Addendum, 2007

1. David Prosser, "London consolidates lead in global foreign exchange markets," The Independent , 24 October 2006, at http://news.independent.co.uk/business/news/article1919538.ece

2. Foreign Exchange Committee, Federal Reserve Bank of New York, "Semi-Annual Foreign Exchange Volume Survey," April 2006, at http://www.newyorkfed.org/fxc/volumesurvey/2006/aprilfxsurvey2006.pdf

3. Currency Trader , "International Market Summary," September 2006 (page 46), and August 2006 (page 34).

4. J. Alex Tarquinio, "Can the Dollar’s Loss Become Your Portfolio’s Gain?" New York Times , 21 May 2006, at http://select.nytimes.com/gst/abstract.html?res=F70A11FC385A0C728EDDAC0894DE404482&showabstract=1

5. Barbara Rockefeller, "Why is everybody losing money in forex?," Currency Trader , September 2006, at http://www.fxmoneymachine.com/ctm200609.pdf

6. David Leonhardt, "Gambling Against The Dollar," New York Times , 1 November 2006, at http://www.nytimes.com/2006/11/01/business/01leonhardt.html?ex=1320037200&en=036ab20bb5bb104a&ei=5088&partner=rssnyt&emc=rss

7. David Leonhardt, ibid .

8. Reuters, "Bank firm on $645m forex compo claim," The New Zealand Herald , 30 May 2006, at http://login.nzherald.co.nz/?redir=http://www.nzherald.co.nz/search/story.cfm?storyid=000EF4EC-C37D-147A-969883027AF1010F

9. Jeffrey T. Macher and Barak D. Richman , " Transaction Cost Economics: An Assessment of Empirical Research in the Social Sciences," Duke Law School Legal Studies paper 115, August 2006, at http://eprints.law.duke.edu/archive/00001581/

10. Sewell Chan and Matthew Healey, "The World’s Coins Converge in the City’s Meters," New York Times , 12 June 2006, page A 16, at http://select.nytimes.com/search/restricted/article?res=F50F1FFF38550C718DDDAF0894DE404482

11. David A. Kelly, "Practical Traveler: How to Get the Best Rate (and Avoid Fees)," New York Times , 25 June 2006, Page TR 6, at http://travel2.nytimes.com/2006/06/25/travel/25prac.html

12. World Tourism Organization website information, at http://www.traveldailynews.com/new.asp?newid=31023&subcategory_id=109

13. Eduardo Porter, "Flow of Immigrants’ Money To Latin America Surges," New York Times , 19 October 2006, page A24, at http://www.nytimes.com/2006/10/19/us/19migrants.html?ex=1318910400&en=d34d106270048e26&ei=5088&partner=rssnyt&emc=rss

14. Congressional Research Service, "Report to Congress: U.S. Foreign Assistance to Latin America and the Caribbean," January 2006, at http://www.nationalaglawcenter.org/assets/crs/RL32487.pdf

15. Tahsin Saadi-Sedik and Martin Petri, " To Smooth or Not to Smooth – The Impact of Grants and Remittances on the Equilibrium Real Exchange Rate in Jordan," IMF Working paper 06/257, at http://www.imf.org/external/pubs/ft/wp/2006/wp06257.pdf

16. Peter Garnham, "Euro soars against greenback as US rates ease," The Australian , 29 November 2006, at http://www.theaustralian.news.com.au/printpage/0,5942,20838136,00.html .

17.Rodrigo de Rato, "Ensuring Global Economic Stability," Borsen-Zeitung , 12 September 2006, at http://www.imf.org/external/np/vc/2006/091206.htm

18. Francis Warnock, "How Might a Disorderly Resolution of Global Imbalances Affect Global Wealth?" IMF Working Paper 06/170, 1 July 2006, at http://www.imf.org/external/pubs/ft/wp/2006/wp06170.pdf

19. Keith Bradsher, "Leading Asian Economist Urges Joint Action on Dollar," The New York Times , 8 December 2006, page C6, at http://www.nytimes.com/2006/12/08/business/worldbusiness/08dollar.html

20. Michael Wines, "Zimbabwe, Subtracting Zeros, Adds To Discontent," New York Times , 8 August 2006, at http://select.nytimes.com/gst/abstract.html?res=F40C16F6355B0C7B8CDDA10894DE404482&showabstract=1

21. See the text and audio versions of the Abbott and Costello routine, at http://www.baseball-almanac.com/humor4.shtml

22. TradeArabia, "Euro to overtake the dollar by 2015, says UAE official," 18 November 2006, at http://www.tradearabia.com/tanews/newsdetails_snCM_article114607_cnt.html

23. Gabriele Galati and Philip Wooldridge, "The euro as a reserve currency: a challenge to the pre-eminence of the US dollar?" Bank for International Settlements, Working Papers No. 218, October 2006, at http://www.bis.org/publ/work218.htm

24. John Partridge, "Launch of Iranian Oil Market hits Wall," Globe and Mail, 14 March 2006, at http://www.theglobeandmail.com/servlet/Page/document/v4/sub/MarketingPage?user_URL=http://www.theglobeandmail.com%2Fservlet%2Fstory%2FLAC.20060314.RIRAN14%2FTPStory%2F%3Fquery%3Dbourse&ord=15021960&brand=theglobeandmail&redirect_reason=2&denial_reasons=none&force_login=false

25. "Iran replaces dollar with euro in most oil dealings," MEHRNEWS.com, 5 December 2006, at http://www.mehrnews.com:80/en/NewsDetail.aspx?NewsID=416994

26. Peter Garnham, op cit.

27. Tony Vorobyova, "FOREX-Euro rallies as Sweden ups its FX reserves share," Reuters, 21 April 2006, at http://www.global-view.com/research/index.html?nid=5093

28. TradeArabia, op cit .

29. Ewe-Ghee Lim, "The Euro’s Challenge to the Dollar: Different Views from Economists and Evidence from COFER (Currency Composition of Foreign Exchange Reserves) and other Data," IMF Working Paper 06/153, June 2006, at http://www.imf.org/external/pubs/ft/wp/2006/wp06153.pdf

30. Chris Flood, "Bundesbank boosts sentiment for gold market," Financial Times , 6 October 2006, at http://www.ft.com/cms/s/15eeae1a-5493-11db-901f-0000779e2340.html

31. Gregory Hess and Kwanho Shin, "Understanding the Backus-Smith Puzzle: It’s the (Nominal) exchange Rate, Stupid," February 2006, MPRA Paper No. 696, at http://mpra.ub.uni-muenchen.de/696/01/MPRA_paper_696.pdf See also the phrase "It’s the currency, stupid" at page 166 of the 06 Edition.

32. Raghuram Rajan and Eswar Prasad, "Controlled Capital Account Liberalization: A Proposal," IMF Policy Discussion Paper, 05/07, November 2005, at http://www.imf.org/external/pubs/ft/pdp/2005/pdp07.pdf See also Nicolas Magud, Carmen Reinhart and Kenneth Rogoff, "Capital Controls: Myth and Reality – A Portfolio Balance Approach to Capital Controls, November 2005, at http://economics.uoregon.edu/papers/UO-2006-10_Magud_Controls.pdf

33. Rodrigo de Rato, speech at the Foro de Cadiz – "How Europe can Help the Global Economy while Helping Itself," 21 November 2006, at

http://www.imf.org/external/np/speeches/2006/112106.htm

34. Joseph Stiglitz, Making Globalization Work, The Next Steps to Global Justice , London, Penguin Books, 2006, page 259.

35. Joseph Stiglitz, Making Globalization Work , ibid , page 265.

36. Clyde Prestowitz, Three Billion New Capitalists – The Great Shift of Wealth and Power to the East , New York, Basic Books, 2005, page 187.

37. Niall Ferguson, "Reasons to Worry," New York Times Magazine ,11 June 2006, at http://select.nytimes.com/search/restricted/article?res=F00D13FC3F550C728DDDAF0894DE404482

38. Rodrigo de Rato, 21 November 2006, op cit.

39. Journal of Policy Modeling , Volume 28, Issue 6, "Twin Deficits: Growth and Stability of the U.S. Economy," September 2006, at http://www.sciencedirect.com/science?_ob=PublicationURL&_tockey=%23TOC%235858%232006%23999719993%23630455%23FLA%23&_cdi=5858&_pubType=J&view=c&_auth=y&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=432047cac51e9ccbf2e8708e5badbb34

40. Richard Cooper, "Living with global imbalances: A contrarian view" in Journal of Policy Modeling , ibid .

41. Andrew Rose, "A Stable International Monetary System Emerges: Bretton Woods Reversed," Centre for Economic Policy Research, C.E.P.R. Discussion Paper 5854, September 2006, at http://www.cepr.org/pubs/new-dps/dplist.asp?dpno=5854.asp

42. Robert G. Williams, The Money Changers , a guided tour through the global currency markets , London and New York, Zed Books, 2006, page 245. This is an easy-to-read, conversational style book about the currency markets.

43. Joseph Stiglitz, Making Globalization Work , op cit , page 249.

44. Joseph Stiglitz, Making Globalization Work , op cit , page 247.

45. ChinaToday.com, "Monthly trade surplus hits new high," at http://www.chinatoday.com/trade/a.htm

46. U.S. Treasury Dept., U.S. International Reserve position, 24 November 2006, at http://www.treas.gov/press/releases/20061241425214517.htm

47. U.S. Dept. of Commerce, U.S. International Trade in Goods and Services, September 2006, at http://bea.gov/bea/newsrelarchive/2006/trad0906_fax.pdf

48. Joseph Stiglitz, Making Globalization Work , op cit , page 251.

49. See, e.g., Olivier Jeanne and Romain Ranciere, "The Optimal Level of International Reserves for Emerging Market Countries: Formulas and Applications," IMF Working paper 06/229, October 2006, at http://www.imf.org/external/pubs/ft/wp/2006/wp06229.pdf

50. Elias Papaioannou and Richard Portes, "Optimal Currency Shares in International Reserves: The Impact of the Euro and the Prospects for the Dollar," CEPR Discussion Paper, No 5734, at http://www.cepr.org/pubs/new-dps/dplist.asp?dpno=5734.asp

51. Eduardo Yeyati, "The Cost of Reserves," Universidad Torcuato Di Tella Working Paper 10, July 2006, at http://www.utdt.edu/Upload/CIF_wp/wpcif-102006.pdf

52. Andrea Terzi, "International Financial Instability in a World of Currencies Hierarchy," Universita Cattolica del Sacro Cuore, Milano, October 2006, page 4, at http://www.unicatt.it/Istituti/EconomiaFinanza/Quaderni/641005.pdf

53. Angola Press, "COMESA summit a great success: Secretary General," 23 November 2006, at http://www.angolapress-angop.ao/noticia-e.asp?ID=489792 .

54. Charalambos Tsangarides and Mahvash Saeed Qureshi, "What is Fuzzy About Clustering in West Africa?," IMF Working Paper 06/90, March 2006, at http://www.imf.org/external/pubs/ft/wp/2006/wp0690.pdf

55. Marie-Louise Gumuchian, "Rwanda, Burundi join East Africa Community," Washington Post , from Reuters, 30 November 2006, at http://www.washingtonpost.com/wp-dyn/content/article/2006/11/30/AR2006113000296.html

56. John Williamson, "Choosing Monetary Arrangements for the 21st Century: problems of a small economy," Peterson Institute of International Economics, Policy Brief PBO6-8, November 2006, at http://www.iie.com/publications/pb/pb06-8.pdf

57. Janine Rossouw, "An Analysis of Macro-Economic Convergence in SADC ," South African Journal of Economics , September 2006, page 385 at http://www.blackwell-synergy.com/doi/abs/10.1111/j.1813-6982.2006.00080.x

58. Carter Dougherty, "In Eastern Europe, a Switch to the Euro Comes Slowly," New York Times, 6 December 2006, page C2, at http://www.nytimes.com/2006/12/06/business/worldbusiness/06euro.html . See also the December 2006 "Convergence Report of the European Central Bank" at http://www.ecb.int/pub/pdf/conrep/cr200612en.pdf .

59. Ales Bulir and Jaromir Hurnik, "The Maastricht Inflation Criterion: How unpleasant is Purgatory?" IMF Working Paper 06/154, June, 2006, at http://www.imf.org/external/pubs/ft/wp/2006/wp06154.pdf . See also Anthony Annett, "Enforcement and the Stability and Growth Pact: How Fiscal Policy Did and Did Not Change Under Europe’s Fiscal Framework, Washington IMF Working Paper 06/116, May, 2006, at http://www.imf.org/external/pubs/ft/wp/2006/wp06116.pdf .

60. Luca Di Leo and Joellen Perry, "Italy Credit Downgrade May Undermine Euro Zone," Wall Street Journal , 20 October 2006, at http://users1.wsj.com/lmda/do/checkLogin?mg=wsj-users1&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB116129176975298154.html%3Fmod%3Dtodays_us_page_one

61. See the work of the National Euro Changeover Committee at http://mfin.gov.mt/page.aspx?site=NECC&page=default , and the "Euro adoption" section of the website of the Central Bank of Malta at http://www.centralbankmalta.com/site/euroadoption.html .

62. Marco Ercolani and Jayasri Dutta, "The Euro-changeover and Euro-inflation: Evidence from Eurostat’s HICP," University of Birmingham Discussion Paper, February 2006, at ftp://ftp.bham.ac.uk/pub/RePEc/pdf/ErcolaniDutta0603.pdf

63. See the work of the Cyprus National Advisory Committee on the euro changeover, at http://www.euro.cy/euro/euro.nsf/dmlindex_en/dmlindex_en?opendocument .

64. Francesco Daveri and C. Jona-Lasinio, "Italy’s decline: getting the facts right," Parma University Working Papers EP01, January 2006, at http://swrwebeco.econ.unipr.it/RePEc/pdf/I_2006-01.pdf

65. European Commission, "Flash EB Series #183, Introduction of the euro in the new Member States, Wave 3," April 2006, at http://ec.europa.eu/public_opinion/flash/fl183_en.pdf

66. Boris Groendahl and Stella Dawson, Reuters, "ECB’s Liebscher says euro referenda out of question," Times of Malta , 27 November 2006, at http://www.timesofmalta.com/core/article.php?id=244434

67. Speech by Krzysztof Rybinski, Deputy President of National Bank of Poland, "Single euro payments area from the point of view of the National Bank of Poland," Warsaw, 10 October 2006, at http://www.bis.org/review/r061018d.pdf

68. Charlie McGreevy, "Time to Deliver on SEPA," speech delivered at the SEPA Congress in Frankfurt, 13 November 2006, at http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/06/679&format=HTML&aged=0&language=EN&guiLanguage=en

69. Commission of the European Communities, "The EU Economy 2006 Review – Adjustment Dynamics in the Euro Area, Experiences and Challenges," 22 November 2006, at http://ec.europa.eu/economy_finance/publications/european_economy/2006/ee606_en.pdf

70. Reuters, "Oman won’t join Gulf monetary union in 2010," Khaleej Times online, 9 December 2006, at http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=data/business/2006/December/business_December272.xml&section=business

71. International Monetary Fund Press Release, No. 06/240, 4 November 2006, at http://www.imf.org/external/np/sec/pr/2006/pr06240.htm

72. Julian Berengaut and Katrin Elborgh-Woytek, "Beauty Queens and Wallflowers – Currency Unions in the Middle East and Central Asia," IMF Working paper 06/226, October 2006, at http://www.imf.org/external/pubs/ft/wp/2006/wp06226.pdf

73. Hasan Sahin, "MENA countries as optimal currency areas: Reality or dream?" Journal of Policy Modeling , July 2006, at http://www.sciencedirect.com/science/article/B6V82-4K674S7-5/2/d54fea6e2d0ea269aa1b90bf0a852289

74. "Economist warns of slowdown of SE Asian economies as interest rates rise," The People’s Daily , 9 September 2006, online, at http://english.people.com.cn/200509/09/eng20050909_207506.html

75. Eiji Ogawa and Kentaro Kawasaki, "Adopting a common currency basket arrangement into the ‘ASEAN plus three’ ," RIETI Discussion Paper 06-E-028, June 2006, at http://www.rieti.go.jp/jp/publications/dp/06e028.pdf and by the same authors, "What Should the Weights of the Three Major Currencies be in a Common Currency Basket in East Asia?," Asian Economic Journal , March 2006, page 75, at http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-8381.2006.00225.x?prevSearch = and by Eiji Ogawa and Junko Shimizu, "Stabilization of effective exchange rates under common currency basket systems," Journal of the Japanese and International Economies , December 2006, at http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6WMC-4M3RP35-1&_coverDate=12%2F31%2F2006&_alid=500166248&_rdoc=1&_fmt=&_orig=search&_qd=1&_cdi=6931&_sort=d&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=9f6b2080156a9994d776561a49c36aa4

76. Hans Genberg, "Exchange-Rate Arrangements and Financial Integration in East Asia: On a Collision Course?" May 2006, at http://www.bankofgreece.gr/publications/pdf/Paper200641.pdf as presented at the 24-25 February 2006 conference in Vienna organized by George Tavlas of the Bank of Greece and Eduard Hochreiter of the Oesterreichische Nationalbank.

77. Bill Savadove, "Yuan reaches unofficial parity with HK dollar," South China Morning Post , Hong Kong, 28 November 2006, page A4.

78. Xinpeng Xu, "A currency union for Hong Kong and Mainland China?" Journal of International Money and Finance , October 2006, at http://www.sciencedirect.com/science/article/B6V9S-4KKFP1B-1/2/f983cbe7ed0af3e4987865a387c189cd

79. Tim Dick, "Push for Common Anzac Currency," The Sydney Morning Herald , 5 December 2006, at http://www.stuff.co.nz/stuff/0,2106,3888577a13,00.html

80. Christopher Browne and David Orsmond, "Pacific Island Countries — Possible Common Currency Arrangement," IMF Working paper 06/234 at http://www.imf.org/external/pubs/ft/wp/2006/wp06234.pdf

81. Brown and Orsmond, ibid , page 14.

82. Eric Helleiner, Towards North American Monetary Union? The Politics and History of Canada’s Exchange Rate Regime , Montreal, McGill-Queen’s University Press, 2006, 352 pages.

83. Sven Arndt, "Regional Currency Arrangements in North America," May 2006, at http://www.bankofgreece.gr/publications/pdf/Paper200640.pdf and as presented at the 24-25 February 2006 conference in Vienna organized by George Tavlas of the Bank of Greece and Eduard Hochreiter of the Oesterreichische Nationalbank.

84. Theodore di Stefano, "Monetary Unions: Are We On Our Way?" E-Commerce Times ," 2 June 2006, at http://www.ecommercetimes.com/story/50828.html

85. European Commission, "Monetary and exchange rate agreements between the European Community and Third Countries," Economic Paper 255. September 2006, at http://ec.europa.eu/economy_finance/publications/economic_papers/2006/ecp255en.pdf

86. Associated Press, "South American Summit dreams of uniting continent’s governments, people," International Herald Tribune , 8 December 2006, at http://www.iht.com/articles/ap/2006/12/09/america/LA_GEN_Bolivia_Summit.php

87. Latin Business Chronicle.com , "A common currency for Mercosur?" 5 September 2006, at http://www.latinbusinesschronicle.com/app/login_info.aspx?r=%2fapp%2farticle.aspx%3fid%3d350&msg=no_login

88. European Commission, "Monetary and exchange rate agreements between the European Community and Third Countries," op cit . page 39.

