Reader comments in reverse chronological order
From: Dan Thompson, Advanced Management Catalyst, Inc.
To: Morrison Bonpasse
Sent: Monday, May 07, 2007 7:18 PM
Subject: A Book Review of The Single Global Currency
Congratulations on your seminal book!
I offer the attached review intended to be constructive. Obviously
needs to take place and soon!
The book: The Single Global Currency by Morrison Bonpasse, Single Global Currency Association, Newcastle, Maine, 2007 edition, ISBN 13 978-0-9778426-2-9.
I found the Single Global Currency Association by searching on the Internet for “single global currency.” The Association was first on the list. I was amazed to learn that this book appears to be the only book dedicated solely to the subject. I asked the Association the following question, “ I am inclined to like the idea of a single global currency but deeply distrust a global central bank system privately controlled as is the Federal Reserve and the Bank of England. What are your organization’s thoughts about the tyranny of privately controlled central banking?”
At the time, I did not realize that the Association is located nearby in Newcastle, Maine. However, the author of the book and President of the Association noted my email as coming from Wiscasset, Maine, and contacted me directly. We met and I discovered this book and its intent. Interestingly, the answer to my question seems to be that the Association takes no position relative to my (inexpert) fear of an un-benign “big brother” or “invisible hand.” Nevertheless, I find much value in this book and its timely plea for less risk in the global market through the development of a single global currency in a global monetary union with a global central bank (page xix).
The Preface to the 2006 edition indicates to the reader how best to use the book. Very helpful references are given throughout to web sites and other accessible sources. It becomes apparent that there is no glossary of terms in this book. However the reader is directed to an online glossary at http://www-personal.umich.edu/~alandear/glossary/ as referenced on pages 10 and 73 of Part I, Chapter 1. Clearly the author and this reader find there is a plethora of terms used for global economics. Further, these terms seem to trip up even the specialists.
Fortunately, the book quotes experts who are able to express themselves simply and understandably. For example, Milton Friedman is quoted, “People must work hard to dig gold out of the ground in South Africa – in order to rebury it in Fort Knox or some similar place.” (page 68)
Furthermore, the author spells out some basic definitions that carry the reader through the book. For example, the definition of “money” is boiled down to three functions (pages 4 and 51):
1. Medium of exchange
2. Store of value
3. Unit of account.
Chapter 3 starts with another concise definition of the unsolved questions about the international currency exchange system (page 78):
1. How can we value one currency compared to another?
2. Why do those values rise and fall?
The questions quickly move the reader into deep water. Many examples are given to send one, clear message: in recent years the multicurrency exchange rate system is at least inefficient and is at worst about to break down. Fortunately, help is on the way. First, many economists recognize the problem. Second, the Euro shows the way to a solution. Third, the book visualizes a world with many, many benefits from the general adoption of a global currency. Here are a few of the benefits cited:
o World assets increase by $36 trillion
o World GDP increases by $9 trillion
o World annual transaction costs are gone saving $400 billion
o All balance of payment problems will be eliminated
o Currency crises will be prevented.
I would add to this list of benefits a clear recognition that 2 billion people on the planet are disconnected from the system in many ways and could more easily join the other 4.5 billion by having global fiat money available for investment and exchange. U.S. Department of Defense analysts have determined that sustainable world stability hinges on the question of folding the 2 billion into the prosperity possible world-wide. ( “The Pentagon’s New Map,” by Thomas Barnett)
While not directly addressing a world currency, the book by Professor Shoshana Zuboff and Dr. James Maxmin entitled The Support Economy projects strong trends in future international trade. Their new “enterprise logic” seems to fit like a glove with the thrust of Bonpasse’s book. Fortunately, the authors all live within a few miles of one another and really ought to meet about the possibilities!
Nevertheless, I add here a warning about a single global currency based on what seems to be a deep secret about the world banking systems. As stated in the book, we are talking here about a new “social contract.” (page 247) The secret is that fractional banking regulations can destroy all the good done by having a single global currency. That is, unless and until all banks are expected to have 100% reserves (in this case in the new global currency), capricious dictates of 10% reserves (see page 119) or something else will hold nations hostage. For example, Japan suffered greatly when the major central banks dictated 8% reserves when Japan had been using 2% instead. These statements are made based in part on the following reference: (http://video.google.com/videoplay?docid=515319560256183936&q;=moneymasters)
The SGC book appeals to the apparent wisdom of building on policies, institutions, and systems that exist today. Part II of the book describes the monetary unions possible based in large part on the success of the European model. I find that the text handles the question of central control a bit too delicately. The control issue is briefly discussed on page 107 and is stated thusly, “Even if such a vote might not have much weight, it would preserve some measure of dignity for the residents of the ized country.”
