the implementation of the euro in Hungary, by the head of the Hungarian National Bank “Jarai: convergence program will lead Hungary down the wrong euro path” by Duncan Welch in the Budapest Sun.
Excerpts from the article…
ACCORDING to Zsigmond Jarai, chairman of the National Bank of Hungary (MNB), the government’s current convergence program will not result in euro accession.
Speaking last Wednesday (Nov 22), Jarai, whose mandate as MNB chairman expires in March, told a business conference focusing on inflation, growth and balance, that in the past, "Hungary was expecting the introduction of the euro in 2007, then in 2008 and in 2010, but there is currently no date that can be projected," based on the government’s current program.
According to a poll by news agency Reuters, 30 analysts earmarked 2014 as the earliest date Hungary could join the euro, using the latest projected data for all of the 10 new EU members and accession countries Bulgaria and Romania….
[See the Reuters article, below, at 24 November 2006.]
28 November 2006. “ECB’s Liebscher says euro referenda out of question” by Boris Groendahl and Stella Dawson, Reuters, in The Times of Malta.
Excerpts from the article…
A Polish referendum on whether to join the European Union’s single currency is not an option as there is no “opting out” of the euro, European Central Bank Governing Council member Klaus Liebscher said.
Mr Liebscher said in an interview he was disappointed by the dwindling reformist zeal of new eastern member states of the 25-nation bloc, saying they had been closer to joining the euro two years ago than they are now…
Mr Liebscher said the new member states knew what they signed up to when they entered the union – a duty to join the euro and to work towards meeting the Maastricht criteria for entering it: low inflation, a stable currency, a budget deficit of less than three per cent and debt of less than 60 per cent of GDP….
28 November 2006. Letter to the editor of the Nottingham Evening Post(England) by U.K. Single Global Currency Chapter Chair Collis Gretton:
Ivor Johns rejoices in telling us a Commission report forecasts the EU’s decline as a global economic power and that the eurozone share of World Gross Domestic Product and World Trade continue to reduce. Further, the Centre for European Reform says the Single Currency risks becoming a source of economic dislocation, (letter, 27 November).
Now for some perspective.There is a growing slow down in the underperforming US economy and the current prospects for the dollar – dire. Should the world’s reserve currency collapse a global recession will be triggered. Without that glum scenario America’s share of the world’s GDP and trade is still forecast to decline while the economies of China and India power ahead. Yet in 2004 China was overtaken by Germany as the world’s leading exporter and the currency markets seem entirely confident the Euro will remain stable. The firm Single Currency is supported by the strength of the European economy and possible higher interest rates because of the Central Bank’s vigilance on beating inflation.
The Nobel Prize winner Robert Mundell is called the “godfather of the euro” because the idea for a European Common Currency received a major boost with his 1961 article “A Theory of Optimum Currency Areas”.
In a rapidly changing world economy the need for reserve currency stability could bring about a link between the dollar and the euro as advocated by Mundell himself. A giant leap towards a world currency which he saw as the ideal. One size fits all, after all.
27 November 2006. “Euro introduction to help solve Cyprus problem?” in the Financial Mirror, Cyprus
Excerpts from the article…
The introduction of the euro in Cyprus , planned to become legal tender from January 2008 provided Cyprus meets the economic criteria by June/July 2007 should not be seen as an important economic and financial event, but also as a possible solution that may help in efforts to solve the Cyprus problem.
“The euro adoption is not a pure financial event, but it may also help efforts to solve the national problem, as both sides will have one common currency, the euro, which by itself will solve so many other problems,” said Papadopoulou.
Experts generally agree with this assessment.
Finance Minister Michalis Sarris told a conference on reunification efforts that the euro could be a unifying factor. “If we see what we are able to do right now, imagine what we could do under reunification if we are sensible,” he said.
Dr George Kyriacou, Assistant Manager of the Department of Economic Research at the Central Bank, said joining the eurozone was expected to have an overall positive impact on the economy of Cyprus , but would also contribute to the improvement of the general climate.
general, the existence of the euro contributes to the building
and fostering of a European identity. By adopting the euro,
Cyprus becomes a n integral and dynamic part of Europe and
participates more actively in the process of European integration.
This is for the benefit of not only Greek Cypriots, but
also Turkish Cypriots, who also have European-oriented aspirations,”
25 November 2006. European Commission issues report on the Euro. See “Articles – non-academic”: The Reuters article: “EU calls for euro zone reforms, tighter budgets” and the Report itself: The EU Economy 2006 Review
Excerpts from the Reuters article…
BRUSSELS, Nov 22 (Reuters) – Countries using the euro currency should accelerate structural reforms and consolidate public finances to make the single currency area work better, the European Commission said on Wednesday.
In a report on the 12-nation euro zone, the European Union executive also called for deeper integration of financial markets and warned politicians not to use the euro as a scapegoat for national economic problems….
Action is needed. The adjustment in the euro area has been slower than we would like and we cannot ignore this fact. We need to promote more structural reforms,” EU Monetary Affairs Commissioner Joaquin Almunia told a news conference….
24 November 2006. Survey of financial experts: “Romania, Bulgaria to beat Hungary on euro track” from Reuters on the Hungarian "Portfolio" website.
excerpts and a table…
Reuters surveyed the analysts for their views on when the 10 countries which joined the European Union in 2004, and also Bulgaria and Romania, are likely to adopt the euro and when the EU will admit new members.
The poll, taken Nov 20-24, also asked what euro parity rates analysts expect the currencies of Poland, Hungary, the Czech Republic, Bulgaria and Romania to adopt in joining ERM-2, and their views on EU entry for Serbia and Turkey.
what year do you expect the following countries to enter
Europe’s monetary union (i.e. formally adopt the euro)?