89. Helen Murphy, "Ecuador Bonds may Fall; Exit polls show Correa Winning Election," Bloomberg , 27 November 2006 at http://www.bloomberg.com/apps/news?pid=20670001&refer=news&sid=a31B5.qZxWgo

90. Manuel Hinds, Playing Monopoly with the Devil: Developing World Needs to Adopt the Dollar as its Currency , New Haven, Yale University Press, 2006.

91. Jiro Honda and Liliana Schumacher, "Adopting Full Dollarization in Postconflict Economies: Would the Gains Compensate for the Losses in Liberia?" IMF working Paper 06/82, April 2006, at http://www.imf.org/external/pubs/ft/wp/2006/wp0682.pdf

92. Matthew Lynn, "Time to liberate Eastern Europe from the euro," Bloomberg News , 7 May 2006, at http://www.thebusinessonline.com/Stories.aspx?StoryId=B49CD036-87ED-4620-86E4-0AD840330A8E&page=0

93. Ambrose Evans-Pritchard, "Why the breakup of faltering euro could be the way ahead," Daily Telegraph , 16 September 2006, at http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/09/18/ccview18.xml

94. Howard R. Vane and Chris Mulhearn, "Interview with Robert Mundell," Journal of Economic Perspectives , Vol. 20, No. 4, Fall 2006, page 99, at http://www.atypon-link.com/doi/abs/10.1257/jep.20.4.89 .

95. Joseph Stiglitz, Making Globalization Work , op cit , page 4.

96. Robert Wade, "The Case for a Global Currency," International Herald Tribune , 4 August 2006, at http://www.iht.com/articles/2006/08/03/opinion/edwade.php

97. Joseph Stiglitz, "How to Fix the Global Economy," The New York Times, Op-Ed, 3 October 2006, page 27, at http://select.nytimes.com/search/restricted/article?res=F20E1FFA3F540C708CDDA90994DE404482

98. Andrea Terzi, "International Financial Instability in a World of Currencies Hierarchy," Universita Cattolica del Sacro Cuore, Milano, October 2006, page 20, at http://www.unicatt.it/Istituti/EconomiaFinanza/Quaderni/641005.pdf

99. Michael Bordo and Harold James, "One World Money, Then and Now," Cambridge, February, 2006, National Bureau of Economic Research, at http://www.nber.org/papers/w12189 and also presented at the 24-25 February 2006 conference in Vienna.

100. Sergio Schmukler, "Discussion: Exchange Rate Arrangements and Disarrangements" Prospects for a World Currency," March 2006, at page 43 of Oesterreichische Nationalbank Working Paper 127, http://www.oenb.at/de/img/wp127_tcm14-42690.pdf

101. Barry Eichengreen and Raul Razo-Garcia, "The International Monetary System in the Last and Next 20 Years," Economic Policy , July 2006, pp 393-442 at page 416, at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=916598

102. Philip Arestis, Santonu Basu, and Sushanta Mallick, "Financial Globalization: the need for a single currency and global central bank," Journal of Post Keynesian Economics , Spring 2005, pp 507-531, at page 508, at http://mesharpe.metapress.com/(pkospvf3wjgs55qbdbcsnhra)/app/home/contribution.asp?backto=issue,11,13;journal,7,17;linkingpublicationresults,1:109348,1

103. ibid, page 522.

104. ibid , page 523.

105. ibid , page 526-27.

106. ibid, page 529.

107. Barry Carin and Gordon Smith, "Making Change Happen at the Global Level," Chapter 1 in John English, editor, et al., Reforming from the Top – a Leaders’ 20 Summit , New York, United Nations University Press, October 2005, at http://www.globalcentres.org/html/pdf/G20%20pdf/Making%20Change%20Happen%20at%20the%20Global%20Level.pdf .

108. Joseph Stiglitz, Making Globalization Work , op cit , page 4.

109. Joseph Stiglitz, Making Globalization Work , op cit , page 21.

110. Charalambos G. Tsangarides, Pierre Ewenczyk and Michal Hulej, "Stylized Facts on Bilateral Trade and Currency Unions: Implications for Africa," IMF Working Paper No. 06/31, January 2006, at http://www.imf.org/external/pubs/ft/wp/2006/wp0631.pdf

111. Email from the authors to the article’s authors, Charalambos G. Tsangarides, Pierre Ewenczyk and Michal Hulej, on 28 November 2006.

112. Charalambos Tsangarides and Yasser Abdih, "FEER for the CFA Franc," IMF Working Paper 06/236, October 2006, at http://www.imf.org/external/pubs/ft/wp/2006/wp06236.pdf

113. Warren Leary, "NASA Plans Permanent Moon Base," The New York Times , 5 December 2006, page 1, at http://www.nytimes.com/2006/12/05/science/space/05nasa.html?_r=1&oref=slogin

114. Seth Borenstein, "NASA: Moon Base Cost Won’t Be Sky High," Associated Press in Forbes , online, at http://www.forbes.com/technology/ebusiness/feeds/ap/2006/12/09/ap3241901.html

115. Editorial, "Back to the Moon, Permanently," New York Times , 9 December 2006, at http://www.nytimes.com/2006/12/09/opinion/09sat2.html?_r=1&oref=slogin

116. "European Commission, "Flash Eurobarometer 175 – The euro, 4 years after the introduction of the banknotes and coins," Analytical report in November, 2005 by EOS Gallup Europe, at http://ec.europa.eu/public_opinion/flash/fl175_en.pdf

117. Carter Dougherty, "Portugal looks to heal exhausted economy," International Herald Tribune , 14 June 2006, at http://www.iht.com/articles/2006/06/13/business/portugal.php

118. Howard R. Vane and Chris Mulhearn, "Interview with Robert Mundell," Journal of Economic Perspectives , Vol 20, No. 4, Fall 2006, page 106. 89-110, at http://www.atypon-link.com/doi/abs/10.1257/jep.20.4.89 . The cited reference was to one of Paul Volcker’s restatements of "A global economy requires a global currency" was in a 27 January 2000 speech, at http://www.trilateral.org/membship/membtxts/pv/000127.htm . He said, My sense is that if we are to have a truly globalized economy, with free movement of goods, services and capital, a world currency makes sense."

119. Richard Cooper, "Proposal for a Common Currency among Rich Democracies," page 5, presented at the �Regional and International

Currency Arrangements� conference, held in Vienna on 24-25 February 2006. It was jointly organized by George Tavlas (Bank of Greece) and Eduard Hochreiter (Oesterreichische Nationalbank). The article appears at http://www.oenb.at/en/presse_pub/research/020_workingpapers/wp2006/working_paper_127.jsp#tcm:16-42750

120. ibid , page 6.

121. Barry Eichengreen, "On the Sequencing of regional integration: General considerations and an application to Asia," The North American Journal of Economics and Finance , December 2006, at http://www.sciencedirect.com/science/article/B6W5T-4KKFPHJ-1/2/edbf1512e0a42721857624af20a9874c

122. Anne Kester, "IMF Data Standards Initiatives – A Consultative Approach to Enhancing Global Data Transparency, IMF Working Paper 06/102, April 2006, at http://www.imf.org/external/pubs/ft/wp/2006/wp06102.pdf

123. Robert Wade, op cit. .

124. Frederic Rochelle, "The EU needs to step up to reform the international financial system," NewEuropeans Magazine, 29 September 2006, at http://www.newropeans-magazine.org/index.php?option=com_content&task=view&id=4649&Itemid=110

125. Nilolai Hovanov, James Kolari, and Mikhail Sokolov, "Synthetic Money," International Review of Economics and Finance , June 2006, at http://www.fma.org/NewOrleans/Papers/7101144.pdf

126. Joseph Stiglitz, Making Globalization Work , op cit, page 260.

127. Joseph Stiglitz, Making Globalization Work , op cit , page 261.

128. Joseph Stiglitz, Making Globalization Work , op cit , page 263.

129. Joseph Stiglitz, Making Globalization Work , op cit , page 263.

130. Joseph Stiglitz, Making Globalization Work , op cit , page 269.

131. Clyde Prestowitz, Three Billion New Capitalists – The Great Shift of Wealth and Power to the East , New York, Basic Books, 2005, page 257.

132. Richard Cooper, op cit, and Michael Bordo and Harold James, op cit.

133. John Williamson, "Choosing Monetary Arrangements for the 21st Century: problems of a small economy," Peterson Institute of International Economics, Policy Brief PBO6-8, November 2006, at http://www.iie.com/publications/pb/pb06-8.pdf

134. International Monetary Fund. "The Managing Director’s Report on the Fund’s Medium-Term Strategy," 15 September 2005, at http://www.imf.org/external/np/omd/2005/eng/091505.pdf .

135. International Monetary Fund, "Report on Implementing the Fund’s Medium-Term Strategy," 5 April 2006, at http://www.imf.org/external/np/pp/eng/2006/040506.pdf

136. International Monetary Fund, "Statement by Rodrigo de Rato, Managing Director of the International Monetary Fund, on the Work Program of the Executive Board," 30 November 2006, at http://www.imf.org/external/np/sec/pr/2006/pr06267.htm

137. Letter from Kathleen White, External Affairs, IMF, 12 September 2006 to the author, as posted at http://www.singleglobalcurrency.org/latest_news.html

138. Dennis Leech and Robert Leech, "Voting Power Implications of a Unified European Representation at the IMF," Warwick Economics Research Paper Series, No. 720, January, 2005, at http://www2.warwick.ac.uk/fac/soc/economics/research/papers/twerp720.pdf

139. Tahsin Saadi-Sedik and Martin Petri, " To Smooth or Not to Smooth – The Impact of Grants and Remittances on the Equilibrium Real Exchange Rate in Jordan," IMF Working paper 06/257, at http://www.imf.org/external/pubs/ft/wp/2006/wp06257.pdf

140. International Monetary Fund, "Statement by IMF Staff Mission to Mali, Press Release No. 06/260, 21 November 2006, at http://www.imf.org/external/np/sec/pr/2006/pr06260.htm .

141. Celia Dugger, "Peace Prize to Pioneer of Loans To Poor No Bank Would Touch," New York Times , 14 October 2006, at http://www.nytimes.com/2006/10/14/world/asia/14nobel.html?ex=1318478400&en=8d70ad89b584ca06&ei=5088&partner=rssnyt&emc=rss

142. Howard Vane and Chris Mulhearn, "An Interview with Robert Mundell," op cit ., page 109.

143. Paul Jenkins, Senior Deputy Governor of the Bank of Canada, "What monetary policy can and cannot do," Presentation to the Canadian Institute of Actuaries, Ottowa, 29 June 2006, at http://www.bis.org/review/r060707c.pdf

 

 

Introduction to 2006, original edition.

1. Thomas Paine, Common Sense, Rights of Man, and other essential writings of Thomas Paine , New York, NY: New American Library, 2003, p. 3, Introduction.

 

2. The fifteen currencies belong to: Argentina, Australia, Canada, Eastern Caribbean Monetary Union, Eritrea, European Monetary Union, Gambia, Guyana, Malta, New Zealand, Singapore, South Africa, Sri Lanka, United States, and Zimbabwe. Sources: http://en.wikipedia.org/wiki/Cents and

www.google.com for (cents coins currency). The legitimacy of Wikipedia as a source is confirmed by Thomas L. Friedman in The World is Flat , New York, NY: Farrar Straus and Giroux, 2005, who said at page 94 that he used this source regularly. On the other hand, Wikipedia is not always reliable. The current Wikipedia entry for "Global Currency," as of 15 February 2006, is an example of how public awareness of the Single Global Currency needs to be changed. The entry reads: "A global currency, in the form of a modern currency produced and supported by a central bank, like euro and dollar, will never be made. There are many fundamental problems that simply cannot be fixed. Both political problems and economicy[sic]-theoretical problems." At http://en.wikipedia.org/wiki/Global_currency.

  As Wikipedia is the peoples’ "free encyclopedia," which can be edited by its viewers, it will be interesting to see how long it takes for that entry to be improved.

 

3. The Rosetta Stone was discovered in 1799 in El Rashid (Rosetta), Egypt by soldiers in Napoleon’s army while digging to construct an addition to a fort. Written approximately in 19 B.C., the stone contains a decree to priests in three languages: Egyptian hieroglyphs, a local script called demotic, and Greek. This discovery enabled the first translations of the heretofore undecipherable hieroglyphs. The Stone was donated to the British Museum by King George III, whose common sense in this regard would likely have impressed even Thomas Paine. See http://www.thebritishmuseum.ac.uk/compass/ixbin/goto?id=OBJ67

The Arthurian reference is to the legend that Arthur became King of England after pulling a sword from a stone. See http://www.kingarthursknights.com/faq/swordstone.asp.

 

4. The value of the euro was established in the Spring 1998 as equivalent to a precise quantity of each of the currencies of the twelve participating countries, e.g., equal to 40.3399 Belgian francs. See list of currencies and their values at http://www.ecb.int/bc/intro/html/index.en.html. On the first trading day of the euro, Friday, 1 January 1999, those 40.3399 Belgian francs, and 1.95582 German deutschmarks, etc., were all equal to 1.16692 US dollars and equivalents in other currencies. From that point forward, all foreign exchange trading with the twelve legacy currencies stopped and trading began with the euro. On Sunday afternoon (GMT), 4 January, with trading beginning in New Zealand on Monday morning local time, 5 January, the euro dropped to 1.1760. See FX Converter at http://www.oanda.com/convert/classic.

 

5. The original quote was in George Bernard Shaw’s play, Back to Methuselah , Act I, Selected Plays with Prefaces , vol. 2, p. 7 (1949). The serpent says to Eve, "You see things; and you say ‘Why?’ But I dream things that never were; and I say ‘Why not?’ "
  President John F. Kennedy quoted these words in his address to the Irish Parliament, Dublin, 28 June 1963. Public Papers of the Presidents of the United States: John F. Kennedy , 1963, p. 537.
  Senator Robert F. Kennedy used a similar quotation as a theme of his 1968 campaign for the presidential nomination: �Some men see things as they are and say, why; I dream things that never were and say, why not.� Senator Edward M. Kennedy quoted these words of Robert Kennedy in his eulogy for his brother in 1968. ( The New York Times , 9 June 1968, p. 56; Source: www.bartleby.com Respectfully Quoted: A Dictionary of Quotations , 1989.)

 

6. Astonishingly, the 2005, 362-page, first edition of Economics for Dummies , does not mention "balance of payments," nor "Bretton Woods," nor the euro. It makes only one mention of "exchange rates" on page 330 with the note that countries can manipulate the exchange rate of their own currencies to make their exports cheaper, which is true. Sean Masaki Flynn. Economics for Dummies. Hoboken, NJ: Wiley Publishing, 2005.

 

7. The abbreviation "3-G s " here will save space and perhaps conjure an image of humankind accelerating into a new economic world, freed of the dynamics previously thought to be as permanent as gravity. Incidentally, three G s (as in: three times the force of gravity) are within the boundaries of space flight where astronauts endure gravitational pressures of approximately 3 G s , or three times the force of gravity, at launch, but face approximately 6 G s upon re-entry.

 

8. The term "Eurozone" is used in this book as shorthand for the countries of the European Monetary Union, which includes all of the European Union countries except Denmark, Sweden, and the United Kingdom of Britain and Northern Ireland.

 

9. The estimated cost of the Apollo moon voyages in the 1960s was reportedly $25.4 billion in 1960s US dollars. See BBC’s "Apollo Missions: The Conclusion," at http://www.bbc.co.uk/dna/h2g2/A830774. The Economic History Association’s website EH.net has an excellent utility to determine the value of US dollars between any two years between 1704 and 2004. Calculations can be made using the Consumer Price Index (CPI) or GDP per capita or other indices. Using the CPI, the $25.4 billion (arbitrarily using the year 1969), was equivalent to $131.0 billion in 2004. Using the GDP per capita index, it would have been equivalent to $208.9 billion. See http://www.eh.net/hmit/compare/.

Chapter 1. The Expensive, Complex, and Hazardous Multicurrency Foreign Exchange World

1. The rhythm for the title of this chapter may have come from reading aloud Judith Viorst’s Alexander and the Terrible, Horrible, No Good, Very Bad Day , to granddaughters Madeline and Cameron. New York, NY: Aladdin Paperbacks, Simon & Shuster, 1972.

 

2. The count of 147 comes from the listing on the Single Global Currency

Association website, www.singleglobalcurrency.org/currencies_by_country.html. The calculations start with the number 184 which was the number of full nation-state members of the United Nations in 1994. Then are subtracted the countries who are fully "ized" (Dollarized(2) where the US Dollar is legal tender, and Euroized(4) where the Euro is legal tender) and are subtracted the countries which belonged to monetary unions as of that year. Then the new U.N. members are added and further subtractions are made for izing or formation of monetary unions. Where a monetary union includes two mutually legal tender currencies, the count of currencies is one, as is the case with the Singapore/Brunei Darussalam monetary union.

  As with many count-em-ups, a lot depends upon definition, and the choice of the 191 U.N. members is a stake-in-the-ground starting point. There are actually many more currencies in the world. In addition to the "complementary" or "private" currencies which are discussed later, there are a number of territories or countries with ambiguous political status which have convertible currencies, such as Netherlands Antilles, Aruba, Cayman Islands, Falkland Islands, Hong Kong, Macao, and Taiwan.

 

3. The term "currency area" became best known with the 1961 publication of Robert Mundell’s "A Theory of Optimum Currency Areas," American Economic Review , May 1961, pp. 657-65. The article is also contained in Robert Mundell’s textbook, International Economics , as Chapter 12, pp. 177-86, and online at http://www.columbia.edu/~ram15/ie/ie-12.html. He originally defined "currency area" as a "domain within which exchange rates are fixed," at p. 662.

 

4. This $2.5 trillion estimate is calculated in two ways. First, we take the $1.9 trillion baseline for April, 2004, from the Bank for International Settlements report, and multiply by the conservatively estimated 32 percent increase in trading from April, 2004 to 21 December, 2005. See Bank for International Settlements, 75th Annual Report , Chapter 6, "Foreign Exchange Markets," issued 27 June 2005, pp. 77-87, at http://www.bis.org/publ/arpdf/ar2005e5.htm. That report, in turn, references the "Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity in April 2004–Preliminary Global Results," B.I.S., 28 September 2004, at http://www.bis.org/press/p040928.htm. The final results were published in March, 2005, at http://www.bis.org/publ/rpfx05.htm.