I see no big problem if and only if secret, private control of central banks goes away nation by nation. Then, the European Central Bank, for example, would be composed of national central banks which in turn could be democratically run by the citizens of the member nations. I like the suggestion of “open governance . . exposed to the Internet eyes of billions of people . .” (page 213). Thus, I stand reconciled on the subject despite the book’s apparent silence on the issue of the dangers of central control.
Most every analysis or theory stands or falls on its ability to correctly predict the future. Thus, Part III of the book may become the litmus test of the book and the idea of a single global currency. The author correctly points to the arguments for the euro providing a model of success. Beyond that model, I am struck by an out-of-the-blue idea about the future: might the test of the efficacy of the proposed model be the analysis of its opposite? Suppose, for example, that we consider not a single global currency but, instead, an ever-expanding number of currencies! Let us assume that super-integration of large scale computer processors occurs to cope with the situation. Further, let all currencies float with no requirements for reserves whatsoever. Chaos? Maybe, maybe not. I can imagine bringing a bag of mixed coins, bills, and credit/debit cards to a checkout counter at the grocery store; the computer/cashier would scan them all and analyze their actually-trading value (purchasing power parity) and extract just the amount from my bag needed to pay for my groceries! (Please realize that I really do not advocate such a model.) I suggest that such extreme “thought experiments” be conducted to tease out that nemesis of all new theories: unexpected consequences.
The book correctly points out that implementation implies strife, mechanics, and politics. Sometimes the seemingly impossible can be done smoothly and quickly. Sweden went from driving on the left side of the road to the right side in a weekend! However, there were many months of planning to get ready. I have talked with one of the citizens who went through the transition. He says it went far more smoothly than anyone anticipated. This experience might be cited as another example of how such things could go.
Implement your idea of running a world-wide contest for the best name for the new single global currency (pages 238 and 333). My offering I make right now is photons with the symbol being a “P” with two vertical lines; I base the inspiration for my suggestion on Scaruffi’s suggestion to use alitinonfo as the name of a 16 th century common currency. That name is based on a Greek word meaning “true light” (page 99).
In speculative advanced physics, generic photons are proposed as the fundamental building blocks for all cosmic energy – – just what the world needs!
However, if the global central bank were a function of the United Nations, I would suggest calling the new single global currency the “UNO” or “uno.” The symbol would be an “O” with two vertical lines through it.
More seriously I suggest the author expand the criteria for the SGC name selection, touched on in page 300. The criteria should include principles that elicit the most likely success; here are some characteristics to foster:
1. Include a glossary of terms and acronyms in the next edition of the book.
2. Integrate the addendum into the body of the text of the next edition. It is getting
too cumbersome for the reader otherwise.
3. Consider more illustrations to help crystallize the points made.
4. Consider a new subtitle for the book, “Common Sense for the World.” The
reason: many are calling “cents” obsolete as are “mils.” Instead they advocate
using nothing smaller than a nickel just as there are no US bills being printed
greater than $100 anymore.
5. Add an easily seen plea for grants and gifts for the cause, perhaps place a
summary of Appendix A (and Appendix B, page 329) at the very end of the
volume together with the handy contact information provided already.
6. Put pithy, positive quotes or testimonials on the outside of the back cover with
recognizable names for each; this is what book buyers see first after the cover.
7. Consider designing a world-wide, Internet-based think-tank about implementing
the SGC idea. Use the best techniques for brain-storming and for thought
experiments that elicit the greatness inherent in the wisdom of crowds ( ala
James Surowiecki’s book).
8. Add the book “The Support Economy” (Penguin Books, New York, 2002,
ISBN 0 14 200388 3) to the bibliography..
9. Most everything affects most everything else. Consider touching on some other
interesting movements: a flat tax, social capital, volunteer “hour” banks, and
Internet voting for local-national-international policy-making. Perhaps these
topics should be taken up by the single global currency institute proposed on
page 236. I envision this research organization being a part of the UN or IMF.
10. Efficiency of the use of money should improve the health of the planet’s
environment and someone ought to be beating that drum.
11. The subtitle of the book would be more seriously considered and reasonably
compelling, I believe, if it were something like this: “Wise Governance away from
Our Babel of Currencies.” (Inspired by pages 188 and 230)
12. I am not satisfied with the response stated on page 222 to Professor Roubini’s
comments against a single world currency. I believe it would strengthen the book
by addressing each point explicitly.
13. Define “legal tender” as being valid for both public and private debts in the
definition for a common currency on page 150. The persuasive power of being
able to pay taxes and recognize value of currency in other nations becomes even
more potent when private validity is explicitly stated as well.