24 November 2006 “Gulf states on track for single currency despite recent concerns” from Reuters, in the Boston Globe.
Excerpts from the article…
DUBAI, United Arab Emirates — Gulf Arab states are on course to create a single currency in the world’s top oil exporting region by 2010, despite concerns raised last week by at least one participant….
A Saudi newspaper said the Gulf Cooperation Council planned to urge Gulf leaders at a December summit to stick to the 2010 deadline.
The six countries have compelling reasons to press on with integration and are more closely linked in many ways than the states of the euro zone, said Richard Fox, a senior director, sovereign group at Fitch Ratings.
“At the end of the day they are all pretty close to a common currency because they are all linked to the dollar. It makes more sense for the GCC to do this than the EU,” he said.
22 November 2006. “Keynes v Friedman: the clash of economic titans ends in draw” by Martin Wolf in the Australian News (FT Business)
On the occasion of the death of Milton Friedman…
JOHN Maynard Keynes, who died in 1946, and Milton Friedman, who died last week, were the most influential economists of the 20th century.
Since Friedman spent much of his intellectual energy attacking the legacy of Keynes, it is natural to consider them opposites. Their differences were, indeed, profound. But so was what they shared. More interesting, neither won and neither lost: today’s policy orthodoxies are a synthesis of their two approaches….
The vagaries of floating exchange rates seem to cry out for yet another experiment in monetary integration, perhaps even a stab at a world currency. The march of technology may even make money redundant as anything more than a unit of account.
16 November 2006 Letter to the editor of the Leicester Mercury (U.K.) by U.K. Single Global Currency Chapter Chair Collis Gretton:
Roger Helmer’s argument on the “failing” euro, (Mailbox, 16 Nov) comes as no surprise.The late economist Milton Friedman was no lover of the single currency either for he opposed monetary union in 1999 and influenced the economic philosophy of Margaret Thatcher among others. However, brilliant economists tend somewhat to disagree and Paul Volcker chair of the Federal Bank from 1979 until 1987 has said ” A global economy requires a global currency”.
The stunningly successful launch of the euro currency has been
observed with great interest around the world and there are now plans for monetary unions modelled on that of the euro-zone.
Six countries of the Gulf Cooperation Council are on schedule for
2010. Other monetary unions are being planned or considered
in Eastern Europe, Asia, and Africa.
The euro is no more failing than the weak American dollar. In fact, because of huge U.S.trade imbalances Asian banks are carefully but prudently switching their whopping currency reserves from the dollar into the euro and a basket of other currencies. This way a country’s economy is less exposed to the effects of a dollar crash, should it occur. A crash in the value of the world’s reserve currency is to be avoided at all costs. Otherwise we get a global recession and widespread unemployment.
16 November 2006 “Milton Friedman, Nobel Prize-Winning Economist, Dies” by Vivian Lou Chen, Bloomberg
The beginning paragraph and the excerpt of the article relating to the European Monetary union, which he opposed….
Nov. 16 (Bloomberg) — Milton Friedman, the Nobel laureate economist who shaped the philosophies of Ronald Reagan, Margaret Thatcher and successive Federal Reserve chairmen, died of heart failure today, his daughter Janet said. He was 94…
He opposed one form of economic integration: the monetary union of 11 European Union nations in 1999 that resulted in the replacement of national currencies with the euro. Greece joined in 2001, bringing the number to 12.
As Europe was preparing for the euro’s introduction, Friedman told German weekly Die Zeit in September 1997 that the euro would make conflict more, not less, likely.
The continent’s many borders and diverse cultures make a single currency unit unfeasible, as Europeans are more dependent on their own country rather than the "common market" or the idea of "Europe.” The introduction of the euro would turn economic shocks into political conflict, Friedman said.
The euro went ahead as planned and the introduction of notes and coins two years later went off without a hitch….
16 November 2006 “Asian currency unit still a dream” Opinion by Sun Dongsheng in the Peoples Daily.
The piece, though skeptical, begins…
It was recently reported that the Asian Development Bank would formulate a conceptual currency unit based on a package of Asian currencies in order to promote regional economic cooperation and development. This drew a series of reports on an “Asian Yuan”.
The idea of an Asian Yuan, to be used throughout the region, was first proposed by former Malaysian Prime Minister Mahathir Mohamad in 1997 at the ASEAN summit. In 2003, the “Father of the Euro”, Nobel Prize in Economics laureate, Robert Mundell, also proposed establishing a common currency in Asia, such as an “Asian Yuan”. In 2005, at the Bo’ao Asian Forum Annual Meeting in Hainan province, Hong Kong SAR then acting chief, Donald Tsang, spoke of an “Asian Yuan”. However, dreams do not take the place of reality. An Asian Yuan looks to remain a dream for the foreseeable future. Why?…
15 November 2006 European Union considers altering criteria for EMU accession.
Excerpts from the European Union Press Release “Improving the performance of the euro area” …
On the functioning of the Economic and Monetary Union, Parliament agrees that disparities in growth and inflation rates within the euro area are increasingly due to structural reasons. Welcoming Slovenia to the euro, MEPs ask the Commission and ECB to evaluate whether it is justified to use different price stability criteria for accession to the euro than those for setting interest rates….