  Another method would be to take the reported daily volumes from London, New York, and Singapore on October 2005, of $.73 trillion, $.37 trillion and $.20 trillion respectively, and divide by their respective shares of the foreign exchange market, as taken from the earlier Triennial Survey, above, of 31 percent, 19 percent and 5 percent, respectively. Those extrapolated worldwide volumes average to $2.4 trillion. The city totals are reported at http://www.bankofengland.co.uk/markets/forex/fxjsc/fxturnresults060123.pdf, and http://www.newyorkfed.org/fxc/2006/fxc012306.pdf and http://www.sfemc.org/statistics/fxvol23jan2006.pdf, respectively.

 

5. These totals for the non-traditional, or "derivatives" or "over the counter" are not included in the above totals as their numbers are less reliable. The numbers in the text are extrapolated from the London, New York, and Singapore Reports, from endnote 4, above, but the 2005 B.I.S. Triennial report states that the worldwide daily trading in these instruments was $1.2 trillion, or almost as large as for the traditional instruments.

 

6. "Babson Economist Works to Reduce World Poverty," Interview with Babson Prof. Maria Minniti, Boston Globe , 6 November 2006, p. A31.

 

7. Senator Everett Dirksen was a US Senator from Illinois and he used to tell a story to the same effect: " An old man once taught me what a million is. He said, look at your watch, and watch the second hand. You can see it every second, every minute, every day, every night, every week, every month, every year–and in three years it would go around 1,000,000 times. " from http://en.thinkexist.com/quotes/everett_dirksen/. However, it would actually take a little less than two years as there are 525,600 minutes in a year.

 

8. This estimate of $42.2 trillion was calculated using the World GDP number from the World Bank data for 2004 of $40.89 trillion, and the World Bank’s estimate in November, 2005 of a 3.2 percent growth rate for 2005. See "Prospects for the Global Economy," 16 November 2005, at http://web.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTDECPROSPECTS/EXTGBLPROSPECTS/0,,contentMDK:20665612~menuPK:612510~p.PK:64218950~piPK:64218883~theSitePK:612501,00.html

 

9. New York Stock Exchange, online statistics at http://www.nyse.com/Frameset.html?displayP.=/marketinfo/1022221393893.html

 

10. "FX Volume Survey Results," Foreign Exchange Committee of the Federal Reserve Bank of New York, http://www.newyorkfed.org/fxc/volumesurvey/

 

11. "A Little Perspective on $87 billion," Crunchweb.net , Alexandria, Virginia, at http://www.crunchweb.net/87billion/

 

12. "Apollo 8," National Space Data Center, National Aeronautics and Space Administration (NASA), at http://nssdc.gsfc.nasa.gov/planetary/lunar/apollo8info.html.

 

13. This concept that foreign exchange represents the bartering of different goods, i.e., currencies, is, like some other ideas, an idea that I thought I developed on my own. As with most such ideas, there indeed was at least someone else. In this case, Richard Cooper had this to say, "Yet the exchange rate is technically not anchored by anything in the long run, being the barter price between two nominal variables (as Kareken and Wallace pointed out two decades ago)," at Richard Cooper, "Toward A Common Currency?" June 2000, p. 18, presented at the conference on the Future of Monetary Policy and Banking, organized by the IMF and the World Bank, at http://www.worldbank.org/research/interest/confs/upcoming/papersjuly11/cooper.pdf.

 

14. For an impassioned statement of the value of money, see "Francisco’s Money Speech" in Ayn Rand’s Atlas Shrugged , 1957, at http://capmag.com/article.asp?ID=1826. Francisco d’Anconia said, in part, "To trade by means of money is the code of the men of good will. Money rests on the axiom that every man is the owner of his mind and his effort. Money allows no power to prescribe the value of your effort except the voluntary choice of the man who is willing to trade you his effort in return. Money permits you to obtain for your goods and your labor that which they are worth to the men who buy them, but no more. Money permits no deals except those to mutual benefit by the unforced judgment of the traders."

 

15. World Trade Organization, World Trade Report , 2005, p. 6, Table 3, "World Merchandise Trade by Major Region," of Chapter 1, "Recent and Selected Medium-Term Developments" at http://www.wto.org/english/res_e/booksp_e/anrep_e/world_trade_report05_e.pdf

 

16. "Total GDP," 15 July 2005, World Bank Data and Statistics, at http://siteresources.worldbank.org/DATASTATISTICS/Resources/GDP.pdf

 

17. Dominick Salvatore, "The Euro-Dollar Exchange Rate Defies Prediction," Journal of Policy Modeling , June 2005, pp. 455-64, at http://www.sciencedirect.com/science/article/B6V82-4G5YSNX-2/2/8bd46e0652074df47caa9c04052a1e2d

18. During my research for this book, I found many such puzzles and may have discovered a new one which can be called the "currency pair sum puzzle." However, as with most ideas, it’s likely that someone has already identified this puzzle and solved it, or deemed it not a puzzle at all. I wondered about the sum of the two currency values in a traded pair, e.g., the euro/US dollar on 4 January 1999 of .8422/1.1874 summing to be 2.0296, and the significance of the changes in that sum over time. Looking at the daily sum of those pairs in 1999, the highest value for the sum occurred that first day of trading of the euro and it was also the high for the year for the euro (low for the US dollar). The sum never dropped below 2.0000, which point was reached on the same day as the euro low for the year on 3 December at $.9984, and on other days as well. On 30 December 2004, when the euro hit a high of $1.35, the sum was 2.0924.

To what extent should this sum be a "constant sum game," analogous to zero sum games? Readers who have comments on this puzzle, please EMAIL them to me, Morrison Bonpasse. Better yet, and consistent with the general request in this book to economists, please devote whatever energy you might spend on the above and idly contemplated "puzzle" to the far more important issues of the Single Global Currency.

 

19. Sarah Perry, Director of Visa’s Strategic Investment Program, in Efinance Insider , Issue 3, 17 April 2001. The Single Global Currency Association followed up with a 5 August 2005 email to Ms. Perry about the mutual interest in a Single Global Currency.

 

20. Foreign Exchange Committee of the Federal Reserve Bank of New York, Annual Report , 2005, for October 2004 at http://www.newyorkfed.org/FXC/annualreports/fxcar04.pdf

 

21. Mark Snyder, "New Opportunities and Risks in Foreign Exchange: The Role of the Foreign Exchange Committee," speech presented at the Profit & Loss Forex Network Conference, 20 September 2005, Chicago, at

http://www.newyorkfed.org/fxc/2005/fxc051117.pdf .

 

22. The Foreign Exchange Joint Standing Committee, "Results of the Semi-Annual FX Turnover Survey in October 2005," 23 January 2006, at

http://www.bankofengland.co.uk/markets/forex/fxjsc/fxturnresults050725.pdf .

 

23. Andrew Krieger, with Edward Claflin, The Money Bazaar , New York, NY: Times Books, 1992, at p. 21.

 

24. Foreign Exchange Committee of the Federal Reserve Bank of New York, FX Volume Survey, 2005, for April, 2005 at

http://www.newyorkfed.org/fxc/volumesurvey/explanatory_notes.html

 

25. "Derivative" as defined in Investopedia.com, "In finance,  a security whose price is dependent upon or derived from one or more underlying assets. The derivative itself is merely a contract between two or more parties. Its value is determined by the fluctuations of the underlying asset. The most common underlying assets include: stocks, bonds, commodities, currencies, interest rates and market indexes. Most derivatives are characterized by high leverage. 

  "Futures contracts, forward contracts, options and swaps are the most common types of derivatives. Because derivatives are just contracts, just about anything can be used as an underlying asset. There are even derivatives based on weather data, such as the amount of rain or the number of sunny days in a particular region.
  "Derivatives are generally used to hedge risk, but can also be used for speculative purposes. For example, a European investor purchasing shares of an American company on an American exchange (using American dollars to do so) would be exposed to exchange-rate risk while holding that stock. To hedge this risk, the investor could purchase currency futures to lock in a specified exchange rate for the future stock sale and currency conversion back into euros." At

http://www.investopedia.com/terms/d/derivative.asp

 

26. Alan V. Deardorff, "Deardorff’s Glossary of International Economics" at http://www-personal.umich.edu/~alandear/glossary/

 

27. The Associated Press, via Asahi.com, "Dollar Rises Past 120 Yen in Tokyo," 2 December 2005, at http://www.asahi.com/english/Herald-asahi/TKY200512020245.html

 

28. Martin Fackler, "Yen at 32-month Low as Japan’s Small Investors Look Abroad," The New York Times, 5 December 2005, p. C3.

 

29. Raul Lopez, "Currency Trading: Understanding the Basics of Currency Trading," at http://www.articlebiz.com/article/1626-1-currency-trading-understanding-the-basics-of-currency-trading/ and also at http://ezinearticles.com/?Currency-Trading:-Understanding-the-Basics-of-Currency-Trading&id;=100502

 

30. For a view of the requisite personality characteristics of foreign exchange traders, see "Perceptions of Successful Traders by Foreign Exchange Professionals," by Thomas Oberlechner, in Journal of Behavioral Finance, Vol 5, No. 1, pp. 23-31, at http://www.leaonline.com/doi/pdf/10.1207/s15427579jpfm0501_3?cookieSet=1

 

31. Andrew Krieger, with Edward Claflin, The Money Bazaar , New York, NY: Times Books, a division of Random House, 1992, at p. 105.

 

32. Forex Capital Markets, at www.fxcm.com

 

33. Forex.com, a subsidiary of Gain Capital Group, www.forex.com.

 

34. Jack Egan, "Investing: Check the Currency Risk. Then Multiply by 100.," The New York Times , 19 June 2005, p. BU 8, at http://select.nytimes.com/gst/abstract.html?res=F40A17F83F5F0C7A8DDDAF0894DD404482.

 

35. Forex Capital Markets, at www.fxcm.com.

 

36. Forex.com advertisement in Currency Trader , December 2005, p. 5.

 

37. Remington Ventures, Inc., represents that it sells software "that automatically renders neural network predictions from real time data. The system’s neural network input database is designed so that the neural net actually chooses the instrument to trade as well as the trade parameters…. It means this company is on the brink of changing the market itself, and today investors recognized it as they began scooping up the shares like crazy." Information on the web at http://diswww.mit.edu/menelaus/asa-exec/30684.

 

38. "Currency Managers Close Out 2005 in the Red," Currency Trader magazine, February 2006, p. 41.

 

39. "Transcript of the World Economic Outlook Press Conference," International Monetary Fund, 13 April 2006 at http://www.imf.org/external/np/tr/2005/tr050413.htm.

 

40. Fidelity Investments, at http://www.fidelity.com.hk/ourfunds/, at "Money Market Funds" and then "Currency Funds."

 

41. EverBank, at http://www.everbank.com/main.asp?affid=eb, with offices in St. Louis, Missouri and Islandia, New York.

 

42. A theme for this book is that economists should direct their research away from how the current multicurrency system works or doesn’t work, and toward the questions of how a Single Global Currency will benefit the world and how it will be implemented and how it will function. Thus, while I’m curious about the extent that foreign exchange trading is a zero sum game, it’s more important that economists focus their research in the direction of the 3-G world.

 

43. The "Treasury Amendment" was passed by Congress to ensure that the CFTC did not infringe upon the mandate of the Treasury Department, and was upheld by the US Supreme Court in Dunn v. Commodity Futures Trading Commission, 519 U.S. 465 (1997) at http://law.onecle.com/ussc/519/519us465.html. Subsequently, Congress passed the Commodities Futures Modernization Act of 2000, at http://www.cftc.gov/opa/press00/opa4479-00.htm

 

44. William Nissen, "The Long and Tangled History of the CFTC’s Jurisdiction in Foreign Exchange," in the Futures Industry magazine at the Futures Industry Association website at http://www.futuresindustry.org/fimagazi-1929.asp?a=962.

 

45. "Guidelines for Foreign Exchange Trading Activities," The Foreign Exchange Committee of the Federal Reserve Bank of New York. July 2004. at http://www.newyorkfed.org/fxc/2004/fxc040713b.pdf

 

46. Mark Snyder, "New Opportunities and Risks in Foreign Exchange: The Role of the Foreign Exchange Committee," speech presented at the Profit & Loss Forex Network Conference, 20 September 2005, Chicago, at

http://www.newyorkfed.org/fxc/2005/fxc051117.pdf. He also said "I might also mention that I cannot see a day when a nation’s central bank would cede its sovereign authority over the currency component of its monetary policy to any worldwide currency regulatory authority."

 

47. Jonathan Fuerbringer and William K. Rashbaum, "Currency Fraud Ran Deep, Officials Say," The New York Times , 20 November, 2003, page C1.

 

48. Sharon Burke and edited by Klaus Volpert, "Currency Exchange Trading and Rogue Trader John Rusnak," Villanova University, 2004, at http://www.publications.villanova.edu/Concept/2004/John_Rusnak.pdf

 

49. See the 31 January 2005 address to the Bank’s stockholders by the new Chairman, Graeme Kraehe at http://www.nabgroup.com/vgnmedia/downld/AGM_Script_310105.pdf

 

50. "Dismissed Salesman Faces Fraud Charge," The New York Times , from Reuters, 7 February 2006, p. C7. See Reuters article at http://today.reuters.com/investing/financeArticle.aspx?type=fundsNews2&storyID;=URI:urn:newsml:reuters.com:20060206:MTFH11506_2006-02-06_19-03-20_N06275728:1

 

51. Kit Dawnay, "A history of sterling," the online Telegraph at http://portal.telegraph.co.uk/news/main.jhtml?xml=/news/campaigns/eunion/cesterling.xml

 

52. Forbes magazine’s list of the "World’s Richest People," at http://www.forbes.com/static/bill2005/LIRC0R3.html?passListId=10&passYear;=2005&passListType;=Person&uniqueId;=C0R3&datatype;=Person

 

53. Warren Buffett subsequently explained his currency speculation in his 26 October 2003 Fortune magazine article, "Why I’m Not Buying the US dollar" at http://www.pbs.org/wsw/news/fortunearticle_20031026_03.html

54. "Berkshire Hathaway profit plunges 48 percent," msnbc.com at

http://www.msnbc.msn.com/id/9928100/print/1/displaymode/1098

 

55. Bill Bonner and Addison Wiggin observed in Empire of Debt that Warren Buffet began purchasing euros when the price was $.86. Hoboken, NJ: John Wiley & Sons, 2006, p. 296.

 

56. 2003 Annual Report , Berkshire Hathaway Inc., p. 21, at http://www.berkshirehathaway.com/2003ar/2003ar.pdf

 

57. James Hertling and Simon Clark, "Microsoft’s Gates, World’s Richest Man, Bets Against the Dollar," Bloomberg.com, 29 January 2005, at http://quote.bloomberg.com/apps/news?pid=10000006&sid;=aAvDTJpsO1Nk&refer;=home.

 

58. Kenneth Raisler, "Giving Customers Trading Advice: Implications of the de Kwiatkowski Decision," in the Futures Industry Magazine  , "Outlook 03" issue, January 2003, at the Futures Industry Association website at http://www.futuresindustry.org/fimagazi-1929.asp?v=p&iss;=150&a;=998

 

59. Mario Cerrato, Neil Kellard, and Nicholas Sarantis, "The Purchasing Power Parity Persistence Paradigm: Evidence from Black Currency Markets," November, 2004, Money Macro and Finance (MMF) Research Group Conference 2005, at http://repec.org/mmfc05/paper34.pdf.

 

60. Willem Buiter, "Optimal Currency Areas: Why Does the Exchange Rate Matter?" given at the Royal College of Physicians, Edinburgh, on 26 October 1999, at http://www.nber.org/~wbuiter/scotland.pdf p. 2.

 

61. Every currency in the world is identified by a three-character code, assigned by the ISO, International Standards Organization, according to its 4217 standard. Usually the first two characters of the code represent the country and the third denominates the currency. For a list see http://www.xe.com/iso4217.htm.

 

62. Pietra Rivoli, The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power and Politics of World Trade. Hoboken, NJ: John Wiley & Sons, 2005. For the transcript of a panel discussion with Prof. Rivoli at the IMF on 19 October 2005, go to http://www.imf.org/external/np/tr/2005/tr051019.htm

 

63. One aspect of the Tanzanian foreign-exchange issue is that it’s illegal to take Tanzanian currency out of the country. Many countries have such prohibitions which are intended to keep a close watch on the money supply so that their balance of payments is not rendered out of balance. For all countries except the United States, an imbalance in the balance of payments has serious consequences for the value of their money. In the US, when transporting or receiving more than $10,000 in cash or other monetary instruments, a CF-4790 form must be filed, but there are no restrictions of such flows nor of other capital flows. See http://www.cbp.gov/linkhandler/cgov/toolbox/publications/travel/currency_reporting.ctt/currency_reporting.doc

 

64. See the American Express online foreign exchange utility at https://www68.americanexpress.com/tcps/USEng/TCOServlet?request_type=orderProduct&promotion;=AMEX&program;=TC00000201&selleracctnbr;=2539481999I and utility for Oanda.com at http://www.oanda.com/products/fxdelivery/and Wells Fargo at https://www.foreignexchangeservices.com/cfx .

 

65. The Bank of Canada, the Canadian central bank, has a "10-year Currency Converter" utility which can be used to determine exchange rates for a specific date, or over a period of time during the past ten years, at http://www.bankofcanada.ca/en/rates/exchform.html. The reported rates can be pre-selected as the "nominal" or Interbank rates at noon for the selected day or days, or rates four percent higher, as the bank states that transaction charges by financial institutions to their customers for currency conversions are typically at that rate.

 

66. Wells Fargo, San Francisco, California, at

https://www.foreignexchangeservices.com/cfx/faqs.

 

67. Frederick W. Stakelbeck, Jr., "Foreign Currency Conversion Fees and the Credit Card Industry," in SRC Insights , Federal Reserve Bank of Philadelphia, Third Quarter 2005, at http://www.philadelphiafed.org/src/srcinsights/srcinsights/q3si4_05.html. See also, David A. Kelly, "Overseas the Shock of the Surcharge," The NewYork Times , 19 February 2006, p. TR 6, at http://travel2.nytimes.com/2006/02/19/travel/19prac.html

 

68. PayPal, "Help Center–Making Payments–Multiple Currencies," at http://www.paypal.com/cgi-bin/webscr?cmd=_help-ext&eloc;=0&loc;=1117&source;_p.=_home&flow;=  and "How does PayPal determine the foreign exchange rate for currency conversions?" at http://www.paypal.com/cgi-bin/webscr?cmd=_help-ext&eloc;=1121&loc;=1117&unique;_id=62093&source;_p.=_home&flow; =

 

69. Michael Emerson, Daniel Gros, Alexander Italiener, Jean Pisani-Ferry, and Horst Reichenbach, One Market, One Money-An Evaluation of the Potential Benefits and Costs of Forming an Economic and Monetary Union . Oxford, UK: Oxford University Press, 1992, pp. 65-66.