14. Get CEI to adopt the endorsement of a single global currency per the Resolution
on page 270. The argument, I feel, is multifaceted, but the case for improving the
lot of the marginalized ought to prevail. Thereafter, CEI could introduce the
Resolution in the national association of community development corporations. I
speak here as a past member of the Board of CEI.
15. More should be proposed, I feel, for the role of the United Nations. The UN has
an organizational model or two that could be helpful. The World Health
Organization has been by almost any measure successful. Perhaps charter a
“World Monetary Organization” as an umbrella for research and fairness in the
governance of a single global currency. (pages 236, 238, 295, 296, and 251 ff.)
16. Our organization (AMCi) is developing a tool for quantitative and easily
understood feedback for human endeavors. Such a “dashboard” indicator might
elicit both understanding and support for progress toward a SGC. Please see the
example developed for the support economy theory shown a the end of this
1. Why not a long-term vision of a world where there are no coins and no paper
money instruments; rather all is digital?
2. Did Wendell Wilkie touch on currency in his prescient book, “One World”?
Would the history of his observations be helpful?
3. Is there or has there ever been a world board of trade? If so, what are its
characteristics and track record?
4. What does the author consider the greatest barrier to success? How is success
defined? Would the author welcome development of an overall management plan
to reach success? If so, when and how? Following the format started on page
236 consider the systematic model used successfully by AMCi:
I appreciate the plain talk presented in the book. I hope that many more people read the book and recognize both the threats indicated and the solutions suggested. I earnestly hope that the annual Bretton Wood conferences blossom in the process and become the effective forums for implementation focus.As one gardener has said, “If you want to establish a beautiful tree that will take a century to grow, plant it immediately!”
Sent: Monday, January 15, 2007 9:24 PM
Subject: More comments on Single Global Currency book from Kurt Schuler
… Here are a few more comments. The first numbers are page numbers.
63: The idea that denominating payments in euros had any connection with the Iraq War is bunk. Delete it. It has been possible for some years to make payment in euros in London for oil futures contracts there, and the denomination of the currency matters little or none for the real price of oil.
64: Only a small portion of Persian Gulf countries’ foreign reserves are in short-term dollar assets held by their central banks. Most reserves are in medium- and long-term assets that include securities, equities, and real estate, widely spread over the world. And the US does not offset its trade deficit with the oil exporters by printing dollars, but by issuing securities that they want to hold. The risk-adjusted real return and not the currency denomination is the important thing here.
78: "than for any other category" should be "as for any other category."
86: Good point about how shocks are usually considered. Only really big positive shocks are usually considered occasions to think about revaluation, while much lesser negative shocks are considered legitimate grounds for devaluation.
89: I don’t think the important issue when considering central banks versus the market is technical, as the lines at the top seem to imply. Rather, central banks soften lack the will to take steps that will avoid devaluation even though those steps are perfectly feasible. For instance, they hike interest rates without reducing the monetary base significantly.
104: Brunei and Singapore have not been currency boards for a generation.
104: The two CFA francs have equivalent official parities, though if you go into a bank you may get slightly different rates for them sometimes.
105: "Dollarization" is older than the 1990s, though I don’t know how old. Maybe the 1960s.
119: In place of "stubborn," insert "generally accurate"?
150: Besides a single currency, financial integration requires extensive cross-border penetration by banks, pension funds, etc. The US had a single currency but had periodic bank failures and runs that caused problems until about 1990 because we discouraged interstate branch banking, whereas in Canada problems were few after 1870, when the country got its first nationwide bank law and allowed banks to branch anywhere in the country. A single currency helps, but cross-border financial services are essential for reaping the full benefits of stability of the the financial system that come
from "one world." This does not contradict anything you say; it just extends it.
174: I would say that the gold standard promoted a high degree of the "right" to a stable currency, but governments screwed it up. The same danger exists with a global central bank, either from bad management at the center or from governments deciding to withdraw from the single currency and issue anew their rotten little national currencies.
175: The dollar *earned* reserve currency status by relatively good
long-term performance. That is eminently fair. Other currencies, notably sterling, once had reserve currency status but lost it by prolonged periods of bad performance.
176: On the Internet analogy, it is worth noting that the reason many other countries want to wrest control away from a US-based organization is that they want a closed Internet that they can censor rather than the open Internet the US has promoted. As with the dollar itself, the US here is on the side of freedom and many other governments are on the side of restriction.
181: It’s eminently fair for the Swiss franc to be more important than the Brazilian real. The franc is perhaps the currency that has preserved value the best since its introduction, whereas the real has suffered enormous depreciation dating back to near the start of Brazil’s existence as an independent nation. This history continues to haunt the real, and helps explain why its exchange rate and interest rate are so volatile.