15 November 2006 “COMESA to hold summit in Djibouti to boost integration” from the Peoples Daily, online, China.
Excerpts from the article…
Heads of State from the Common Market for Eastern and Southern Africa (COMESA) countries will meet Djibouti Wednesday in the coastal town of Djibouti, the capital of the republic also known as Djibouti, for the bloc’s 11th annual summit…
COMESA is the largest African economic bloc, grouping Angola, Burundi, Comoros, the Democratic Republic of Congo, Djibouti, Egypt, Ethiopia, Eritrea, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Swaziland, Sudan, Uganda, Zambia and Zimbabwe…
In the year 2000, COMESA launched the first ever African Free Trade Area which currently comprises 13 member states. It is scheduled to launch a Customs Union in 2008 and a full Monetary Union involving the use of a common currency issued by a common Central Bank in 2025.
10 November 2006 “Resuscitating the General Assembly of the UN” by David Khorram in the Saipan Tribune, Saipan, US Commonwealth of the Northern Marianas
Excerpt from the Op-Ed….
5. Investigating the Possibility of a Single International Currency
The need to promote the adoption of a global currency as a vital element in the integration of the global economy is self-evident. Among other benefits, economists believe that a single currency will curb unproductive speculation and unpredictable market swings, promote a leveling of incomes and prices worldwide, and thereby result in significant savings.
The possibility of savings will not lead to action unless there is an overwhelming body of evidence addressing the relevant concerns and doubts of skeptics, accompanied by a credible implementation plan. We propose the appointment of a Commission consisting of the most accomplished government leaders, academics and professionals to begin immediate exploration into the economic benefits and the political costs of a single currency and to hypothesize about an effective implementation approach.
6 November 2006. Government of India Press Release: “PM’S KEY-NOTE ADDRESS AT ICRIER’S SILVER JUBILEE CONFERENCE RESEARCH AGENDA FOR ECONOMIC THINK TANKS OUTLINED”
Excerpts from the Press Release…
The Prime Minister, Dr. Manmohan Singh has stressed the need to study the characteristics driving trade in natural resources, particularly the energy resources; the impact of international economic relationships on this trade; the perceived drive by some countries for securing sources of energy and minerals in third countries and the implications of this for free markets in these goods; and, policy guidance for our own planners and diplomats to secure our own economic future in this vital area.
Addressing the Silver Jubilee Conference of the Indian Council for Research on International Economic Relations [ICRIER], here today, Dr. Singh also underlined the need to study in-depth development trends in China and their implications for our development and effects of the large number of Free Trade Agreements we are entering or planning to enter into….
I also believe that a think tank must engage public opinion at home and abroad and shape thinking on issues of interest to our country. For example, I have not seen adequately informed discussion at home on the pros and cons of the recent restructuring of voting rights within the IMF. Nor on the Asian Monetary Union that is being discussed in some circles….
[emphasis added on website]
4 November 2006. IMF Press Release: IMF Managing Director Rodrigo de Rato Welcomes the Large Investment Programs in the GCC Countries and Highlights the Importance of Planned Monetary Union
Excerpts from the press release 06/240:
Mr. Rodrigo de Rato, Managing Director of the International Monetary Fund (IMF), issued the following statement today after a meeting in Jeddah, Saudi Arabia, with the finance ministers and central bank governors of the six-nation Gulf Cooperation Council (GCC).
“I appreciate the opportunity to meet with the finance ministers and central bank governors of the GCC and to join their discussion of common challenges and ways to address them….
I continue to strongly support the objective of establishing a GCC monetary union by 2010. Achieving this important objective within the agreed timeframe will however require accelerating the preparatory work to put in place the necessary institutional framework and infrastructure. The Fund stands ready to assist by providing policy advice and technical assistance in our areas of its expertise.”…
[The Single Global Currency Assn. followed up on this speech by writing an email on 16 November 2006 to Mr. de Rato to ask the IMF to expand its support of monetary union by encouraging existing monetary unions to expand and by encouraging the formation of other such monetary unions. Also, he was asked to support a Global Monetary Union, with such support beginning at the level of assigning economists at the IMF to study its costs and benefits.]
31 October 2006. Single Global Currency on list of Ambassadors’ priorities, even if low. ” U.N. envoys draw up ‘can do’ list”. by Betsy Pisik, The Washington Times
Excerpts from the article…
NEW YORK — Acknowledging they can’t save the world by 2015, a group of U.N. ambassadors has decided international-aid efforts should be focused on improving global access to clean water, health services and education.
Falling to the bottom of the list are such projects as addressing
climate change through carbon taxes, adopting a
global currency to reduce financial instability
and liberalizing trade barriers.
Anti-corruption efforts, reforming immigration policies and imposing the Kyoto Protocol were clustered toward the middle.
“There is this tendency in the United Nations, in government, the private sector, everywhere: You want it all,” said Bjorn Lomborg, director of the Copenhagen Consensus Center, which seeks to support the Millennium Development Goals by prioritizing resources.
[emphasis added on website]
See also, the website of the Copenhage Consensus with the full report of the Conference: “Copenhagen Consensus 2006” "Adopt a common currency" was ranked as the 39th, out of 40, most urgent solution. Generally, "Financial Instability" was ranked low in the list of CHALLENGES.
25 October 2006. “Almunia says ‘undesirable’ to act on Sweden’s euro refusal” by Lucia Kubosova and Teresa Kuchler in the euobserver.com.
Excerpts from the article…
EUOBSERVER / BRUSSELS – EU monetary affairs commissioner
Joaquin Almunia has said that Brussels could in theory take
Sweden to Europe’s top court for not joining the euro despite
meeting all the economic criteria – but he added that such
action “is not necessary or desirable” for now….
Sweden, which entered the EU in 1995, is legally obliged to enter the eurozone, an obligation enshrined in its EU accession treaty as in the case of ten member states that joined the union in 2004.
members UK and Denmark, on the other hand, have negotiated
an opt-out from the single currency.