 

70. Senator Dirksen’s quotes and aphorisms were famous. The reference here is to: "A billion here, a billion there, and pretty soon you’re talking about real money." The Dirksen Congressional Center in Illinois has an entire page about the quote on its website, and notes that Senator Dirksen may never actually have made the quoted statement. At bottom, the Center noted, "Update, May 25, 2004. A gentleman who called The Center with a reference question relayed that he sat by Dirksen on a flight once and asked him about the famous quote. Dirksen replied, ‘Oh, I never said that. A newspaper fella misquoted me once, and I thought it sounded so good that I never bothered to deny it.’ " At http://www.dirksencenter.org/print_emd_billionhere.htm

 

71. Jose de Luna Martinez, "Workers’ Remittances to Developing Countries: A Survey with Central Banks on Selected Public Policy Issues," World Bank Policy Working Paper 3638, June 2005, at http://www-wds.worldbank.org/servlet/WDS_IBank_Servlet?pcont=details&eid;=000012009_20050608121914

 

72. See website of Travelex Worldwide Money, "The World’s Foreign

Exchange Company," at http://www.travelex.com/.

 

73. Katya Zapletnyuk, "Safety Margin-Foreign exchange leader Travelex hits the market as provider of currency risk management," The Prague Post , 18 January 2006, at http://www.praguepost.com/P03/2006/Art/0119/busi1.php

74. Tom Barkley, "Currency Trading: Geography Plays Role in Dollar Story, Currency’s Fall Helped US Investors Abroad, Hurt Foreigners Here," The Wall Street Journal , 9 January 2004.

 

75. "Fund Guide, International Investing," Fidelity Investments, Boston, Massachusetts, at http://personal.fidelity.com/products/funds/?refhp=pr

 

76. Reuters, 1999 Annual Report , Section 7 "Treasury Management," at

http://about.reuters.com/ar1999/frandstat/oandfr/treasman.htm

 

77. Jathon Sapsford and Northiko Shirouzu, "Japan’s Rate Boost Would Come With Risks," The Wall Street Journal , 1 March 2006, p. 1. The article cited an estimate by Kurt Sanger that a one yen drop in value compared to the dollar, such as from 110 to 111, would result in quarterly profit gains of $100 million and $260 million for Nissan and Toyota, respectively.

 

78. Honda Motor Co., "Risk Factors", 2004 Annual Report , at http://www.world.honda.com/investors/annualreport/2004/10.html

 

79. "Strong Franc Helps Reduce Nestle’s Profit," The New York Times , 21 August 2003, p. W1.

 

80. "Loss is Expected for First Half on Foreign Exchange Setback," The Wall Street Journal , 6 October 2003, p. B3.

 

81. "Company News; Avon Says It Will Meet or Beat Analysts’ Expectations. The New York Times , 27 June 2002.

 

82. Mark Hulbert, "The Dollar May Tumble, but It’s OK to Shrug," The New York Times, 12 March 2006, at p. BU6.

 

83. Gregory W. Brown and Donald H. Chew, Editors, "Table of Contents," Corporate Risk-Strategies and Management . London: 1999, Risk Books, at http://db.riskwaters.com/public/showP..html?p.=book_p.&tempP.Name;=154028

 

84. Peter Rosenstreich, FOREX Revolution-An Insider’s Guide to the Real World of Foreign Exchange Trading . Upper Saddle River, NJ: Prentice-Hall, 2005, p. 110. Interview with Joachim Herr at pp. 109-114.

 

85. Peter Rosenstreich, ibid., p. 114. Interview with Joachim Herr at pp. 109-14.

 

86. Richard Cooper, "Toward A Common Currency?" June 2000, pp. 22-23. Presented at the conference on the Future of Monetary Policy and Banking, organized by the IMF and the World Bank, at http://www.worldbank.org/research/interest/confs/upcoming/papersjuly11/cooper.pdf.

 

87. Johannes Kaiser and Sebastian Kube, "Currency Speculation Behaviour of Industrial Firms: Evidence from a Two-Country Laboratory Experiment," 9 December 2005, at http://econwpa.wustl.edu/eps/exp/papers/0511/0511005.pdf.

 

88. Michael Emerson, and others, op. cit., p. 64.

 

89. Peter Rosenstreich, op. cit., p. 115. Interview with Steve Nutland, Director of Bank of America, North American spot and emerging markets trading, at pp. 114-23.

 

90. "Financial Review: Statement and Notes: Note 1, Summary of Significant Accounting Principles," 2004 Annual Report , Bank of America, at http://www.bankofamerica.com/annualreport/2004/backmatter/cfsn/cfsn_note1.cfm

 

91. 2005 Annual Report , Scotiabank, Toronto, available at http://www.scotiabank.com/cda/content/0,1608,CID7148_LIDen,00.html

 

92. CAD is the three-letter ISO 4217 code for the Canadian dollar. Ironically, the symbol for the Canadian dollar, $, is exactly the same as for the US dollar, which leads to some costly confusion. There is a movement in Canada to adopt a uniquely Canadian symbol, perhaps similar to the € for the euro but with only one horizontal line. See i.am.canadian at http://i.am.ca/exampl.html .

 

93. 2005 Annual Report , Scotiabank, Toronto, op. cit., p. 65.

 

94. Harri Ramcharran, "Sensitivity of Foreign Exchange Trading Income to Exchange Rate Changes: A Study of Large US Banks," Multinational Business Review , Spring 2000, at http://www.findarticles.com/p/articles/mi_qa3674/is_20004/ai_n8896805

 

95. "Foreign Exchange Derivatives," at the website of BB&T Corporation, a North Carolina, USA, bank holding company, at http://www.bbandt.com/business/products/foreignexchangederivatives/index.html

 

96. "Passing the Buck," Forbes.com, at http://www.forbes.com/2006/02/11/cx_dal_money06_0214moneyfactslide_21.html?thisSpeed=6000

 

97. Carlos Torres, "U.S. 4th-Qtr Current Account Deficit Rises to Record (Update1), Bloomberg.com, 14 March 2006, at http://quote.bloomberg.com/apps/news?pid=10000103&sid;=a6vl4z1AsVUE&refer;=news_index. See also, "Of Dollars, Deficits and Destiny," Editorial in The New York Times , 26 November 2005, p. 14.

 

98. Floyd Norris, "More Than Ever, the US Spends and the Foreigners Lend," The New York Times , p. B4, 1 October 2005.

 

99. T. K. Jayaraman, in his article, "A Single Currency for the Pacific Island Countries: a Stepwise Approach," in Asia Pacific Development Journal , June 2004, and at http://www.unescap.org/pdd/publications/apdj_11_1/jayaraman.pdf cited the 1990 European Commission report on the cost of currency transactions. He wrote, "The European Commission estimated the average currency transaction cost ranging from 0.3 per cent to 0.35 per cent of the value of the underlying transaction." At p. 107.

Charles Wyplosz wrote in 1997, "The European Commission report, (1990, p. 65) had publicized enormous costs for the retail market between 200 and 300 basis points." (i.e., .2-.3 percent, p. 9) Jayaraman also cited the 1999 article by M. Anthony and A. Hughes-Hallett, "Is the case for economic and monetary union in the Caribbean realistic?" which used the 0.3 per cent estimate. That paper was presented at the Annual Caribbean Centre for Monetary Studies Conference in Barbados, and sponsored by the Central Bank of Barbados. Also, it was published in World Economics , January 2000.

 

100. Michael Emerson, and others, op. cit., p. 25.

 

101. John Murray, "Why Canada Needs a Flexible Exchange Rate," July, 1999, for a conference at Western Washington University, 30 April 1999, at http://epe.lac-bac.gc.ca/100/200/301/bankofcanada/working_papers-ef/1999/99-12/wp99-12.pdf .

 

102. Michael Emerson, and others, op. cit., p. 64.

 

103. "Box 5: The Cost of multicurrency management – A remaining barrier to trade and investment," EUROPEAN ECONOMY, a semi-annual publication of the European Commission, No. 63, 1997, at p. 85, at http://europa.eu.int/comm/economy_finance/publications/european_economy/1996/eers4_1996en.pdf

 

104. Hugo R. Mendizabal, "Monetary Union and the Transaction Cost Savings of a Single Currency," Review of International Economics , Vol. 10, Issue 2, 2002, pp. 263-77, at http://www.blackwell-synergy.com/doi/abs/10.1111/1467-9396.00331

 

105. A biennial budget for $3.79 billion was approved by the General Assembly on 26 December 2005, for the years 2006-07, at http://www.un.org/radio/story.asp?NewsID=3626.

 

106. "About Global Poverty and Microcredit," Public Broadcasting Service, at http://www.pbs.org/toourcredit/facts_one.htm.

 

107. David R. Francis, "Population Growth Slows, and Elderly Ranks Rise," 28 October 1998, Christian Science Monitor, at http://csmonitor.com/cgi-bin/durableRedirect.pl?/durable/1998/10/28/f-p6s1.shtml

 

108. As countries have been the primary issuers of currency, "currency risk" is also called "sovereign risk." For a review of the impact of sovereign risk, see Bernardin Akitoby, "Pricing of Sovereign Risk in Emerging Markets," March 2006, IMF Research , pp 1, 4-5, at http://www.imf.org/External/Pubs/FT/irb/2006/eng/01/index.pdf.

 

109. "Global Financial Stability Report," International Monetary Fund, Table 3 in Statistical Appendix, at p. 171, at http://www.imf.org/External/Pubs/FT/GFSR/2005/02/pdf/statappx.pdf

110. Robert E. Litan and Benn Steil, Financial Statecraft . London and New Haven, CT: Yale University Press, 2006, p. 84, citing references.

 

111. Federico Marongiu, "Towards a New Set of Leading Indicators of Currency Crisis for Developing Countries: An Application to Argentina," p. 3, draft of March 2005, at http://econwpa.wustl.edu/eps/pe/papers/0512/0512011.pdf

 

112. Michael Hutchison and Ilan Neuberger, "Output Costs of Currency and Balance of Payments Crises in Emerging Markets, September 2001, at http://econ.ucsc.edu/faculty/hutch/output_costs.pdf.

 

113. Pattama Shimpalee and Janice Boucher Breuer, "Currency Crises and Institutions," Journal of International Money and Finance , February 2006, pp. 125-45, athttp://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V9S-4HRDXTS-2&_coverDate=02 percent2F28 percent2F2006&_alid=356854987&_rdoc=1&_fmt=&_orig=search&_qd=1&_cdi=5906&_sort=d&view;=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5;=651aabb4e9f607033f925e64c4f1b423 .

 

114. For this breakdown of the types of financial crises, see Jan Jacobs, Gerard Kuper, and Lestano, "Currency Crises in Asia: A Multivariate Logit Approach," Working Paper, July 2005, p. 2, Centre for Economic Research (CCS), University of Gronningen, at http://ccso.eldoc.ub.rug.nl/FILES/root/2005/200506/200506.pdf.

 

115. Peter G. Peterson, "Riding for a Fall," Foreign Affairs , September/October 2004, at http://www.foreignaffairs.org/20040901faessay83510/peter-g-peterson/riding-for-a-fall.html?mode=print

 

116. Interview with Larry Summers, President, Harvard University, USA, 23 January 2006, at http://www.weforum.org/site/homepublic.nsf/Content/Interview+with+Lawrence+Summers,+President,+Harvard+University,+USA.

 

Chapter 2. Coping With The Multicurrency Foreign Exchange System

1. In 2005, I purchased a package of 10 Navel oranges for $3.99 weighing 1.81 kilograms, and a package of 13 McIntosh apples weighing 1.36 kilograms for $2.59. The price per orange was $.40 and the price per apple was $.20, thus enabling an easy 1:2 trade. Note that this example is distorted because the parties already knew the currency price of each fruit. Without such pre-barter pricing or trading knowledge, the outcome of each barter trade for apples and oranges would have been far less predictable.

 

2. Robert Mundell, "The birth of coinage", at

http://www.columbia.edu/cu/economics/discpapr/DP0102-08.pdf

 

3. Paul Einzig, The History of Foreign Exchange . London, UK: MacMillan/St. Martin’s Press, 1962.

 

4. The Bible , Book of Mark, Chapter 11:15-17 Revised Standard Version.

See also, Book of Matthew 21:12; Book of John 2:15.

 

5. See "Member States," United Nations website at http://www.un.org/members/index.html.

 

6. Carol M. Highsmith and Ted Landhair, The Mount Washington: A Century of Grandeur . Washington, D.C.: Archetype Press, 2002, p. 93.

 

7. A troy ounce equals 1.097 ounces, or avoirdupois ounces. For the conversion of troy ounces and other measures, see utility, "Online Metrics Conversion–US Standard & Metric Unit Converter" by Science Made Simple, Inc., at http://www.sciencemadesimple.net/conversions.html.

 

8. Andrew Krieger, with Edward Claflin, The Money Bazaar . New York, NY: Times Books, 1992, at p. 122.

 

9. Andrew Krieger, ibid., at p. 122.

 

10. David Dodge, "Monetary Policy and the Exchange Rate in Canada," remarks by the governor of the Bank of Canada to the Canada-China Business Council, Beijing, 2 June 2005, at http://www.bankofcanada.ca/en/speeches/2005/sp05-8.html, and Gordon Thiessen, previous governor of the Bank of Canada, in speech before the Chamber of Commerce of Montreal, "Why a Floating Exchange Rate Regime Makes Sense for Canada," 4 December 2000, at http://www.bankofcanada.ca/en/speeches/2000/sp00-7.html

11. Statement of the G6 Finance Ministers and Central Bank Governors (Louvre Accord), 22 February 1987, from the University of Toronto Library at http://www.g8.utoronto.ca/finance/fm870222.htm.

 

12. International Monetary Fund, "Articles of Agreement, Article 1 – Purposes," as "Adopted at the United Nations Monetary and Financial Conference, Bretton Woods, New Hampshire, July 22, 1944. Entered into force December 27, 1945. Amended effective July 28, 1969, by the modifications approved by the Board of Governors in Resolution No. 23-5, adopted May 31, 1968; amended effective April 1, 1978, by the modifications approved by the Board of Governors in Resolution No. 31-4, adopted April 30, 1976; and amended effective November 11, 1992, by the modifications approved by the Board of Governors in Resolution No. 45-3, adopted June 28, 1990," at http://www.imf.org/external/pubs/ft/aa/aa01.htm

 

13. The term "exchange rates" is used throughout this book to mean the published values of one currency in terms of another, also called the "nominal exchange rate." Economists also use the terms "real exchange rate," which is a nominal exchange rate, adjusted for the price level/inflation for each country in the currency pair. See Alan V. Deardorff’s "Glossary of International Economics" at http://www-personal.umich.edu/~alandear/glossary/Also, Richard Cooper writes that the movements of nominal exchange rates and real exchange rates are highly correlated in the short and medium run, except where very high inflation is involved for either currency. In "Toward A Common Currency?" June 2000, presented at the conference on the Future of Monetary Policy and Banking, organized by the IMF and the World Bank, at http://www.worldbank.org/research/interest/confs/upcoming/papersjuly11/cooper.pdf.

 

14. John Maynard Keynes, "Europe after the Treaty," The Economic Consequences of the Peace (1919), Chapter 6, at http://socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll3/keynes/peace.htm

 

15. Edmund Andrews, "Fed Gives Mixed Sign On Rates–After 13th Raise, Hints of More," The New York Times , p. C1, 14 December 2005, at http://www.nytimes.com/2005/12/14/business/14fed.html?adxnnl=1&adxnnlx;=1134565380-D3vhdn3QUKhu1M64MsAkkw.

 

16. "US Economy: Trade Deficit Widened to a Record (Update3)," Bloomberg.com, 14 December 2005, at http://quote.bloomberg.com/apps/news?pid=10000006&sid;=a8uT5EhaQ2SU&refer;=home

 

17. Floyd Norris "Off the Charts–Budget Deficit Getting You Down? Just Take a Look at the Trade Gap," The New York Times , p. B3.

 

18. Mark Landler, "In Guarded Tones, European Bank Raises Rates for First Time in 5 Years," The New York Times , p. C3, 3 December 2005, at http://select.nytimes.com/gst/abstract.html?res=FB0E1FF63E550C718CDDAB0994DD404482.

 

19. Email from Basil Moore to author, 16 February 2006.

 

20. Richard Cooper, "Toward A Common Currency?" June 2000, p. 1, presented at the conference on the Future of Monetary Policy and Banking, organized by the IMF and the World Bank, at http://www.worldbank.org/research/interest/confs/upcoming/papersjuly11/cooper.pdf.

 

21. See Yin-Wong Cheung, Menzie Chinn, and Antonio Garcia Pascual, "Empirical Exchange Rate Models of the Nineties: Are Any Fit to Survive?" IMF Working Paper WP/04/73, April 2004, at http://www.imf.org/external/pubs/ft/wp/2004/wp0473.pdf; and Selim Elekdag and Ivan Tchakarov, "Balance Sheets, Exchange Rate Policy, and Welfare," IMF working paper, WP 04/63, April 2004, at http://www.imf.org/external/pubs/ft/wp/2004/wp0463.pdf; and Thomas Willett, "The OCA Approach to Exchange Rate Regimes: A Perspective on Recent Developments," Claremont Colleges, Working paper 2001-04, April, 1999, at http://econ.claremontmckenna.edu/papers/2001-04.pdf. For an example of application of theory to the exchange rate regime choice for Kazakhstan and Pakistan, see Aasim Husain, "To Peg or Not to Peg: A Template for Assessing the Nobler," IMF Working Paper 06/54, February 2006, at http://www.imf.org/external/pubs/ft/wp/2006/wp0654.pdf.

 

22. Abdelali Jbili and Vigtali Kramarenko, "Box 1. Classification of Exchange Regimes of the IMF Membership as of April 30, 2003," Choosing Exchange Rate Regimes in the Middle East and North Africa . Washington, D.C.: International Monetary Fund, 2003. pp. 4-5.

 

23. The words "yuan" and "renminbi" are often used interchangeably, and sometimes together, to denote the Chinese currency. The ISO 4217 code for the Chinese currency is CNY, with "CN" for China and "Y" for yuan, and the currency name at that site is "Yuan Renminbi," at http://www.iso.org/iso/en/prods-services/popstds/currencycodeslist.html. "Renminbi" is translated as "the Peoples’ Currency," at http://www.chinatoday.com/fin/mon/ As "yuan" is the more frequently used term, it’s used here exclusively. For a discussion on Chinese translation, from English and Japanese, including the terms for Chinese money, see http://www.cjvlang.com/Spicks/interpreting.html.

 

24. For excellent summaries of aspects of foreign exchange, see the explanations in Wikipedia, e.g., for "foreign exchange market" at http://en.wikipedia.org/wiki/Foreign_exchange_market.

 

25. Christina Soon, "Yuan Has Biggest Gain Since Revaluation After Wen’s Comments," Bloomberg.com, 15 March 2006, at http://www.bloomberg.com/apps/news?pid=71000001&refer;=home&sid;=aXWNQNw6wE0I . See also Bank of Canada online currency conversion utility, at http://www.bankofcanada.ca/en/rates/exchform.html

 

26. Alan V. Deardorff, "Deardorff’s Glossary of International Economics," at http://www-personal.umich.edu/~alandear/glossary/.