183: The CFA franc was not issued by currency boards before France’s African colonies became independent, but by what I call monetary institutes, monetary authorities with more restricted powers than central banks but still able to conduct sterilized intervention, unlike orthodox currency boards.
216-222: Summarize briefly, do not reprint Wolf and Roubini.
Good luck with future editions.
"…a remarkable new book advocating a single global currency."
James W. Dean, Professor Emeritus, Simon Fraser University, 13 October 2006 in a speech in Kyev, Ukraine, at http://www.carleton.ca/economics/cep/cep06-07.pdf
"Your book deals with a very interesting topic with a long history that has attracted numerous distinguished minds, including those of Gasparo Scaruffi, John Stuart Mill, John Maynard Keynes, James Meade, Milton Friedman, and Robert Mundell, among others. While some have been in favor of a single currency, others against, all agree that there are costs as well as benefits associated with a single global currency, although they disagree as to their relative magnitudes.
Interesting as the debate is, this is not an area where the World Bank Group is likely to take a strong position. The International Monetary Fund has been designated as the lead agency in monetary issues and we customarily defer to them on issues that, like this, fall within the realm of their comparative advantage…."
Senior Vice President & Chief Economist, World Bank
8 June 2006 (in letter to Morrison Bonpasse, the author.)
"…A single global currency would, according to Bonpasse, benefit the world’s economies by trillions of dollars since it would end transaction costs for currency trading and eliminate the need for and cost of maintaining foreign currency reserves while creating a dramatic one-time increase in global asset values by removing risks of currency fluctuation.
Modeled on the Euro (the currency of the EMU, the European Monetary Union) which it would replace along with all other currencies including the U.S. dollar, the new global currency Bonpasse advocates ideally would eventually, if things were to go according to plan, become the single unifying unit of exchange, store of value, and unit of account for the entire world….
Bonpasse’s book does a very good job explaining the costs and inconveniences of the current system of (mostly) national currencies and fluctuations in exchange rates among them. It offers reasonably plausible observations, largely based upon what success there has been so far in the development and use of the Euro, of how we might get there. It does not, however, dig very deep into the foundations of fiat money or how the modern monetary system actually works and so does not engage very much the considerable obstacles on the way to the single global currency that Bonpasse promotes.
Control (or not) over its monetary system is a key element of the relative prestige and power of a nation. Monetary policies and options are intimately linked to economic, political, and military capabilities and so to national interest. Nations, especially powerful nations, are no more likely to be willing to cede monetary control to an international organization than they are to cede political or military control. Absent a single global government, no single global currency is likely to develop successfully.
Nevertheless, at the very least, Bonpasse’s book poses interesting and provocative questions about the current world monetary order and the possibilities of its future direction. He may well be remembered, in some future world order, as an insightful and prophetic voice who, though perhaps well ahead of his time, foresaw with remarkable accuracy at least the general direction that such matters actually would take in the end…."
Will Zachmann, Duxbury Clipper , Massachusetts, U.S., 17 May 2006
"…In The Single Global Currency: Common Cents for the World, Morrison Bonpasse, the founder and president of the Single Global Currency Association, presents a convincing case that it is a moral imperative for the world’s 191 nations to join together in a global monetary union and collectively save those economies trillions of dollars by adopting one common currency. Offering readers a comprehensive, but accessible journey through this multi-layered issue, Bonpasse calls for the world to set a goal of making the transition to a single currency by 2024…
Bonpasse has a conversational style that brings the economic principles and numbers he uses to life. His stated narrative goal for the book is to “bring simplicity to a complex issue,” and he is able to do this admirably throughout the course of 300-plus pages….
Compared to the costs involved in creating and running this new system, the benefits he lists are impressive. He predicts that the primary benefit of the “euro-like” single currency will be to promote international financial stability. Besides eliminating that $400 billion in transaction costs, a single currency would, among other things, remove balance of payment problems between countries, dispense with the high cost of maintaining foreign exchange reserves, reduce worldwide inflation, and vastly increase the value of the world’s assets.
Single Global Currency is an ambitious book — part history, part economics, part crusade for fairness — and the author does not hesitate to tell us why this issue should matter to everybody: “Money is made by human beings and used by all of them and should, therefore, be understood by everyone.” The book also includes nearly a hundred pages of chapter endnotes, supporting references, appendices, web links, and bibliographic material about the issue.
Bonpasse is an ardent and unabashed champion of his cause, saying, ‘you may be reading the most important book you have ever read, because the topic will save the world—trillions.’ Although there are varying perspectives about the most critical challenges facing us on the planet today, this book makes an important contribution to understanding still more about the enormous benefits that would come from greater global cooperation."
Lincoln County Weekly, Maine, U.S., 26 April 2006