According to Mr Posselt who raised the issue in a special Q&A session with the monetary commissioner, Sweden’s attitude sets a bad example for other countries gearing up to join the euro.
“They have ratified the accession treaty so how come they can organise a referendum and refer to it for not fulfilling the rules in this treaty?” he told EUobserver.
“This is a union of laws and rules. And member states can’t just pick up one rule that they don’t like and just ignore it. If they said – we need five or ten years to prepare, it is ok with me – but just to be quiet about the issue and do nothing is unacceptable.”…
25 October 2006. “London consolidates lead in global foreign exchange markets” by David Prosser in The Independent, online.
Excerpts from the article…
Britain’s dominant grip on the global foreign exchange market has tightened to such an extent over the past 12 months that almost a third of the world’s currency trading transactions now take place in this country.
Average daily turnover on the UK’s foreign exchange market reached $1.1 trillion (£587bn) in April 2006, the last month for which figures are available from an annual survey by International Financial Services London (IFSL). [emphasis added on website]
[Note that if the article is correct, the worldwide currency trading totals have grown to $3.3 trillion, which is fully $.8 trillion more than the $2.5 trillion estimate in the Single Global Currency Assn.’s book, The Single Global Currency – Common Cents for the World, and almost double the totals in the $1.8 trillion in the Bank of International Settlement’s 2004 Triennial Survey.]
23 October 2006. 10 southern African countries sign up to finance and investment pact from the Associated Press in the International Herald Tribune
Excerpts from the article…
JOHANNESBURG, South Africa Ten southern African nations have signed a finance and investment agreement meant to help boost economic integration and foreign investment in the region, officials said Monday.
Botswana, Zimbabwe and Swaziland signed the Protocol on Finance and Investment at a special summit of heads of government of the 16-nation Southern African Development Community, following the signature of the pact by seven other governments at a meeting in August …
The free trade area would be followed by the establishment a Customs Union by 2010, a Common Market by 2015 and Economic and Monetary Union by 2018….
[emphasis added on website]
14 October 2006. "Purdah most horrible" in the LEX column in the Financial Times.
The column begins….
Forget Opus Dei or alien autopsies in Area 51. The real global conspiracy involves central bankers. So far in October, hawkish public comments have been made by seven members of the European Central Bank’s governing council, five Federal Reserve officials, four members of the Bank of England Monetary Policy Committee and, yesterday, the governor of the Bank of Japan. The result? Two-year yields have jumped by roughly 10 basis points in all four territories. A complacent bond market has been given a rap on the knuckles.
Central banks deny the existence of informal communication strategies designed to move markets. But the evidence is right before investors’ eyes. The Fed, whose formal mechanisms are limited to eight written statements and sets of minutes annually and the chairman’s biannual testimony to Congress, has a tradition of using speeches and hints to hone its message to the bond market. The ECB, with 18 council members – 12 of whom represent national authorities – can resemble a cacophony. Even the BoE, with the most laborious formal procedures, drops occasional hints.
Most central bankers take an enforced break from bossing about bond markets for a week before each interest rate decision. What they chat about in private during this sensitive period, known as “purdah” in the UK, is unknown. Some observers, naively, assume they discuss inflationary risks in a world still awash with liquidity. Only conspiracy theorists realise that central bankers’ favourite topic is the creation of a single global currency, governed by an omnipotent council.
[emphasis added on website]
16 October 2006. “Dollar Falls as Russian Central Bank Will Boost Yen Reserves “ from Bloomberg by Daniel Kruger and Min Zeng
Excerpts about the 2010 Gulf Cooperation Council Monetary Union…
Governors of six Persian Gulf central banks, including Saudi Arabia, the United Arab Emirates and Qatar, will meet next month as they seek to create the Middle East’s first unified currency by 2010, a Qatari official said.
The meeting, planned for Nov. 4 in Jeddah, Saudi Arabia, is the next step in a round of talks among the six Gulf monarchies to discuss monetary union, said Basheer Yousef al-Kahalooth, an official at the Qatar Central Bank, in a phone interview from Doha.
Monetary union among the Persian Gulf monarchies may lead to the end of their currencies’ peg to the U.S. dollar, and "a more flexible currency regime,” said Monica Malik, an economist with Standard Chartered Bank in Dubai.
"This is another dollar-selling factor,” said Brian Dolan, research director at Forex.com, a unit of online currency trading firm Gain Capital in Bedminster, New Jersey, which has about $250 million worth of funds under management. "It is eroding some of the dollar strength we have seen in the past two weeks.”
15 October 2006. “Sterling’s lucky escape from euro” by David Smith in the Sunday Times. Despite the unfavorable headline, the column does provide a specific look at what might have been. At bottom, it predicts the demise of the euro.
Excerpts from the column…..
TUCKED away on the Treasury’s website is a rather sad little document that has been made available under the Freedom of Information Act. It is the plan for switching to the euro in Britain when the time comes….
What would have happened had we joined? Three years is too short a timescale to say, but we can estimate what might have happened had Britain gone in at the euro’s inception in 1999. Marchel Alexandrovich of Dresdner Kleinwort, in a simulation, says that there would have been an almighty boom soon after entry, with growth reaching nearly 5.5%, followed by a more pronounced boom-bust cycle. The housing market would have risen faster and further, though it might by now also have crashed.
Entry would have meant lower interest rates; just 2% much of the time. The Bank of England would have been turned into a branch office of the European Central Bank, relieving its governor of direct responsibility for controlling inflation or writing letters of explanation to the chancellor when the target was missed. But inflation would have been significantly higher, typically 3%-4% even on the consumer prices index. We had a lucky escape….