 

27. Chong Y. Kim, "The System of Currency Board: The Experience of Argentina," working paper WP2003-006, Le Moyne College, Syracuse, New York, at http://www.lemoyne.edu/library/mgmt_wp/wp2003-006.pdf .

 

28. Paul Krugman, editor, Currency Crises . Chicago, IL: National Bureau of Economic Research, by University of Chicago Press, 2000. Promotional paragraph, at http://www.press.uchicago.edu/cgi-bin/hfs.cgi/00/14111.ctl.

 

29. In 2000, it was estimated that 50-70 percent, or $250-350 billion, of the existing $500 billion in United States currency was held outside the United States. "Text: Report on Foreign Use, Counterfeiting of US Currency," Federation of American Scientists website at http://www.fas.org/irp/news/2000/02/000228-bogus-usia1.htm. See also "Passing the Buck," Forbes.com, "As of April 2004, nearly $700 billion in U.S. dollars was in circulation. Somewhere from one-half to two-thirds of it, mostly in $100 bills, was held overseas." At

http://www.forbes.com/2006/02/11/cx_dal_money06_0214moneyfactslide_21.html?thisSpeed=6000

 

30. For many years, foreigners have been purchasing more assets in the United States than its citizens have purchased abroad. In November 2005, foreigners purchased $103.2 billion of domestic securities of the United States. Of that amount, $5.9 billion were purchased by governmental institutions, and $97.3 billion by private investors. US residents purchased a net $14.1 billion in foreign securities. United States Treasury, at http://www.treas.gov/press/releases/js3079.htm.

 

31. William Clark, "Petrodollar Warfare: Dollars, Euros and the Upcoming Iranian Oil Bourse," Energy Bulletin , 2 August 2005, at http://www.energybulletin.net/7707.html.

 

32. Clark Kee, "Petroeuro Futures," The Dubya Report , 25 October 2003, at http://www.thedubyareport.com/econiraq.html.

 

33. William R. Clark, "Petrodollar Warfare: Dollars, Euros and the Upcoming Iranian Oil Bourse," Energy Bulletin , 9 August 2005, at http://www.energybulletin.net/7707.html; Krassimir Petrov, "The Proposed Iranian Oil Bourse," Energy Bulletin , 18 January 2006, at http://www.energybulletin.net/12125.html. See also Toni Straka, "Killing the Dollar in Iran," 26 August 2005, Asia Times , online at http://www.atimes.com/atimes/Global_Economy/GH26Dj01.html . See also Gwynne Dyer, "Iran, Oil and Euros: The War Scenario," Arab News , 21 February 2006, at http://www.arabnews.com/?p.=7§ion;=0&article;=78138&d;=21&m;=2&y;=2006.

 

34. Mohsin S. Khan, "What is Happening to the Petrodollars?" 27 November 2005, International Monetary Fund, at http://www.imf.org/external/np/vc/2005/112705.htm.

 

35. United States Dept. of Energy, "Non-OPEC Fact Sheet–Top World Oil Consumers, 2004," at http://www.eia.doe.gov/emeu/cabs/topworldtables3_4.html

36. Andrew Krieger, op. cit., pp. 3-5.

 

37. Andrew Krieger, op. cit., pp. 213-14.

 

38. "Central Banks Shun the Dollar," Business Week Online, 23 February 2005, at http://www.businessweek.com/bwdaily/dnflash/feb2005/nf20050223_0503_db053.htm.

 

39. Richard McGregor and Andrew Yeh, "China Plays Down Idea of Selling Off Dollars," Financial Times , 11 January 2006, at http://news.ft.com/cms/s/37fee9b4-8231-11da-aea0-0000779e2340.html.

 

40. Gunther Schnabl, "The Russian Currency Basket, The Rising Role of the Euro for Russia’s Exchange Rate Policies," Econ Working Paper 0512, 12 December 2005, at http://econwpa.wustl.edu/eps/if/papers/0512/0512005.pdf.

 

41. Diego Valderrama, "FRBSF Economic Letter: What If Foreign Governments Diversified Their Reserves?" Federal Reserve Bank of San Francisco, 29 July 2005, at http://www.frbsf.org/publications/economics/letter/2005/el2005-17.html.

 

42. International Monetary Fund, "Annual Report of the Executive Board for the Financial Year Ended 30 April 2005," Appendix, Table 1, p. 108,at http://www.imf.org/external/pubs/ft/ar/2005/eng/index.htm.

 

43. Keith Bradsher, "Speculators Turn Away from China, Making Revaluation Less Pressing," The New York Times , 5 January 2006, p. C3.

 

44. David Lague, "China, a Trade Superstar, Accumulates Foreign Currency (and Anxiety)," The New York Times , 17 January 2006, p. C4.

 

45. Marion Williams, "Foreign Exchange Reserves: How much is enough?" speech delivered at the Central Bank of the Bahamas, 2 November 2005, at http://www.centralbank.org.bb/Publications/Adlith_Brown_Lec.pdf, and at http://www.bis.org/review/r060123c.pdf.

 

46. Robert A. Mundell, "Gold," on his website at http://www.robertmundell.net/Menu/Main.asp?Type=5&Cat;=10&ThemeName;=Gold.

 

47. International Monetary Fund, "Annual Report of the Executive Board for the Financial Year Ended April 30, 2005," Appendix, Table 1, p. 108, at http://www.imf.org/external/pubs/ft/ar/2005/eng/pdf/file7.pdf. For the current value of an SDR, see the IMF utility at http://www.imf.org/external/np/fin/rates/rms_sdrv.cfm. The SDR is composed of the sum of .632 of the value of a US dollar plus .410 of the value of a euro, 18.4 Japanese Yen and .0903 of a U.K. pound. On January 5, 2006, for example, an SDR was worth $1.44. And for the conversion of troy ounces into kilograms, see the utility, "Online Metrics Conversion–US Standard & Metric Unit Converter" by

Science Made Simple, Inc., at http://www.sciencemadesimple.net/conversions.html.

 

48. Stephen Metcalf, "Believing in Bullion" (subtitled: "Believing and Believing and Believing in Bullion–Currency Imbalances? Unsustainable Deficits? Impending Economic Collapse? For Some It’s the Golden Age."), The New York Times Magazine , 5 June 2005. p. 39, at http://select.nytimes.com/gst/abstract.html?res=F10D14FB345D0C768CDDAF0894DD404482.

 

49. "FXConverter–164 Currency Converter Results," at http://www.oanda.com/convert/classic.

 

50. Milton Friedman, Capitalism and Freedom . Chicago, IL: University of Chicago Press, 1962, p. 40.

 

51. John Schmid, "G-7 Drafts Gold-Sale Plan To Cut Poor Nations’ Debt," International Herald Tribune , 14 June 1999, as posted on website of Global Policy Forum, at http://www.globalpolicy.org/socecon/bwi-wto/dbtpkg99.htm. See also, for continued efforts to sell gold from reserves, Abid Aslam’s 2005 article, "World Leaders Agree Poor Countries Need Debt Relief, But Can’t Agree on Plan," from One World , 18 April 2005, at Global Policy Forum at http://www.globalpolicy.org/socecon/develop/debt/2005/0418worldleaders.htm.

 

52. International Monetary Fund, "A Fact Sheet, September 2005–Gold in the IMF," at http://www.imf.org/external/np/exr/facts/gold.htm.

 

53. Of the 191 members of the United Nations, the following seven are not members of the 184-member International Monetary Fund: Andorra, Anguilla, Cuba, Democratic Republic of North Korea, Liechtenstein, Monaco, and Nauru.

 

54. See www.goldmoney.com for a facility that keeps accounts as measured in grams of gold, and where customers can buy and sell gold and use it for payments to other customers.

 

55. Robert E. Litan and Benn Steil, Financial Statecraft . London and New Haven, CT: Yale University Press, 2006, p. 3, citing Richard Cronin’s, "Financial Crisis: An Analysis of US Foreign Policy Interests and Options," April 1998, Congressional Research Report , 98-74, report for the United States Congress, at http://countingcalifornia.cdlib.org/crs/ascii/98-74

 

56. Kavaljit Singh, Taming Global Financial Flows . New York, NY: Zed Books, 2000, p. 13. A lower estimate of $10-20 billion daily comes from Lionel Trilling, "Money in Crisis," at http://www.terratrc.org/PDF/Sup3-MoneyInCrisis.pdf.

 

57. Benn Steil, "The Developing world should abandon parochial currencies," Financial Times , 17 January 2006. Steil credits Martin Wolf and Jaddish Bhagwati for the coining of the phrase, "Achilles heel of globalisation," at https://registration.ft.com/registration/barrier?referer=http://news.ft.com/home/europe&location;=http percent3A//news.ft.com/cms/s/ef6ffc22-86bf-11da-8521-0000779e2340.html.

 

58. For a review of literature on capital controls, see Nicholas Magud and Carmen Reinhart, "Capital Controls: An Evaluation," National Bureau of Economic Research, Working Paper 11973, January, 2006, at http://papers.nber.org/papers/w11973.

 

59. Eric Schaling, " Capital Controls, Two-Tiered Exchange

Rate Systems and Exchange Rate Policy: The South African Experience,"

at http://greywww.kub.nl:2080/greyfiles/center/2005/doc/110.pdf.

 

60. "Treasury International Capital Data for September," at the United States Treasury website: http://www.treas.gov/press/releases/js3019.htm. At that website are all the forms and reporting requirments for financial institutions for the data that make up these reports.

 

61. Keith Bradsher, "Speculators Turn Away from China, Making Revaluation Less Pressing," The New York Times , 5 January 2006, p. C3.

 

62. Alan Greenspan, "International Imbalances," remarks before the Advancing Enterprise Conference, London, 2 December 2005, at

http://www.federalreserve.gov/boarddocs/speeches/2005/200512022/default.htm.

 

63. C. Fred Bergsten, "Rescuing the Doha Round," Foreign Affairs , WTO Special Edition., December 2005, at http://www.foreignaffairs.org/20051201faessay84702/c-fred-bergsten/rescuing-the-doha-round.html. Also, Edwin Truman, Policy Analysis in International Economics 77–A Strategy for IMF Reform ." Washington, D.C.: Institute for International Economics, 2006. See also, speech by Tim Geithner, President of the Federal Reserve Bank of New York, at the Financial Imbalances Conference in London, 23 January 2006, at http://www.bis.org/review/r060127a.pdf .

 

64. For the 1949 origin of Murphy’s Law, as attributed to the US military engineer, Major Edward A Murphy, Jr., who was working on rocket-sled experiments to measure "g forces", i.e., the force of gravity, see http://en.wikipedia.org/wiki/Murphy’s_law.

 

 

Chapter 3. Economists View the Pre-Euro Multicurrency System and its Exchange Rate Regimes

1. Basil Moore has made this point, too. He wrote, "Economists must think outside the box," in his article, "A Global Currency for a Global Economy," Journal of Post Keynesian Economics , Summer, 2004, p. 637, at http://www.metapress.com/(tx15nw45ef4npcqly5ldin2n)/app/home/contribution.asp?referrer=parent&backto;=issue,7,13;journal,6,13;linkingpublicationresults,1:109348,1"Thinking outside the box" is a phrase developed in the 1970s by management consultants and others to urge their clients to think of new solutions to old problems. The "box" consisted of three rows of three dots:   

  . . .

  . . .

  . . .

and the challenge was to connect all nine dots with no more than four straight lines, drawn continuously without lifting the pencil from the paper. The key to the solution is that the straight lines must extend outside the imagined four walls of the box. See the solution in "Etymologies and word origins" at http://www.wordorigins.org/wordoro.htm.

 

2. Social Science Research Network, using the JEL ( Journal of Economic Literature ) category of "F3-International Economics." Category F31 is "Foreign Exchange," with 1,308 matches compared to 576 for the next most frequent, "International Monetary Arrangements and Institutions," at http://papers.ssrn.com/sol3/displayjel.cfm.

 

3. "The Economist’s Big Mac Index: Fast Food and Strong Currencies,"

The Economist , London, 12 January 2006, at http://www.economist.com/markets/bigmac/index.cfm.

 

4. " The Economist’s Big Mac Index: Fast Food and Strong Currencies,"

The Economist, London, 9 June 2005, at http://www.economist.com/markets/bigmac/displayStory.cfm?story_id=4065603&no;_na_tran=1.

 

5. David Parsley and Shang-Jim Wei, �A Prism Into the PPP Puzzles: The Microfoundations of Big Mac Real Exchange Rates," December 2005 version available at http://www2.owen.vanderbilt.edu/david.parsley/research.htm

 

6. The Economist stated that it obtained the average price of $3.15 from four unnamed United States cities. However, together with friends and relatives, we contacted 15 McDonalds restaurants to obtain their prices for Big Macs. The average for the four large cities was $2.78 (and not counting the Chicago offer to purchase two for $3.00), and $2.55 for smaller cities. Not excluded were the sales taxes, which vary by locality. If those two averages had been obtained from restaurants in other countries, their Big Mac Purchasing Power Parities would have been

-11.7 percent and -19.0 percent, respectively. This example illustrates the difficulty in measuring representative prices for an average price even within a currency area.

 

7. Michael Funke and Jorg Rahn, "Just How Undervalued is the Chinese Renminbi?" The World Economy , Vol. 28, No. 4, pp. 465-89, April 2005, Oxford UK and Malden, MA: Blackwell Publishing. Also at http://gulliver.econ.uni-hamburg.de/IWWT/homep./qmwps/qm405.pdf. See also Steven Dunaway and Xiangming Li, "Estimating China’s ‘Equilibrium’ Real Exchange Rate," IMF Working Paper 05/202, October 2005, International Monetary Fund, at http://www.imf.org/external/pubs/ft/wp/2005/wp05202.pdf .

 

8. Eric Sylvers, "Ikea Index Indicates the Euro is Not a Price Equalizer Yet," The New York Times , 23 October 2003, page 1. See also, "Ikea-Index 2003," November 2003, athttp://willmann.bwl.uni-kiel.de/~gerald/econ429/ikea-index.pdf

 

9. See Currency conversion calculations at the Bank of Canada site at http://www.bankofcanada.ca/en/rates/exchform.html.

 

10. "Dollar Overvalued Substantially Against Yen, Modestly Against Euro," Institute for International Economics, May 1998, at http://www.iie.com/publications/newsreleases/newsrelease.cfm?id=42,

relying on the book by Rebecca Driver and Simon Wren-Lewis, Real Exchange Rates for the Year 2000, Policy Analyses in International Economics 54 . Washington, DC: May, 1998, Institute for International Economics.

 

11. "10-year Currency Converter," Bank of Canada, at http://www.bankofcanada.ca/en/rates/exchform.html .

 

12. "BIS Effective Exchange Rate Indices," Bank for International Settlements, 6 March 2006, at

http://www.bis.org/statistics/eer/index.htm

 

13. Ernesto Stein, Jorge Streb, and Piero Ghezzi, "Real Exchange Cycles Around Elections," Vol 17, Issue 3, Economics and Politics , p. 297, November 2005, at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=856728.

 

14. Christopher Ragan, "The Exchange Rate and Canadian Inflation Targeting," Bank of Canada, November 2005, at http://www.bankofcanada.ca/en/res/wp/2005/wp05-34.pdf.

 

15. Marcelo Sanchez, "The Link Between Interest Rates and Exchange Rates–Do Contractionary Depreciations Make a Difference?" European Central Bank, Working Paper Series, No. 548, November, 2005, at http://www.ecb.int/pub/pdf/scpwps/ecbwp548.pdf. See also, Menzie Chinn, "The (Partial) Rehabilitation of Interest Rate Parity in the Floating Rate Era: Longer Horizons, Alternative Expectations, and Emerging Markets," Journal of International Money and Finance , February 2006, pp. 7-21, at http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V9S-4HS3BKY-2&_coverDate=02 percent2F28 percent2F2006&_alid=356849919&_rdoc=1&_fmt=&_orig=search&_qd=1&_cdi=5906&_sort=d&view;=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5;=7de1fe563e1846b0ceb03e23861c4861.

 

16. Kathy Lien, "Interest Rate Shuffle," Currency Trader magazine. Chicago, IL: February 2006, pp. 20-24.

 

17. Ricardo Hausmann, Ugo Panizza, and Roberto Rigobon, "The Long-Run Volatility of the Real Exchange Rate," Journal of International Money and Finance , February 2006, pp. 93-124, at http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V9S-4J0NXXV-1&_coverDate=02 percent2F28 percent2F2006&_alid=356852073&_rdoc=1&_fmt=&_orig=search&_qd=1&_cdi=5906&_sort=d&view;=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5;=631778fff61b36513377a32caf6693c5.

 

18. Kathryn Dominguez and Freyan Panthaki, "What Defines ‘News’ in Foreign Exchange Markets?" National Bureau of Economic Research, Cambridge, MA: November 2005, at http://www.nber.org/papers/w11769.

 

19. Martin D. D. Evans and Richard K. Lyons, "Order Flow and Exchange Rate Dynamics," Journal of Political Economy , February 2002, pp. 170-80, at http://faculty.haas.berkeley.edu/lyons/pubabs.html.

 

20. Lijian Yang, "A Semiparametric GARCH Model for Foreign Exchange Volatility," Journal of Econometrics , February 2006, pp. 365-84, at http://www.sciencedirect.com/science/article/B6VC0-4G4N5YP-2/2/7443be991ae305bd426cdbe7312dc89c

 

21. Bala Ramasamy and Matthew C. H. Yeung, "The Causality Between Stock Returns and Exchange Rates: Revisited," June 2005, Australian Economic Papers, Issue 2, p. 162, at http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-8454.2005.00257.x.

 

22. Stephan Schulmeister, "The Interraction between Technical Currency Trading and Exchange Rate Fluctuations," December 2005, Austrian Institute for Economic Research, at http://econwpa.wustl.edu:8089/eps/fin/papers/0512/0512033.pdf

 

23. Ehan U. Choudhri and Mohsin S. Khan, "Real Exchange Rates

in Developing Countries: Are Balassa-Samuelson Effects Present?" 3 November 2005, IMF Staff Papers, Vol. 52, Number 3, at http://www.imf.org/External/Pubs/FT/staffp/2005/04/choudhri.htm.

 

24. Claudio Bravo-Ortega and Julian Di Giovanni, "Remoteness and Real Exchange Rate Volatility," IMF Working Paper No. WP/05/1, January 2005, at http://www.imf.org/external/pubs/ft/wp/2005/wp0501.pdf .

 

25. Ben Stein, "Everybody’s Business: Master of the Art of Taming Inflation," The New York Times , 1 January 2006, p. BU4.

 

26. Maurice Obstfeld and Kenneth Rogoff, "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?" Center for International and Development Economics Research, Berkeley, CA: 2000, p. 34, at http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1010&context;=iber/cider.