The Centre for European Reform is not given to alarmism over the European “project”, being very much in favour of it, but a recent paper, Will the Eurozone Crack? by Simon Tilford, set out the dangers clearly….
If Italy fails to improve its competitiveness, it could be forced to leave the eurozone. The consequences would be hugely damaging not just for Emu, but for Europe more broadly. It could easily force other countries to leave and threaten the single market.”
This chimes with my view that the euro will not survive in its present form for the next 10 years. I am glad, despite the irritations, that we are part of the EU. But when it comes to the euro, it is a case of better off out.
10 October 2006. “WAMZ [West African Monetary Zone] To Start Trading In Local Currencies” by Boahene Asamoah in Graphic Ghana
In its entirety…
Member countries under the West African Monetary Zone (WAMZ) will by the end of this year start a process towards a more accelerated regional integration with a proposed quoting and trading in currencies within the territories of member states.
To ensure a smooth implementation of the programme a workshop on “Quoting and Trading in WAMZ local currencies with representatives from central banks, financial institutions and other stakeholders was organised in Accra yesterday.
Speaking at the function, the Director General of WAMZ, Dr Oku Joseph Nnanna, underscored the need to put in place a framework to formalise informal activities within member countries of WAMZ.
The main objective of the workshop was to propose options for making WAMZ member currencies convertible to the zone.
He said the currency convertibility “will serve as a catalyst for the introduction of the single currency, reduce transaction costs and improve foreign reserves of member countries”.
Dr Nnanna said it was aimed at bringing the informal sector into the mainstream of convergence criteria, adding that it should be possible for businesses in member countries of WAMZ to trade freely without the institutional bottlenecks.
“We must help our businesses to grow and become enterprises,” he stated, adding that trading in WAMZ currencies would facilitate the introduction of the single currency and trade and generate growth, reduce poverty and create wealth.
Five countries under the WAMZ, namely Ghana, Nigeria, Sierra Leone, The Gambia, and Guinea have undertaken to adopt a single currency, the ECO, by 2009.
In 2005, the WAMZ postponed the commencement of monetary union to December 2009.
WAMZ approved an expanded work programme to facilitate the
establishment of the monetary union.
Dr Nnanna said the informal sector in member countries were already practising the free convertibility of regional currencies in their cross-border activities with significant degree of success under parallel market conditions.
formalisation of these activities will improve their efficiency,
minimise the use of cash in business transactions, reduce
the incidence of counterfeiting and ensure the expansion
of intra-regional trade transactions,” the Director General
8 October 2006. “Central Europe cannot afford euro delay” by Wolfgang Munchau in the Financial Times.
Excerpts from the article…
The 10 accession countries enjoyed seemingly miraculous economic runs through the 1990s, which ended at around the time of European Union accession, in 2004. Growth rates are still good and in some cases impressive. However, several of the states are growing at the expense of stability.
Central European countries should have followed the example of Italy and Spain in the 1990s. Both countries made adoption of the euro their top priority. While the euro did not solve Italy’s structural problems, it certainly led to substantial budgetary reforms that otherwise would not have taken place. Italy may find life inside the eurozone unbearable, but life outside would be far worse.
3 October 2006. “How to Fix the Global Economy” New York Times Op-Ed, by Joseph Stiglitz
Excepts from the article…
THE International Monetary Fund meeting in Singapore last month came at a time of increasing worry about the sustainability of global financial imbalances: For how long can the global economy endure America’s enormous trade deficits — the United States borrows close to $3 billion a day — or China’s growing trade surplus of almost $500 million a day?
These imbalances simply can’t go on forever. The good news is that there is a growing consensus to this effect…
Underlying the current imbalances are fundamental structural problems with the global reserve system. John Maynard Keynes called attention to these problems three-quarters of a century ago. His ideas on how to reform the global monetary system, including creating a new reserve system based on a new international currency, can, with a little work, be adapted to today’s economy. Until we attack the structural problems, the world is likely to continue to be plagued by imbalances that threaten the financial stability and economic well-being of us all.
[emphasis added on website]
3 October 2006. “Financial Integration in the West African Economic and Monetary Union” by Amadou Sy, of the IMF.
The abstract reads…
This study assesses the degree of financial integration in the West African Economic and Monetary Union (WAEMU). The structure of the financial sector and its institutional arrangements indicate that financial integration is well advanced in some aspects. Common and foreign ownership of banks is very high and cross-border transactions are frequent in the government securities markets.
Common institutions help achieve a high degree of similarity of rules. There is nonetheless scope for further financial integration as indicated by persistent deviations from the law of one price, limited cross-border bank transactions, and differences in treatment. Policy measures could therefore help achieve greater financial convergence.
3 October 2006. Ghana debates not whether to join, but which monetary union to join. “Ghana should join CFA zone, not W/A monetary union” by Ayuure Kapini Atafori in The Statesman.
The article begins….
Ghana should abandon its plans to join the proposed West African Monetary Zone, which has seen its commencement date postponed several times, and rather join the CFA monetary zone since she stands to gain more from it, given its location, a leading economist has suggested.
“It is not economically viable for Ghana to join the West African Monetary Zone. To me, we should rather join the CFA zone,” Augustine Gockel, a senior lecturer at the Department of Economics of the University of Ghana told a forum at Legon, Accra, on Friday.
Dr Gockel argued that since Ghana is surrounded by French-speaking CFA zone countries, it makes economic sense for it to be a CFA holder in order to transact business easily with its neighbours.
3 October 2006. Joaquin Almunia, European Commissioner for Economic and Monetary Affairs, speaks optimistically of future Lithuanian adoption of the euro.
His speech concludes….
Ladies and gentlemen, let me conclude. Euro area enlargement is an ongoing process, opening a new chapter in European economic and monetary integration. The potential benefits are great but challenges need to be tackled head on. Economic policies in the run-up to euro adoption will be shaped by the need to maintain macroeconomic stability while assuring sustained strong growth in a catching-up context. Euro area entry should only take place when the conditions are right, based on an objective and impartial assessment under the provisions of the Treaty.
Euro area enlargement will create new opportunities for citizens and businesses, and will add welcome dynamism to the single currency area as a whole. Both existing and future euro area members will need to gear policies towards stable public finances and well-functioning product and labour markets. The times ahead will remain challenging, but I am confident that the elements are in place to make euro area enlargement an important chapter in the success story of European economic integration. In my mind there is no doubt that Lithuania will join the euro in a not-too-distant future, provided the right policies are swiftly put into place.
While the exact date of euro adoption is your responsibility, I strongly encourage Lithuania to remain committed to a firm and credible medium-term policy strategy. This is the best choice for the long-term health of your country’s economy, and it will improve prospects for achieving the policy priority of securing euro adoption as soon as possible.
28 September 2006 “The EU needs to step up to reform the international financial system” by Frederic Rochelle in NewEuropeans Magazine.org
As the General Assembly of the IMF and World Bank closed its doors last week in Singapore, one can just be astonished at how limited the European contribution has been, both in shaping the debate around governance and corruption (sparked around the World Bank) and also in leading the reform of the IMF, soon to be followed by the World Bank reform….
To reorganize the world financial order, a “political globalization” has to catch up with the financial and economic globalization. The Europeans have to start looking outward, and not only inward to their own internal power struggles: rather than following the IMF director proposed slight adjustments of voting rights, it is time to take responsibility for the reorganization of these major financial flows, especially seen the risks involved there. Creativity is needed, both with a new institutional set-up: if the mandate of Mr. Trichet does not allow him to do so, should Mr. Juncker, the political Mr. Euro step up, with the support of his other European non-Euro colleagues? But also with operational solutions: since the dollar will continue to be a reserve currency, but with foreseeable less weight, should for instance a World Currency Unit be created, modeled on the European Currency Unit, and centered around Dollar, Euro, Pound, Yuan and Yen?…. [emphasis added at end]
27 September 2006 “An Asian currency – a bridge too far” by Huw McKay in Asia Times online.
The Op-Ed begins….
The United States recently ended its outright opposition to the establishment of a common currency in Asia. Soon after, a leading Chinese academic floated the “Asian Currency Unit” as a possible solution to the global imbalance dilemma. These events have reignited the debate on whether it should happen, how it might happen, and when it might happen.
My stance is that anything other than a synthetic trading unit should not be established for a considerable time. By a “considerable time” I mean one measured in decades rather than years.
three major economic reasons that a common currency is not
a good idea at this moment are these:
1. Living standards and potential growth rates across Asia are too diverse for a “one size fits all” monetary policy.
2. Intra-Asian trade is already significantly higher than standard models predict. The increase in trade that a common currency would bring about might therefore be negligible in the absence of supporting liberalization.
3. The free capital mobility that monetary union implies is inconsistent with the objectives of a number of prospective member nations….
[By SGCA: however, living standards vary in the Eurozone, too, and trade WILL increase with a common currency, and capital flows freely within a monetary union, and without effects on the common currency.]
The entry cites these benefits for the SGC:
Arguments for a global currency
Some of the benefits cited by advocates of a global currency are that it would:
- Eliminate the direct and indirect transaction costs of trading from one currency to another  .
- Eliminate the balance of payments / current account problems of all countries.
- Eliminate the risk of currency failure & currency risk.
- Eliminate the uncertainty of changes in value due to exchange-caused fluctuations in currency value and the costs of hedging to protect against such fluctuations.
- Cause an increase in the value of assets for those countries currently afflicted with significant country risk.
- Eliminate the misalignment of currencies.
- Utilize the seigniorage benefit and control of printing money for the operations of the global central bank and for public benefit.
- Eliminate the need for countries or monetary unions to maintain international reserves of other currencies.
As of 21 September, this is the full entry for “World Currency”
20 September 2006 “World Bank to fund EAC programs” by Mark Oloo, Kenya Times
The artcle begins…
The World Bank has pledged to support the East African Community (EAC) in the implementation of its programmes, including the intended launch of a monetary union and a common market protocol.
20 September 2006 “Single common currency for Asia not discounted” by Susan Tam, online Malaysia Star
SINGAPORE: The proposal for a single common Asian currency to promote financial integration in the region is not discounted but stability should be given as a priority.
Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said although this proposal was unlikely to see light in the near future, there was no precluding the possibility of having a common currency for countries in Asia.
“But we, of course, would like to see stability with foreign exchange markets operating in our region.
“Especially as the markets become highly integrated, that stability is important,” she told StarBiz after delivering a presentation at the IMF-World Bank Asian Financial Integration Symposium yesterday.
This event was held at the sidelines of the IMF-World Bank meetings scheduled to end tomorrow.
Earlier, University of California professor Barry Eichengreen said for the region to undergo efficient financial integration, one way was to move towards having a common currency for the region.
But, first, the region should have a parallel currency, he said. “This can be a basket of regional currencies and can be taken towards a legal tender status.”
When this happened, assuming that it was stable and financial markets would use it (parallel currency), Asia could then move towards a single currency, he said, adding: “Once the parallel currency gains a significant market share, we can then talk about having a common currency.”
Eichengreen said although this process might take a long time, similar to how the euro took some time to be accepted in Europe, it should not pose as an obstacle towards financial integration (in Asia).
19 September 2006 “Abu Dhabi base for GCC Central Bank” from Trade Arabia Web Services.
In its entirety….