 

27. Maurice Obstfeld and Kenneth Rogoff, ibid., p. 35.

 

28. Lucio Sarno, "Viewpoint: Towards a Solution to the Puzzles in Exchange Rate Economics: Where do we stand?" August 2005, Canadian Journal of Economics , pp. 673-708, at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=772984.

 

29. Robert Mundell, "The case for a world currency," Journal of Policy Modeling , June 2005, pp. 465-75, at p. 470, at http://www.sciencedirect.com/science/article/B6V82-4G5BF09-1/2/0a981dfd39b6bb0ab8800e29fb10f7b1.

 

30. Robert Mundell, ibid., p. 470.

 

31. Raghuram Rajan, "Financial System Reform and Global Current Account Imbalances," remarks to the American Economic Association, 8 January 2006, at http://www.imf.org/external/np/speeches/2006/010806.htm.

 

32. Maurice Obstfeld and Kenneth Rogoff, "The Unsustainable US Current Account Position Revisited*," First draft 14 October 2004, and this draft 30 November 2005. The authors noted that "This chapter is a revised version of National Bureau of Economic Research Working Paper 10869, November 2004," at

http://www.economics.harvard.edu/faculty/rogoff/papers/Unsustainable_Nov_2005.pdf.

 

33. Paul Volcker, "An Economy on Thin Ice," Washington Post , 10 April 2005, p. B07, at http://www.washingtonpost.com/wp-dyn/articles/A38725-2005Apr8.html.

 

34. Institute for International Economics, "HOT TOPICS: US Current Account Deficit, The Issue," at http://www.iie.com/research/topics/hottopic.cfm?HotTopicID=9.

 

35. Richard Cooper, "Living with Global Imbalances: A Contrarian View," Policy Briefs, No. PB0-5-3, November 2005, Institute for International Economics, Washington, DC: p. 1, at http://www.iie.com/publications/pb/pb05-3.pdf .

 

36. Ben S. Bernanke, Sandridge Lecture, 10 March 2005, at http://www.federalreserve.gov/boarddocs/speeches/2005/200503102/default.htm.

 

37. Menzie Chinn and Hiro Ito, "An Update on Medium-Term Determinants of Current Account Imbalances–The ‘Savings Glut’ Hypothesis Examined," 1 August 2005, at http://www.ssc.wisc.edu/~mchinn/Chinn_Ito_CAmemo.pdf.

 

38. "IMF Establishes an Exogenous Shocks Facility," Public Information Notice No. 05/163, 8 December 2005, International Monetary Fund, Washington, DC: at http://www.imf.org/external/np/sec/pn/2005/pn05163.htm.

 

39. Richard Cooper, "Living with Global Imbalances: A Contrarian View," op. cit., p. 7.

 

40. David Barboza, "Trade Surplus Tripled in ’05, China Says," 12 January 2006, The New York Times , p. C1.

 

41. Barry Eichengreen, "Can a Rapidly-Growing Export-Oriented Economy Smoothly Exit an Exchange Rate Peg? Lessons for China from Japan’s High Growth Era," National Bureau of Economic Research, Working Paper W11625, September 2005, at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=807614 . See also, Enrica Detragiache, Ashoka Mody, and Eisuke Okada, "Exits from Heavily Managed Exchange Rate Regimes," IMF Working Paper WP05/39, February 2005, at http://www.imf.org/external/pubs/ft/wp/2005/wp0539.pdf

 

42. Willem Buiter, "Optimal Currency Areas: Why Does the Exchange Rate Matter?" speech at the Royal College of Physicians, Edinburgh, on 26 October 1999, at http://www.nber.org/~wbuiter/scotland.pdf, at p. 2.

 

43. James W. Dean, "Exchange Rate Regimes for the 21st Century: Asia, Europe, and the Americas," October 2003, prepared for a seminar at Carleton University, at http://www.carleton.ca/economics/cep/cep03-10.pdf .

 

44. Paul Krugman, "What Do We Need to Know about the International Monetary System?" pp. 509-29, as quoted in Julius Horvath, "Asymmetric Shocks: A European Experience," at http://sioux.ainova.sk/ainova/web/aef/aurel.pdf

 

45. Mark R. Stone and Ashok J. Bhundia, "A New Taxonomy of Monetary Regimes," IMF Working Paper WP/04/191, October 2004, at http://www.imf.org/external/pubs/ft/wp/2004/wp04191.pdf. The last category, "Inflation Targeting Lite" echoes the description of diet foods, such as "lite butter" or "lite beer".

 

46. Jeffrey A. Frankel, "No Single Currency Regime is Right for All Countries or at All Times," September 1999, National Bureau of Economic Research, Working Paper 7338, at http://www.nber.org/papers/W7338. The paper is substantially similar to Prof. Frankel’s 21 May 1999, testimony before the Committee on Banking and Financial Services at http://ksghome.harvard.edu/~jfrankel/TESTIMNY.HBC.PDF.

 

47. Vivek H. Dehejia, "Currency Options for Emerging Economies: Concepts and Arguments," Revised Version, 28 March 2004, at http://http-server.carleton.ca/~vdehejia/dehejiabratislavarevised.pdf.

 

48. See, for example, Robert E. Litan and Benn Steil, Financial Statecraft . London and New Haven, CT: Yale University Press, 2006.

 

49. Guillermo A. Calvo and Carmen M. Reinhart, "Fear of Floating," National Bureau of Economic Research, Working Paper No. W7993, November 2000, at

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=248599

 

50. Graham Bird and Dane Rowlands, "Bi-Polar Disorder: Exchange Rate Regimes, Economic Crises, and the IMF," 26 April 2005, at http://www.econ.surrey.ac.uk/discussion_papers/2005/DP07-05.pdf

 

51. Thomas D. Willett, "The Political Economy of Exchange Rate Regimes and Currency Crises," March 2004, background paper for the Claremont Conference on the Political Economy of Exchange Rates, 1 and 2 April 2004, at http://www.cgu.edu/include/spe_Willett5.pdf .

 

52. Jesus Rodriguez Lopez and Hugo Rodriguez Mendizabal, "How Tight Should One’s Hands Be Tied? Fear of Floating and the Credibility of an Exchange Rate Regime," Working Paper Series WP 06.03, Universidad Pablo de Olavide, Sevilla, Espana, 2 March 2006, at http://www.upo.es/serv/bib/wps/econ0603.pdf

 

53. Assaf Razin and Yona Rubinstein, "Evaluation of Currency Regimes: The Unique Role of Sudden Stops," Economic Policy , January 2006, pp. 119-52, at http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0327.2006.00155.x

 

54. Ricardo Hausmann and Ugo Panizza, "The Mystery of Original Sin," 16 July 2002, at http://ksghome.harvard.edu/~rhausma/paper/mistery_march3.pdf

 

55. For a review of the EWS literature, see Jan Jacobs, Gerard Kuper, and Lestano, "Currency Crises in Asia: A Multivariate Logit Approach," Working Paper, July 2005, Centre for Economic Research (CCS), University of Gronningen, Netherlands, at http://ccso.eldoc.ub.rug.nl/FILES/root/2005/200506/200506.pdf.

 

56. Robert Mundell, "A Theory of Optimum Currency Areas," American Economic Review , May 1961, pp. 657-65, at p. 662, and as Chapter 12 in his book, International Economics , pp. 177-86, at http://www.columbia.edu/~ram15/ie/ie-12.html .

 

57. Albert Camus brought the tragedy of the mythical Greek character, Sisyphus, to the modern reader in The Myth of Sisyphus . See Camus’ text at http://www.sccs.swarthmore.edu/users/00/pwillen1/lit/msysip.htm and see an analysis at http://www.nyu.edu/classes/keefer/hell/camus.html .

 

58. Alberto Alesina and Robert J. Barro, "Introduction," in Currency Unions. Stanford, CA: Edited by Alberto Alesina and Robert J. Barro, Hoover Institution Press, 2001, p. xv.

 

Chapter 4. Monetary Unions

1. The Toscana region translates as Tuscany in English. I’ve tried in this book to use the rule that localities should be known as they are known by the local inhabitants, rather than just to speakers of English. It’s easier to apply that rule for non-state localities as Toscana and the Arabian Gulf, than for countries such as Italy and Germany, which are known as Italia and Deutschland to their citizens.

 

2. Scaruffi, Gasparo, L’Alitinonfo. Reggio Emilia . Italy:1582, as cited by Robert Mundell, at IMF Economic Forum "One World, One Currency: Destination or Delusion?" 8 November 2000, with Alexander Swoboda, Maurice Obstfeld and Paul Masson, at http://www.imf.org/external/np/tr/2000/tr001108.htm. Not having read the original text, it’s assumed that even if Count Scaruffi used the term "world," he was really thinking of Europe at the time, and there was no consideration of including China, India, or Japan, of which little was known in Europe.

 

3. Luca Einaudi, "’The Generous Utopia of Yesterday can become the Practical Achievement of Tomorrow’: 1000 Years of Monetary Union in Europe," National Institute of Economic Review [Italy] , 1 April 2000, p. 2, at http://www.allbusiness.com/periodicals/article/539455-1.html.

 

4. Sam Vaknin, "The History of Previous Currency Unions," at http://samvak.tripod.com/nm032.html.

 

5. John Hawkins and Paul Masson, "Introduction" to "Regional Currencies and the Use of Foreign Currencies," Annex A, May 2003, Bank for International Settlements, p. 27, at http://www.bis.org/publ/bppdf/bispap17.pdf.

 

6. For more details, see Benjamin J. Cohen, "Monetary Unions," at EH.net, Economic History Net Online Encyclopedia at http://www.eh.net/encyclopedia/article/cohen.monetary.unions.

 

7. Eric Helleiner, "Dollarization Diplomacy: US Policy Toward Latin America Coming Full Circle?" TIPEC Working Paper 02/8, Trent International Political Economy Centre, Ontario, 2002, at http://www.trentu.ca/tipec/2helleiner8.pdf.

 

8. Sam Vaknin, "The History of Previous Currency Unions," at http://samvak.tripod.com/nm032.html .

 

9. Luca Einaudi, "’The Generous Utopia of Yesterday can become the Practical Achievement of Tomorrow’: 1000 years of Monetary Union in Europe," National Institute Economic Review (Italy) , 1 April 2000, p. 8 (in electronic copy purchased from Amazon.com. For a more complete treatment of European monetary union, see his Money and Politics: European Monetary Unification and the International Gold Standard (1865-1873) , published by EH.NET (January 2004), and reviewed by Benjamin J. Cohen at http://www.eh.net/bookreviews/library/0733.shtml.

 

10. "Finance Ministers Express Confidence in Strength, Stability of EC Currency," Press Release from the Office of the Prime Minister, St. Kitts & Nevis, 22 February 2006, at http://www.cuopm.com/newsitem.asp?articlenumber=845

 

11. See website of Eastern Caribbean Monetary Union, at http://www.eccb-centralbank.org/About/index.asp.

 

12. J. E. Meade, "The Balance of Payments Problems of a Free Trade Area," Economics Journal , Sept. 1957, pp. 379-96.

 

13. Tibor Scitovsky, Economic Theory and Western European Integration . London: Allen and Unwin, 1958, cited by Robert Mundell at http://www.columbia.edu/~ram15/ie/ie-12.html .

 

14. T. K. Jayaraman, "Prospects for a Currency Union in the South Pacific," 31 December 2001, p. 12, at http://72.14.207.104/search?q=cache:-tvAkNmvDHIJ:www.fdc.org.au/files/gdnjaya.pdf+jayaraman+currency+prospects&hl;=en.

 

15. Robert Mundell, "A Theory of Optimum Currency Areas," American Economic Review , May 1961, pp 657-65, at p. 661. The article is also contained in Mundell’s textbook, International Economics , as chapter 12, pp. 177-86, and online at http://www.columbia.edu/~ram15/ie/ie-12.html.

 

16. Ibid., at p. 661.

 

17. Robert Mundell, "A Plan for a European Currency" and "Uncommon Arguments for Common Currencies," both in H. G. Johnson and A. K. Swoboda, The Economics of Common Currencies . London, UK: Allen and Unwin, 1973, pp. 143-72. See also "Capital Mobility and Stablilization Policy under Fixed and Flexible Exchange Rates," in Canadian Journal of Economics and Political Science , Vol. 29, November 1963, pp. 475-85. Citations from Ronald McKinnon’s, "Optimum Currency Areas and the European Experience," 16 October 2001, at http://www.stanford.edu/~mckinnon/papers/optimumreveur.pdf.

 

18. Robert Mundell, 1961, op. cit., p. 657.

 

19. The reference to a "$64 trillion question" refers to a US television quiz show in the 1950s called the "$64,000 question." On the show that question was the question, as is the question now of planning and implementing a Single Global Currency. See "The $64,000 Question and the $64,000 Challenge" at http://www.museum.tv/archives/etv/S/htmlS/$64000quest/$64000quest.htm.

 

20. "Introduction," Brunei Darussalam Currency Board, at http://www.finance.gov.bn/bcb/bcb_index.htm.

 

21. Lubin Kobla Doe, "Reforming External Tariffs in Central and Western African Countries," IMF Working Paper, No. 06/12, 1 January 2006, at http://www.imf.org/external/pubs/cat/longres.cfm?sk=18617.0.

 

22. See the major analysis of dollarization, The Dollarization Debate, edited by Dominick Salvatore, James W. Dean, and Thomas D. Willett. Oxford, UK: Oxford University Press, 2003. See also, for an analysis of dollarization in the Americas, Harvey Arbelaez, "The Political Economy of the Dollarization Debate in the Americas: Pros and Cons, Myths and Realities, Issues and Implications," from a First Paper Development Workshop in Stockholm, July 2004, at http://scholar.google.com/scholar?hl=en&lr;=&q;=cache:iVS0990SdxAJ:faculty.fuqua.duke.edu/ciber/programs/pdf/arbe.pdf+ percent22harvey+arbelaez percent22+dollarization.

 

23. The term "ization" has no etymological relation to Alain Ize, who is an economist at the International Monetary and who has written about dollarization. See his "Financial Dollarization" written together with Eduardo Levy Yeyati, Journal of International Economics, Vol 59, 2003, pp 323-47, and at http://www.utdt.edu/~ely/dolarJIE_final3.PDF.

 

24. For an analysis of the dollarizations in Ecuador and El Salvador, see Jose Luis Cordeiro’s La Segunda Muerte de Sucre. Guayaquil, Ecuador: Instituto Ecuatoriano de Economia Politica, 1999. The title translates as The Second Death of Sucre . Sucre was the name of Ecuador’s pre-dollarization currency, named after the South American liberation hero, Antonio Jose de Sucre. The book’s text is in Spanish.

 

25. Stanley Fischer, "Ecuador and the International Monetary Fund" in Currency Unions . Stanford, California: edited by Alberto Alesina and Robert J. Barro, Hoover Institution Press, 2001, pp. 2-10.

 

26. Stanley Fischer, ibid., pp 2-10.

 

27. "IMF Executive Board Concludes 2004 Article IV Consultation with El Salvador," Public Information Notice, No. 05/21, International Monetary Fund, 14 February 2005, at http://www.imf.org/external/np/sec/pn/2005/pn0521.htm.

 

28. US Department of State, "2005 Investment Climate Statement–El Salvador," at http://www.state.gov/e/eb/ifd/2005/43026.htm.

 

29. Benn Steil, "The Developing World Should Abandon Parochial Currencies," Financial Times , 17 January 2006, at https://registration.ft.com/registration/barrier?referer=http://news.ft.com/home/europe&location;=http percent3A//news.ft.com/cms/s/ef6ffc22-86bf-11da-8521-0000779e2340.html.

 

30. Jeffrey A. Frankel and Andrew K. Rose, "An Estimate of the Effect of Currency Unions on Trade and Growth" in Currency Unions . Stanford, CA: Edited by Alberto Alesina and Robert J. Barro, Hoover Institution Press, 2001, p. 37.

 

31. This expression originated in the British colonies in America when taxes were imposed by the British Parliament, in which the colonies had no elected representatives. See the summary on the internet of a 2005 exhibition in the British Parliament, "No Taxation Without Representation" at http://www.parliament.uk/parliamentary_publications_and_archives/parliamentary_archives/archives___stamp_act.cfm. See also, the Wikipedia entry, including the reference to today’s license plates in Washington, DC, the US capital where citizens do not have elected representatives in the US Congress. At http://en.wikipedia.org/wiki/No_taxation_without_representation

 

32. "Dollars and Cents", Forbes.com, at http://www.forbes.com/2006/02/11/cx_dal_money06_0214moneyfactslide_8.html?thisSpeed=6000. Complicating the seigniorage value is the life expectancy of paper money. See "R.I.P." at Forbes.com, at http://www.forbes.com/2006/02/11/cx_dal_money06_0214moneyfactslide_12.html?thisSpeed=6000, "One-dollar bills have an average lifespan of twenty-two months, while ten-dollar notes live for only eighteen months. Twenties can circulate for twenty-five months, and $100 notes last about five years," See also "New Money" at Forbes.com at http://www.forbes.com/2006/02/11/cx_dal_money06_0214moneyfactslide_3.html?thisSpeed=6000, "The US Bureau of Engraving and Printing produces thirty-five million notes a day with a face value of approximately $635 million. Ninety-five percent of the notes printed each year are used to replace notes already in circulation, and forty-five percent of the notes printed are $1 notes."

 

33. "Measuring Profits from Currency Issue," Reserve Bank of Australia Bulletin , July 1997, pp. 1-4, Reserve Bank of Australia.

 

34. Kurt Schuler and Robert Stein, "The International Monetary Stability Act: An Analysis." Paper for North-South Institute Conference "To Dollarize or Not to Dollarize?" in Ottowa, 5 October 2000, at http://users.erols.com/kurrency/ottawa3.htm. The bill was primarily about dollarization. See the hearings before the Senate Banking Committee, Subcommittee on International Trade and Finance on 22 April 1999, 15 July 1999, and 8 February 2000, at http://banking.senate.gov/99_04hrg/042299/index.htm , http://banking.senate.gov/99_07hrg/071599/index.htm, and http://banking.senate.gov/00_02hrg/020800/index.htm.

 

35. Adam S. Posen, editor, The Euro at Five: Ready for a Global Role? Washington, DC: Institute for International Economics, 2005, at pp. 28-29. See online version of C. Fred Bergsten’s chapter "The Euro and the Dollar: Toward a Finance G-2?" 26 February 2004, at http://www.iie.com/publications/papers/bergsten0204-2.pdf

 

36. For an excellent summary of the progress toward European Monetary Union, see Chapter 4, "European Monetary Unification" in John Edmunds’ and John Marthinsen’s Wealth by Association, Global Prosperity through Market Unification. Westport, CT: Praeger Publishers, 2003, pp. 43-77.

 

37. Treaty on European Union, popularly known as the Maastricht Treaty, on the website of the European Central Bank at http://www.ecb.int/ecb/legal/pdf/maastricht_en.pdf .

 

38. "Facts and Figures–More Facts and Figures on the European Union and the United States," Delegation of the European Commission to the US, at http://www.eurunion.org/profile/EUUSStats.htm.