The GCC states have already agreed to base the new GCC Central Bank in Abu Dhabi, a report said.
The GCC monetary union is expected to be in place in 2010, when the common currency will also be launched, Sultan Bin Nasser Al Suwaidi, Governor of the UAE Central Bank, was quoted as saying in a Gulf News report.
He also said a future common GCC currency should not be pegged to the US dollar.
19 September 2006 “Eurozone could fall apart due to slow economic reforms, says report” by Honor Mahony in the online Eu Observer.
The article begins…
The eurozone risks breaking up in the near future putting the entire EU single market into jeopardy unless member states – particularly Italy – undertake crucial economic reforms, according to a new report.
Will the eurozone crack?, the report by the London-based
Centre for European Reform, argues that instead of European
Monetary Union in 1999 leading to progress in the reform
needed for membership of a single currency zone, it resulted
in national governments becoming complacent and no longer
feeling obliged to push through unpopular economic changes….
18 September 2006 “Asia common currency not in my lifetime, says Thai central bank head” from Reuters
The creation of a common Asian currency is still a long way off and it is hard to envisage one region with a single interest rate policy, Bank of Thailand governor Pridiyathorn Devakula said on Sept 18.
“I don’t see it within my lifetime,” Pridiyathorn said when asked about the possibility of a common Asian currency at a seminar on Asian integration in Singapore.
He said that given the diversity among Asian economies, it was difficult to visualise a single currency, backed by a single monetary policy.
“We don’t see how a single currency can solve problems,” he added. “It’s impossible, I don’t believe in that yet.”
Earlier when talking about integration, Pridiyathorn said, “more needs to be done to relax restrictions in some countries on cross-border capital flows.”
He added, however, that the sequence of such liberalisation needs to be properly determined.
Intra-regional trade among the 10-member Asean along with China, Japan, South Korea, Taiwan and Hong Kong accounted for 55% of their total trade in 2005.
Asean external trade is more than US$1 trillion (RM3.68 trillion).
Last month Asean trade ministers endorsed a plan to speed up the timetable for economic union, targeting 2015. – Reuters
18 September 2006 “Asia’s diversity makes single currency unfeasible” by Lee Ching Wern, Singapore News
Excerpts of the article ….
EVEN as Asia works towards achieving regional integration, the idea of adopting a European-style single currency is not feasible here.
The vast disparity between Asian countries makes monetary integration a very "risky proposal that can derail a commitment to Asian economic integration", said Second Minister for Finance Tharman Shanmugaratnam yesterday at the Per Jacobsson lecture in conjunction with the IMF-World Bank meetings.
Addressing an audience of top bankers, academics and businessmen on the topic "Asian Monetary Integration: Will it Ever Happen?", Mr Tharman pointed out that unlike in the European Union, where its member countries are more similar in terms of their levels of wealth, economic structure and stages of development, Asian countries are much more diverse.
When it comes to intra-regional trade, this disparity is an advantage as each nation can offer the other something different….
But unlike Europe, there is no overriding political objective of achieving union in Asia. "So the costs are more significant than the advantages for monetary union," he said.
Even without a common currency, Asian countries seem to be coming up with their own solution….
But he wouldn’t rule out the possibility of having some formalised coordination of currencies. However, current proposals like having a common currency basket that each national currency can be pegged to; or having a parallel currency running alongside the national currencies, are not ideal either.
"All these proposals I think are worth leaving on the table but they do not advance the present job – that of trade and financial integration," said Mr Tharman. For now, the game in Asia is to concentrate on economic and financial integration.
15 September 2006 “62% of Poles would welcome the Euro” Polskie Radio
The majority of Poles support the country’s introduction of the common EU currency – the Euro. While 62% of respondents support the idea, one fifth do not expect Poland to put the Euro in circulation before 2010. A similar survey conducted in Slovakia and Hungary showed a higher willingness of those nations to be members of the Euro zone, especially in Hungary. The most recent Eurobarometer poll revealed that out of all the EU countries that still have their national currencies the number of people who have ever used the common currency is the lowest in Poland.
13 September 2006 “Euro currency unpopular in Czech Republic” by Mark Beunderman in the EU Observer.
More Czech people oppose the introduction of the euro to their country than support it, according to a fresh survey.
A poll conducted by the Median agency revealed on Tuesday (12 September) that almost four out of 10 Czechs oppose the adoption of the EU’s common currency, according to AFP.
Around 38 percent of people surveyed said they are broadly against their country joining the 12-member eurozone, while 29 percent responded in favour of the idea.
Divergences between those taking clear stances on the issue are even sharper, with the percentage of those clearly against euro adoption (15%) lying almost twice as high as the percentage of clear supporters (8%).
Meanwhile, almost a third of the 7,425 Czechs quizzed in the poll said they had no opinion on the issue or did not want to give any.
The new centre-right Czech government, led by prime minister Mirek Topolanek, is more critical of the EU than the previous social democrat coalition.
Mr Topolanek’s cabinet was sworn in on 4 September after months of bickering on the formation of a government, with June elections producing an exactly equal split between left and right in the Czech parliament.
AFP writes that the country’s new finance minister Vlastimil Tlusty on Monday ruled out that his country will next year join the so-called ERM II (Exchange Rate Mechanism II) – an intermediate step before eventual eurozone membership.
ERM II entry in 2007 would allow the adoption of the euro in 2010 – a goal set by the previous centre-left government.
13 September 2006 “A Single Global Currency?” by Edgardo B. Espiritu, in The Manila Times.
Excerpts of the article….
… Now there is an even bigger proposal—the introduction of a Global Currency Unit (GCU) that will be the basic unit to measure international transactions. The proponent is Mr. Robert H. Wade, a professor of political economy at the London School of Economics. He said in his recent article in the International Hearld Tribune (“The Case for a Global Currency,”) that “the world economy needs an international currency distinct from national currencies and national interests.”…
….It is certainly time for the world financial and economic leaders to start seriously considering solutions such as these, given the gravity and magnitude of the problem of global financial imbalances. We have seen how financial crises can wreak havoc in the real economy and in people’s lives, particularly in the emerging economies here in Asia, and if we have learned our lessons, we should now be working intently on a plan to address them.
[For more information about the Wade article, see below, at 4 August 2006. “The case for a global currency” by Professor Robert H. Wade]
5 September 2006 “A common currency for Mercosur?” in "TRADE TALK" in Latin Business Chronicle.com.
Excerpted paragraph reads…
Brazil and Argentina, the top Mercosur countries, are now formally planning to launch a common currency, according to statements last week by finance ministers Guido Mantega of Brazil and Felisa Miceli of Argentina. According to information from Miceli quoted by French news agency AFP, the new currency will likely be launched next year and be gradually implemented, starting with two way trade of goods first.
The new currency will benefit traders since they will pay less exchange fees, Mantega says. If it becomes a reality, the new currency will represent two vastly different monetary policies : Brazil’s, which has aimed at keeping inflation under tight control, and Argentina’s, which has failed completely at doing the same. No news yet on whether the other three Mercosur countries (Uruguay, Paraguay and Venezuela) will join as well.
3 September 2006 “High energy prices delay EU recruits’ eurozone entry” by Graham Searjeant, Financial Editor, the Times, online.
Excerpts of the article….
PROLONGED high energy prices and fears of recession are setting back the plans of the European Union’s new member states to join the eurozone.
Hopes of most of the ten EU states planning to adopt the euro have been put back by up to two years since Slovenia was approved as the 13th country to adopt the single currency from the start of next year.
High oil prices have pushed up inflation in small countries with high rates of economic growth, particularly in the Baltic region.
Lithuania suffered a 40 per cent rise in gas prices in January after its long-term supply contract expired and was refused early entry into the euro because its inflation rate was 2.7 per cent, less than 0.1 percentage points above the required rate.
Lithuania is now officially expecting to join in 2009, in tandem with Estonia. In Latvia, consumer price inflation topped 6 per cent in the spring, when the country was still hoping for 2008 entry….
Fitch Ratings, in a new study on convergence for economic and monetary union, forecasts that only Cyprus will actually be able to join the single currency in 2008, with Malta and Slovakia following in 2009. The credit rating agency sees the three Baltic states being accepted for 2010, although Estonia could go a year earlier. The Czech Republic is pencilled in for 2011, Poland for 2012 and Hungary, which has the biggest fiscal deficit, only for 2014.
Fitch says that its projections have been put back by an average of two years since it reported on convergence 12 months ago. Others suggest a later date for Polish entry.
3 September 2006 “Bonpasse: Common cents just makes sense” by Christopher Cousins in the Times Record, Brunswick, Maine
The article begins…
Morrison Bonpasse has a plan to change the world’s change by 2024.
It’s all laid out in his 2006 book "The Single Global Currency – Common Cents for the World"…
[Correction: The article states that there 190 different currencies in the world – 147 in United Nations Countries alone – each with its own value relative to the others. However, it’s more correct to say that there are 147 currencies among the 192 members of the United Nations.]
2 September 2006 “GCC panel to study draft rules on Monetary Union” from the Khaleej Times.
ABU DHABI — The GCC Technical Committee for Monetary Union, which concluded its two meeting in the capital, asked for further studying the draft report presented on the legislation and rules regarding GCC common monetary authority.
A high-level 17th meeting of GCC Technical Committee for the Monetary Union discussed several important issues within the GCC schedule for Monetary Union and issuance of the common currency. Sultan bin Nasser Al Suwaidi, Governor Central Bank of the UAE, chaired the meeting, which was also attended by Mohammed Obeid Al Mazroui, Assistant Secretary General-Economic Affairs and Dr Nasser Ibrahim Al Qaoud, Director of the Monetary Division at the GCC General Secretary, delegates from GCC countries and members of the committee.
The meeting took up a study prepared by the Central Bank of the UAE on adequacy of the Monetary Authority’s reserves of foreign currency for covering value of commodity imports of the GCC countries. It also discussed a recommendation of the second meeting of the Work Team assigned to study specifications, denominations, designs, issuance and launching mechanism of the unified currency.
The committee reviewed the GCC General Secretariat’s report on the workshop on the monetary and financial statistics, which was held in July in collaboration with the IMF.
GCC top financial officials also reviewed suggestions to
the paper on GCC progress presented by Kuwait during the
8th consultation meeting of the GCC Supreme Council. The
committee reviewed report and recommendation of delegation
of the Technical Committee for Payment Systems on their
visit and meeting with officials at the European Central
Bank and the Deutsche Bank.
September 2006 “Ahead of His Time – People in Economics.” An interview with Robert Mundell in the IMF Quarterly Journal: Finance and Development, by Laura Wallace.
"How about the rest of the world? Actually, if Mundell could have his way, the entire world would be one big optimum currency area, sharing a global currency….
Mundell argues that the best system for both small and large countries would be a stable international monetary system based on fixed exchange rates. A second-best, interim, arrangement would be for the smaller countries to fix credibly to the dollar or the euro, in this way participating in the stability of the larger currency area. However, the solution would be even better if a basket of the dollar, the euro, and the yen—what he calls the DEY—were to become the nucleus of a new global currency issued by a revamped IMF…."