 

39. Denmark National Bank, "euro referendum," at http://www.nationalbanken.dk/dnuk/eurohist.nsf/side/Euro_referendum_.

 

40. Bank of Canada "10-year Currency Converter" utility, using dates from 1 January 1999 through 10 December 2005, at http://www.bankofcanada.ca/en/rates/exchform.html .

 

41. Ibid.

 

42. Meera Louis, "Slovenia Becomes First Eastern State to Ask for Euro(Update 1)," Bloomberg.com, 8 March 2006, at http://www.bloomberg.com/apps/news?pid=10000087&sid;=azJ0XluoStac&refer;=top_world_news#, and "Lithuania Applies for Euro Over EU Inflation Warnings (Update 2)," Bloomberg.com, 16 March 2006, at

http://www.bloomberg.com/apps/news?pid=10000085&sid;=aAlZ00__MQkA&refer;=europe.

 

43. The 1997 Treaty of Amsterdam modified the Maastricht Treaty. Among other changes affecting the euro, it modified the first phrase of the enabling "Article B" from "to promote economic and social progress, which is balanced and sustainable " to "to promote economic and social progress and a high level of employment and to achieve balanced and sustainable development ," (changes are underlined in the original) at http://www.ecb.int/ecb/legal/pdf/amsterdam_en.pdf.

 

44. Willem H. Buiter, "The EMU and the NAMU: What Is the Case for North American Monetary Union?" September 1999, Canadian Public Policy , pp. 285-306, at p. 302, at http://qed.econ.queensu.ca/pub/cpp/sept1999/Buiter.pdf.

 

45. Paul De Grauwe and Claudia Costa Storti, "Is Monetary Policy in the Eurozone Less Effective than in the US?" CESifo Working Paper No. 1606, November 2005, at http://www.cesifo.de/pls/guestci/download/CESifo percent20Working percent20Papers percent202005/CESifo percent20Working percent20Papers percent20November percent202005/cesifo1_wp1606.pdf.

 

46. States the ECB’s website, " The primary objective of the ECB’s monetary policy is to maintain price stability. The ECB aims at inflation rates of below, but close to, 2% over the medium term." "Monetary Policy" at http://www.ecb.int/mopo/html/index.en.html.

 

47. Andrew Stead, "ECB raises interest rates, says no more hikes for now," 2 December 2005, ABCmoney.co.uk, at http://www.abcmoney.co.uk/news/0220051461.htm.

 

48. M. Hashem Pesaran, L. Vanessa Smith, and Ron P. Smith, "What if the UK Had Joined the Euro in 1999? An Empirical Evaluation Using a Global VAR," June 2005, CESifo Working Paper 1477, at http://www.cesifo.de/pls/guestci/download/CESifo percent20Working percent20Papers percent202005/CESifo percent20Working percent20Papers percent20June percent202005/cesifo1_wp1477.pdf.

 

49. "Toward a Single Euro Payments Area, Objectives and Deadlines (4th Progress Report)," European Central Bank, 17 February 2006, at http://www.ecb.int/pub/pdf/other/singleeuropaymentsarea200602en.pdf.

 

50. "SEPA: Everything You Need to Know," Gtnews.com, 17 January 2006, p. 6, at http://www.gtnews.com/feature/112.cfm.

 

51. The Arabian Gulf is known by that term, albeit not in English, to the people living in that region. The term Persian Gulf is used by non-Arabs. Using the rule that geographical places, cities, and countries should be known to the world as they are known to the local inhabitants, the term "Arabian Gulf" is used here.

 

52. Michael Sturm and Nikolaus Siegfried, "Regional Monetary Integration in the Member States of the Gulf Cooperation Council," European Central Bank, June 2005, at http://www.ecb.int/pub/pdf/scpops/ecbocp31.pdf

 

53. Abdulrahman K. L. Al-Mansouri and Claudia Dziobek, "Providing Official Statistics for the Common Market and Monetary Union in the Gulf Cooperation Council (GCC) Countries: A Case for ‘Gulfstat’,"

 IMF Working Paper 06/38, at http://www.imf.org/external/pubs/ft/wp/2006/wp0638.pdf

 

54. "Russia-Belarus Union to Have Common Currency Starting from 2008," ITAR-TASS news agency, 27 January 2006, at http://www.tass.ru/eng/level2.html?NewsID=2877935&P.Num;=0.

 

55. Vladimir Chaplygin, Andrew Hughes Hallet, and Christian Richter, "Monetary Integration in the Ex-Soviet Union: A ‘Union of Four’?" Economics of Transition , March 2006, and at http://www.webmeets.com/files/papers/SAE/2004/118/The percent20gang percent20of percent20four percent20_final_.pdf

 

56. For an economic analysis of the West African prospects, see Xavier DeBrun, Paul Masson, and Catherine Pattillo, "Monetary Union in West Africa: Who Might Gain, Who Might Lose, and Why?" IMF Working Paper 02/226, December 2002, at http://www.brookings.org/views/articles/masson/december2002.htm.

 

57. Chief Mannah, "WAMZ Governors allay fears following delay of Eco," 11 May 2005, The Daily Observer, The Gambia, at http://www.observer.gm/enews/index.php?option=com_content&task;=view&id;=376&Itemid;=33.

 

58. Bester Gabotlale, "Links with Madagascar Could Benefit Botswana," 23 February 2006, at http://allafrica.com/stories/200602240394.html .

 

59. Bogonko Bosire, "East Africa Currency Coming," 14 April 2006, News24.com, at http://www.news24.com/News24/Africa/News/0,,2-11-1447_1689901,00.html.

 

60. "Make Hay While the Sun Shines, says Mboweni," 22 November 2005, Mail & Guardian Online, South Africa, at http://www.mg.co.za/articlep..aspx?area=/breaking_news/breaking_news__business/&articleid;=257213.

 

61. See, for example, Arthur Grimes, "Regional and Industry Cycles in Australasia: Implications for a Common Currency," Motu Working Paper 05-04, May, 2005, at http://www.motu.org.nz/pdf/Motu_Working_Papers/motuwp_05_04.pdf

 

62. Andrew Coleman, "Economic Integration and Monetary Union," Treasury Working Paper 99/6, 1999, p. 32, at http://www.treasury.govt.nz/workingpapers/1999/99-6.asp.

 

63. See Margaret Jackson and Kerry McDonald, "Joint Statement by Co-Chairs of the Australia New Zealand Leadership Forum," 16 May 2004, at http://www.mfat.govt.nz/foreign/regions/australia/leadershipforum/chairstatementmay04.html.

 

64. See "Common Currency Not Ruled Out in Trans-Tasman Talks," Radio New Zealand, 9 February 2006, at

http://www.radionz.co.nz/news/bulletins/radionz/200602090733/32ea38f7

 

65. T. K. Jayaraman, "Prospects for a Currency Union in the South Pacific," December 2001, p. 12, at http://72.14.207.104/search?q=cache:-tvAkNmvDHIJ:www.fdc.org.au/files/gdnjaya.pdf+jayaraman+currency+prospects&hl;=en.

 

66. Sweta Chaman Saxena, "Can South Asia Adopt a Common Currency?" Journal of Asian Economics , August 2005, pp. 635-62, athttp://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6W53-4GNTFR7-1&_coverDate=08/31/2005&_alid=333175128&_rdoc=1&_fmt=&_orig=search&_qd=1&_cdi=6559&_sort=d&view;=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5;=79ff37ee9475f67b178d416a1277d9e5, and at http://econwpa.wustl.edu:8089/eps/if/papers/0508/0508001.pdf.

 

67. Haruhiko Kuroda, "Single Currency Will Climax Asia’s Economic Integration," Shanghai Daily, 7 November 2005, at http://www.shanghaidaily.com/cat/9/86/Opinion.htm.

 

68. "Asian Common Currency Not to Come in Short Term!" VNECONOMY, Viet Nam Economic Times, 25 February 2006, at http://www.vneconomy.com.vn/eng/index.php?param=article&catid;=01&id;=43b1548514650f .

 

69. Arief Ramayandi, "ASEAN Monetary Cooperation: Issues and Prospects," Pacific Economic Paper No. 349, Australia-Japan Research Centre, Asia Pacific School of Economics and Management, p. 15, at http://www.eaber.org/intranet/documents/39/636/AJRC_Ramayandi_05.pdf.

 

70.Marcelo Sanchez, "Is Time Ripe for a Currency Union in Emerging East Asia? The Role of Monetary Stabilization," European Central Bank Working Paper 567, December 2005, at http://www.ecb.int/pub/pdf/scpwps/ecbwp567.pdf

 

71. "S. America Launches Trading Bloc," BBC News, 9 December 2004, at http://news.bbc.co.uk/1/hi/business/4079505.stm. See also the "Cusco Declaration" at http://www.comunidadandina.org/ingles/document/cusco8-12-04.htm

 

72. Translated from Spanish, "Mercosur" means "Common Market of the Southern Cone." For text of the Treaty of Ascuncion, effective 31 December 1994, see http://www.sice.oas.org/trade/mrcsr/mrcsrtoc.asp.

 

73. Ralf Kronberger, "A Cost Benefit Analysis of a Monetary Union for Mercosur with Particular Emphasis on the Optimum Currency Area Theory?" at http://econwpa.wustl.edu:80/eps/mac/papers/0407/0407010.pdf, and Mariam Camarero, Renato Flores and Cecilio Tamrait, "Monetary Union and Productivity Differences in Mercosur countries," Journal of Policy Modeling , January 2006, pp. 53-66, at http://www.sciencedirect.com/science/article/B6V82-4H21FN1-1/2/0ddf39a20e2b6569adaa7b24a23d60c5

 

74. Herbert Grubel, "The Case for the Amero–The Economics and Politics of a North American Monetary Union," The Fraser Institute, Critical Issues Bulletin , 1999, at

http://www.fraserinstitute.ca/admin/books/files/amero.pdf.

 

75. Thomas J. Courchene, "A Canadian Perspective on North American Monetary Union," 5 January 2001, p. 23, at http://www.irpp.org/newsroom/archive/2001/0105pape.pdf.

 

76. George von Furstenberg, "Mexico versus Canada: Stability benefits from making common currency with USD?" The North American Journal of Economics and Finance , March 2006, pp 65-78, at

http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6W5T-4HSXVCN-1&_coverDate=03 percent2F31 percent2F2006&_alid=376363228&_rdoc=1&_fmt=&_orig=search&_qd=1&_cdi=6579&_sort=d&view;=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5;=79a531d2b7f58f38bcd5e0bf410bef09.

 

77. The Central American Monetary Union Council was succeeded in 1974 by the Central American Monetary Agreement, which has a website, in Spanish, at http://www.secmca.org/.

 

78. For further information about currency hedging, see Alan Deardorff’s definition, "To offset risk. In the foreign exchange market, hedgers use the forward market to cover a transaction or open position and thereby reduce exchange risk." The term applies most commonly to trade," at http://www-personal.umich.edu/~alandear/glossary/. See also, Rui Albuquerque, "Optimal Currency Hedging," 11 April 2003, at http://ideas.repec.org/p/wpa/wuwpfi/0405010.html.

 

79. John Edmunds and John Marthinsen, Wealth by Association, Global Prosperity Through Market Unification . Westport, CT: Praeger Publishers, 2003.

 

80. Ibid., p. 181.

 

81. Ibid., p. 6.

 

82. "Moody’s Issues Positive Rating Revisions to 7 States Posed [sic] to Join EMU," Forbes.com from AFX News Limited, 9 March 2006, at http://www.forbes.com/work/feeds/afx/2006/03/09/afx2582548.html .

 

83. John Edmunds and John Marthinsen,"Wealth Creation via Currency Unification & Mama Mia! Here We Go Again!" presentation at the Second Annual Single Global Currency Conference, Bretton Woods, New Hampshire, July 2005, at http://www.singleglobalcurrency.org/documents/WealthCreationviaCurrencyUnificationbyEdmundsandMarthinsenExecutiveSummary050714.doc .

 

84. Richard Cooper, "Toward A Common Currency?" June 2000, p. 19, presented at the conference on the Future of Monetary Policy and Banking, organized by the IMF and the World Bank, at http://www.worldbank.org/research/interest/confs/upcoming/papersjuly11/cooper.pdf.

 

85. The money supply in the United States is defined as M1, M2, and M3. The Federal Reserve defines M1 as "( 1) Currency outside the US Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) Travelers checks of non-bank issuers; (3) Demand deposits at commercial banks (excluding those amounts held by depository institutions, the US government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (4) Other checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union share draft accounts, and demand deposits at thrift institutions." See "Money Stock Measures: Federal Reserve Statistical Release," 19 January 2006, at http://www.federalreserve.gov/releases/h6/current/.

 

86. Federal Reserve Board, "Reserve Requirements," at http://www.federalreserve.gov/monetarypolicy/reservereq.htm and Federal Reserve Bank of New York, "Reserve Requirements," at http://www.ny.frb.org/aboutthefed/fedpoint/fed45.html.

 

87. Marion Williams, Governor, Central Bank of Barbados, "Foreign Exchange Reserves: How Much Is Enough?" delivered at the twentieth Adlith Brown Memorial Lecture at the Central Bank of the Bahamas, 2 November 2005, at http://www.centralbank.org.bb/Publications/Adlith_Brown_Lec.pdf.

 

88. Basil Moore, Shaking the Invisible Hand: Complexity, Endogenous Money and Exogenous Interest Rates . London, UK: Palgrave MacMillan, 2006, Chapter 19, p. 1 of chapter.

 

89. "Report to Congress on International Economic and Exchange Rate Policies, May 2005," US Dept. of the Treasury, at http://www.treas.gov/press/releases/reports/js2448_report.pdf.

 

90. "US Treasury Studying Changes to Forex Report," 18 January 2006, Reuters, at http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID;=2006-01-18T200803Z_01_WAT004692_RTRIDST_0_ECONOMY-TREASURY-FOREX-URGENT.XML. Note that despite the semiannual anxiety about what the report will contain, it has not specifically named a country as a currency manipulator since naming China in 1994, at http://www.bloomberg.com/apps/news?pid=71000001&refer;=home&sid;=aXWNQNw6wE0I.

 

91. Article 4 (Obligations Regarding Exchange Arrangements), Section 1 (General Obligations of Members), iii, of the Articles of Agreement, International Monetary Fund, as signed at Bretton Woods in 1944, at http://www.imf.org/external/pubs/ft/aa/aa04.htm#1.

 

92. Jeffrey A. Frankel and Andrew K. Rose, "An Estimate of the Effect of Currency Unions on Trade and Growth" in Currency Unions, Stanford, CA: edited by Alberto Alesina and Robert J. Barro, Hoover Institution Press, 2001, p. 32.

 

93. Andrew K. Rose and Eric van Wincoop, "National Money as a Barrier to International Trade: The Real Case for Currency Union." Presented at American Economic Association Meeting on "Currency Unions" on 6 January 2001, at http://faculty.haas.berkeley.edu/arose/RvWr.pdf.

 

94. Andrew Rose and T. D. Stanley, "A Meta-Analysis of the Effect of Common Currencies on International Trade," Journal of Economic Surveys , July 2005, p. 347, at http://faculty.haas.berkeley.edu/arose/MetaR.pdf.

 

95. Andrew K. Rose, "The effect of Common Currencies on International Trade: Where Do We Stand?" (draft), 7 August 2002, at http://faculty.haas.berkeley.edu/arose/MASOP02.pdf.

 

96. John F. Helliwell, and Lawrence l. Schembri, "Borders, Common Currencies, Trade and Welfare: What Can We Learn from the Evidence?" Bank of Canada Review , Spring 2005, pp 19-35, at http://www.bankofcanada.ca/en/review/spring05/helliwell.pdf.

 

97. Alejandro Micco, Guillermo Orgonez, and Ernesto Stein. "The EMU Effect on Trade: What’s in it for the UK?" as Chapter 7 of Prospects for Monetary Unions after the Euro . Cambridge, MA: MIT Press, 2005, p. 4, Paul De Grauwe and Jacques Melitz, editors, and at http://www.eea-esem.com/papers/eea-esem/2003/2397/UK-EMU percent20July14b.pdf.

 

98. Paul De Grauwe, Economics of Monetary Union. Oxford, UK: Oxford University Press, 2005, 6th edition, p. 28.

 

99. Robert Mundell, "A Theory of Optimum Currency Areas," 1961, op. cit., p. 660.

 

100. "Money and Sovereignty–Money Talks, But What Does It Say?" Brochure from the IMF Center, Washington, DC 2006.

 

101. For further information about euro coins, see the European Central Bank website at http://www.euro.ecb.int/en/section/euro0.html.

 

102. Michael Emerson, Daniel Gros, Alexander Italiener, Jean Pisani-Ferry, Horst Reichenbach, One Market, One Money–An Evaluation of the Potential Benefits and Costs of Forming an Economic and Monetary Union. Oxford, UK: Oxford University Press, 1992, p. 11.

 

103. Robert Mundell, "The Case for a World Currency," 2005, op. cit., p. 467.

 

104. Robert Mundell, "A Theory of Optimum Currency Areas," 1961, op. cit., p. 660.

 

105. Ibid., p. 661.

 

106. Michael A. Kouparitsas, "Is the United States an Optimum Currency Area? An Empirical Analysis of Regional Business Cycles," December 2001, Federal Reserve Bank of Chicago, at http://www.chicagofed.org/publications/workingpapers/papers/Wp2001-22.pdf

 

107. Barry Eichengreen, "Is Europe an Optimum Currency Area?" National Bureau of Economic Research, Working Paper W3579, January 1991, abstract at http://ssrn.com/abstract=226815. See also, Paul De Grauwe and Wim Vanhaverbeke, "Is Europe an Optimum Currency Area? Evidence from Regional Data," International Macroeconomics , May 1991, at http://www.cepr.org/pubs/new-dps/dplist.asp?dpno=555, and Peter Bofinger, "Is Europe an Optimum Currency Area?" International Macroeconomics , February 1994. The question is so popular among students that essays are available for sale online with the subject, "Is Europe an Optimum Currency Area?" at http://www.essaysadepts.com/research/Is_Europe_an_Optimum_Currency_-148661.html.

 

108. Hans N. E. Bystrom, Karin Olofsdotter, and Lars Soderstrom, "Is China an optimum currency area?" Journal of Asian Economics, August 2005, pp. 612-34, at http://www.sciencedirect.com/science/article/B6W53-4GMJ958-1/2/1b13be7ee1c23c16bc6a05ca6e9589bc.

 

109. Jack L. Carr and John E. Floyd, "Real and Monetary Shocks to the Canadian Dollar: Do Canada and the US Form an Optimal Currency Area?" Working Paper, University of Toronto #UT-ECIPA-Floyd-01-02, at

http://www.epas.utoronto.ca/ecipa/archive/UT-ECIPA-FLOYD-01-02.pdf.

 

110. Barry Eichengreen and Tamim Bayoumi, "Is Asia an Optimum Currency Area? Can It Become One? Regional, Global, and Historical Perspectives on Asian Monetary Relations," Center for International and Development Economics Research, University of California, 1996, at eScholarship Repository, University of California, at http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1033&context;=iber/cider.

 

111. Beatrice K. Mkenda, "Is East Africa an Optimum Currency Area?" Working Papers in Economics, Goteborg University, Number 41, April 2001, at http://www.handels.gu.se/epc/data/html/pp./PDF/gunwpe0041.pdf

 

112. Jeffrey A. Frankel and Andrew K. Rose, "The Endogeneity of the Optimum Currency Area Criteria," National Bureau of Economic Research, Revised Draft, 25 September 1997, pp. 1-30, at

http://faculty.haas.berkeley.edu/arose/ocaej.pdf.

 

113. Ibid., p. 22.

 

114. For a review of the "endogeneity" literature, see Paul DeGrauwe and Francesco Paolo Mongelli, "Endogeneities of Optimum Currency Areas– What Brings Countries Sharing a Single Currency Together?" European Central Bank Working Paper No. 468, April 2005, at http://www.ecb.int/pub/pdf/scpwps/ecbwp468.pdf.

 

115. IMF Economic Forum "One World, One Currency: Destination or Delusion?" 8 November 2000, with Paul Masson, Robert Mundell, Maurice Obstfeld, and Alexander Swoboda. Transcript is at http://www.imf.org/external/np/tr/2000/tr001108.htm, and see IMF Survey article, "Economic Forum-Despite Trend Toward Fewer Currencies, a Single World Currency Seems Unlikely in Near Future," 11 December 2000, p. 391, at http://www.imf.org/external/pubs/ft/survey/2000/121100.pdf.

 

116. IMF Survey , ibid.

 

117. Michael Emerson, Daniel Gros, Alexander Italiener, Jean Pisani-Ferry, Horst Reichenbach, One Market, One Money-An Evaluation of the Potential Benefits and Costs of Forming an Economic and Monetary Union . Oxford, UK: Oxford University Press, 1992, p. 46.

 

118. Michael Emerson, ibid., p. 46.

 

119. Hubert P. Janicki, Thierry Warin, and Phanindra Wunnava, "Endogenous OCA Theory: Using the Gravity Model to Test Mundell’s Intuition," 15 June 2005, Center for European Studies, Working Paper No. 125 at http://www.ces.fas.harvard.edu/publications/warin_janicki_wunnava.pdf.

 

120. "UK Membership of the Single Currency: An Assessment of the

Five Economic Tests: EXECUTIVE SUMMARY," Her Majesty’s Treasury, June 2003, at http://www.hm-treasury.gov.uk./media/FFC/8C/EMU03_exec_126.pdf.

 

121. Benjamin J. Cohen, The Future of Money. Princeton, NJ: Princeton University Press, 2004. It must be noted, that despite Professor Cohen’s strong belief that the Single Global Currency is neither useful nor feasible, his correspondence with the Single Global Currency Association has been warm, respectful, and helpful.

 

122. Ibid., p. xiv.

 

123. Ibid., p. 1.

 

124. Ibid., p. 156.

 

125. George von Furstenberg, "A Case Against US Dollarization," Challenge 43, no. 4, as cited by Cohen, op.cit ., p. 158, at http://findarticles.com/p/articles/mi_m1093/is_4_43/ai_64458676.

 

126. Benjamin J. Cohen, The Future of Money, op. cit., p. 158.

 

127. Mark Leonard, Why Europe Will Run the 21st Century. New York, NY: Public Affairs, 2005.

 

128. Matthew Lynn, "Want to Save the Euro? Bring Back 12 Currencies," Bloomberg.com, 27 February 2006, at

http://quote.bloomberg.com/apps/news?pid=10000039&refer;=columnist_lynn&sid;=aPtIvYsjheK0

 

129. Thomas Paine, Common Sense, Rights of Man, and other essential writings of Thomas Paine. New York, NY: New American Library, 2003, p. 3, "Introduction."

 

130. "One for All and All for One," by La Caixa, Barcelona, 2005, at http://www.lacaixa.comunicacions.com/se/ieimon.php?idioma=eng∩=European percent20Union&sbc;=Single+monetary+policy.

 

131. George M. von Furstenberg, "Should Small Countries Join an Existing Monetary Union?" Journal of Economic Integration , March 2002, pp. 104-32, at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=472262. See also George M. von Furstenberg’s "One Region, One Money: The Potential Contribution of Currency Consolidation to Financial Stability in the Developing World," 2001, Pre-Summit G8 Academic Symposium, at http://www.associazioneguidocarli.org/papers/vonfurst.pdf.

 

132. Edmund Conway, "UK Policy Blamed for Soaring Debt Levels," Business Telegraph , 20 February 2006, at http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/02/20/cndebt20.xml&menuId;=242&sSheet;=/money/2006/02/20/ixcitytop.html

 

133. Ronald McKinnon, "Optimum Currency Areas and the European Experience," October 2001,

at http://www.stanford.edu/~mckinnon/papers/optimumreveur.pdf .

 

 

Chapter 5. The Single Global Currency: Origin, Benefits and Costs

 

1. Justice Potter Stewart, in concurring opinion in the United States Supreme Court case, Jacobellis v. Ohio , 378 US 184 (1964). The Court reversed Ohio’s conviction of a theater manager who showed a film the state claimed violated its obscenity laws. Justice Stewart wrote, "I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that." The case is online at http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol;=378&invol;=184.

 

2. John Stuart Mill, Principles of Political Economy with Some of Their Applications to Social Philosophy. London: 7th Edition, with introduction by W.J. Ashley, 1909, first edition published 1848, full text at http://www.econlib.org/library/Mill/mlP36.html . The view that Mill can be credited as being the originator of the concept of the single global currency was shared by Myron Frankman of McGill University in his article, "Beyond the Tobin Tax: Global Democracy and a Global Currency," in Annals , Volume 581, May 2002, pp. 62-73, at p. 63.

 

3. Robert Mundell, "The Case for a World Currency," Journal of Policy Modeling, June 2005, pp. 465-475, p. 468, at http://www.sciencedirect.com/science/article/B6V82-4G5BF09-1/2/0a981dfd39b6bb0ab8800e29fb10f7b1.

 

4. John Stuart Mill, Principles of Political Economy with some of their Applications to Social Philosophy, op. cit.

 

5. "Patterns for an International Coinage," Society of United States Pattern Collectors, (numismatics), at http://www.uspatterns.com/uspatterns/patforincoin.html.

 

6. Robert Mundell, "The Case for a World Currency," op. cit., p. 468.

 

7. Bank for International Settlements, "BIS History," at http://www.bis.org/about/history.htm.

 

8. James M. Boughton, "America in the Shadows: Harry Dexter White and the Design of the International Monetary Fund," January 2006, IMF Working Paper, 06/6, at http://www.imf.org/external/pubs/ft/wp/2006/wp0606.pdf.

 

9. Deardorff’s Glossary of International Economics, at http://www-personal.umich.edu/~alandear/glossary/.

 

10. For more information about SDRs, see the IMF’s FACT sheet at http://www.imf.org/external/np/exr/facts/sdr.htm.

 

11. International Monetary Fund, "Argentina Announces Its Intention to Complete Early Repayment of its Entire Outstanding Obligations to the IMF," Press Release, 15 December 2005, at http://www.imf.org/external/np/sec/pr/2005/pr05278.htm. The funds for that repayment came from a loan from Venezuela, which was more palatable politically than continued indebtedness to the IMF.

 

12. "Post-War Currency Policy," a British Treasury memorandum dated September 1941, reprinted in Donald Moggridge, editor, The Collected Writings of John Maynard Keynes , Vol. 25, Activities , 1940-1944; Shaping the Post-war World, the Clearing Union , Cambridge, UK: Cambridge University Press, p. 31, as quoted in Benjamin J. Cohen, The Future of Money. Princeton, NJ: Princeton University Press, p. 107.

 

13. John Williamson, "Did the Washington Consensus Fail?" Outline of speech at the Center for Strategic & International Studies, Washington, DC, 6 November 2002, Institute for International Economics, at http://www.iie.com/publications/papers/paper.cfm?ResearchID=488. Williamson is recognized as the originator of the term "Washington Consensus" and its criteria for international finance, but he states that capital controls were not part of his proposal.

 

14. Robert Mundell, "A Theory of Optimum Currency Areas," 1961, op. cit., p. 659,

 

15. Robert Mundell, ibid., p. 662.

 

16. Lars Jonung, "Euro: The Great Experiment," CNN.com, 1998 at

http://www.cnn.com/SPECIALS/1998/euro/euro.debates/jonung.html .

 

17. Robert Mundell, "Plan for a World Currency," prepared for hearings on 9 September 1968 before the Subcommittee on International Exchange and Payments of the Joint Economic Committee, being a paper prepared for a conference at Ditchley Park, England, 10-13 September 1968, at pp. 14-28 of the Committee’s report entitled, "Next Steps In International Monetary Reform."

 

18. Robert Mundell, ibid., at p. 19, and quoting from Charles Rist, The Triumph of Gold. New York, NY: 1961, p. 205.

 

19. Robert Mundell, ibid., at p. 25.

 

20. William McChesney Martin, Toward a World Central Bank? 1970, the Per Jacobsson Foundation, an organization within the IMF.

 

21. International Monetary Fund, IMF Survey , 11 May 1998, p. 146. at http://www.imf.org/external/pubs/ft/survey/pdf/051198.pdf.

 

22. Robert Magnuson, "Currency: Why Blocs Can’t Work," The New York Times, 22 July 1979, p. F14.

 

23. Edwin Dale, "The Pound Experiment–Global Financial System Could Gain If a Small Devaluation Is Successful," The New York Times , 20 November 1967, p. 74.

 

24. Richard Cooper, in email to author, "…I do not support a global currency. I cannot think of a way to manage it that would command legitimacy." 18 July 2003.

 

25. George Soros, The Alchemy of Finance. New York, NY: John Wiley & Sons, 1987. Chapter 18 is "Toward An International Central Bank" with a sub-chapter, "An International Currency," pp. 324-344.

 

26. Andrew Krieger, with Edward Claflin, The Money Bazaar. New York, NY: Times Books, 1992, p. 215.

 

27. The Economist, 9 January 1988, "Get Ready for the Phoenix," pp. 9-10, London.

 

28. The Economist, 26 September 1998, "One World, One Money," p. 80, London.

 

29. IMF Economic Forum "One World, One Currency: Destination or Delusion?" 8 November 2000, with Alexander Swoboda, Maurice Obstfeld, and Paul Masson, transcript at http://www.imf.org/external/np/tr/2000/tr001108.htm. See also the article about the forum in the IMF periodical, the IMF Survey , "Economic Forum-Despite Trend Toward Fewer Currencies, A Single World Currency Seems Unlikely in Near Future," 11 December 2000, pp. 75-76, at http://www.imf.org/external/pubs/ft/survey/2000/121100.pdf.

 

30. Barry Eichengreen, "The Parallel Currency Approach to Asian Monetary Integration," prepared for the American Economics Association annual meeting, January 2006, at http://www.aeaweb.org/annual_mtg_papers/2006/0107_1015_1303.pdf

 

31. International Monetary Fund, IMF Survey , "Economic Forum–Despite Trend Toward Fewer Currencies, a Single World Currency Seems Unlikely in Near Future," op. cit., pp. 75-76.

 

32. Charles Goldfinger, "Intangible Economy and Electronic Money," in The Future of Money . Paris: Organization for Economic Co-Operation and Development, 2002 p. 113.

 

33. International Monetary Fund, IMF Survey , "Mundell Calls for a Closer Monetary Union as Step toward Single World Currency," 5 March 2001, pp. 75-76, at http://www.imf.org/external/pubs/ft/survey/2001/030501.pdf.

 

34. International Monetary Fund, IMF Survey , ibid., p. 76.

 

35. Robert Mundell, "Currency Areas, Exchange Rate Systems and International Monetary Reform," paper delivered in Buenos Aires on 17 April 2000, p. 25, at http://www.columbia.edu/~ram15/cema2000.html .

 

36. Paul Volcker, "Toward a Single World Currency to Level the Playing Field," 31 January 2000, International Herald Tribune, at http://www.iht.com/articles/2000/01/31/edpaul.2.t_0.php.

 

37. International Monetary Fund, IMF Survey, "Mundell Calls for a closer Monetary Union as Step toward Single World Currency," 5 March 2001, pp. 75-76, at p. 76, at http://www.imf.org/external/pubs/ft/survey/2001/030501.pdf.

 

38. Ramkishen Rajan, "Counterbalance: The Euro in Asia," Harvard Asia Pacific Review, Winter 2000, at http://hcs.harvard.edu/~hapr/winter00_millenium/Euro.html.

 

39. "Global Financial Stability Report," International Monetary Fund, Table 3 in Statistical Appendix, at p. 171, at http://www.imf.org/External/Pubs/FT/GFSR/2005/02/pdf/statappx.pdf

 

40. Alan Greenspan, "Currency Reserves and Debt," speech before the World Bank Conference on Recent Trends in Reserves Management, Washington, DC, 29 April 1999, at http://www.federalreserve.gov/BoardDocs/Speeches/1999/19990429.htm.

 

41. Michael Emerson, Daniel Gros, Alexander Italiener, Jean Pisani-Ferry, Horst Reichenbach, One Market, One Money–An Evaluation of the Potential Benefits and Costs of Forming an Economic and Monetary Union. Oxford, UK: Oxford University Press, 1992, p. 25.

 

42. Dani Rodrik, "The Social Cost of Foreign Exchange Reserves," National Bureau of Economic Research Working Paper No. 11952, January 2006, at http://papers.nber.org/papers/W11952

 

43. See World Bank, "Total GDP 2004," by country at http://siteresources.worldbank.org/DATASTATISTICS/Resources/GDP.pdf

 

44. World Bank, "Angola Data Profile," using population of 14.0 million and per capita aid of $36.90 per year, at http://devdata.worldbank.org/external/CPProfile.asp?CCODE=AGO&PTYPE;=CP

 

45. See "US International Reserve Position," United States Treasury, 11 January 2006, at http://www.treas.gov/press/releases/20061119281827487.htm.

 

46. International Monetary Fund, "Annual Report of the Executive Board for the Financial Year Ended April 30, 2005," Appendix, Table 1, p. 108, at http://www.imf.org/external/pubs/ft/ar/2005/eng/pdf/file7.pdf.

 

47. The Single Global Currency Association takes no position on the future role of gold in the international financial system, as it focuses on its 3-G goals: Single Global Currency managed by a Global Central Bank, within a Global Monetary Union. In the interest of full disclosure, one of the attendees at the first Annual Single Global Currency Conference in 2004, and an early financial contributor, was James Turk, founder of www.goldmoney.com and a supporter of a larger role of gold in the world’s financial system. For another view of gold see Alex Wallerwein’s, "A Single GLOBAL CURRENCY? Sure, Why Not. But, Only if It’s Gold and Silver Bullion!" at http://www.a1-guide-to-gold-investments.com/global-currency.html#bottomline

 

48. The Single Global Currency Association receives several emails a month from advocates of gold. A typical email came on 25 February 2006 from "Ruler100," and said simply, "I find this very interesting. Just wanted to point out to you that we already have a single global currency. It’s called Gold."

 

49. Kavaljit Singh, Taming Global Financial Flows. New York, NY: Zed Books, 2000, p. 147.

 

50 . In Greek legend, but not Greek mythology, a sword hung over Damocles head by threads of horsehair as he traded places for a day with King Dionysius II of Syracusa, Sicilia. Wikipedia, at http://en.wikipedia.org/wiki/Damocles.

 

51. Rodrigo de Rato, "It’s Not Just Up to Washington to Correct Global Imbalances," European Affairs, a publication of the European Institute, Vol. 6 No. 4, 31 December 2005, at http://www.imf.org/external/np/vc/2005/123105a.htm.

 

52. Benn Steil and Robert E. Litan, Financial Statecraft. London and New Haven, CT: Yale University Press, 2006, at p. 98.

 

53. See "Exchange Stabilization Fund," at the website of the United States Treasury, at http://www.ustreas.gov/offices/international-affairs/esf/reserve.shtml. This fund was used, for example, to support the peso during the Mexican currency crisis which began in 1994.

 

54. Kenneth Kasa, "Learning, Large Deviations, and Recurrent Currency Crises," February 2004, International Economic Review , pp. 141-73 at p. 141.

 

55. Benn Steil and Robert E. Litan, Financial Statecraft. London and New Haven, CT: Yale University Press, 2006, at p. 99 and pp. 110-11.

 

56. United States Treasury Press Release, "Statement by United States Treasury Secretary John W. Snow following the Meeting of the G7 Finance Ministers and Central Bank Governors," 3 December 2005, at http://www.treas.gov/press/releases/js3034.htm.

 

57. Jane Macartney in Beijing and Gary Duncan, "China Expected to Overtake US within Three Decades." The Times, London, 21 December 2005, at http://business.timesonline.co.uk/article/0,,13132-1948456,00.html.

 

58. Junning Cai, "Currency Manipulation versus Current Account Manipulation," October 2005, at http://econwpa.wustl.edu:8089/eps/if/papers/0510/0510023.pdf.

 

59. Tim Adams, "Working with the IMF to Strengthen Exchange Rate Surveillance," speech to a seminar at the American Enterprise Institute, 2 February 2006, at http://www.treas.gov/press/releases/js4002.htm.

 

60. Ronald McKinnon, "China’s Exchange Rate Trap: Japan Redux?" presented at American Economic Association meetings, Boston, MA, 7 January 2006, at http://www.aeaweb.org/annual_mtg_papers/2006/0107_1015_1302.pdf

 

61. Jonathan Feurbringer, "Japan Is Spending Heavily to Pursue a Weak-Yen Policy," The New York Times, 27 August 2003, p. B1.

 

62. Paul R. LaMonica, "Fed Raises Rates Again," CNN Money.com, 13 December 2005, at http://money.cnn.com/2005/12/13/news/economy/fed_rates/, and

Associated Press, "FEDERAL RESERVE: More emphasis on short-term in decisions on interest rates," Chicago Tribune , 22 February 2006, at http://www.chicagotribune.com/business/chi-0602220121feb22,1,1120668.story?coll=chi-business-hed

 

63. Robert A. Mundell, "The Works of Robert A. Mundell–World Currency," at his website, at http://www.robertmundell.net/Menu/Main.asp?Type=5&Cat;=09&ThemeName;=World percent20Currency.

 

64. Andrew K. Rose, "EMU and Swedish Trade," 2001, Confederation

of Swedish Enterprise, at http://faculty.haas.berkeley.edu/arose/SEMUdec.pdf.

 

65. "Universal Declaration of Human Rights," United Nations, Adopted and proclaimed by General Assembly Resolution 217 A (III) of 10 December 1948, at http://www.un.org/Overview/rights.html.

 

66. Jose Luis Cordeiro, "Different Monetary Systems, Costs and Benefits to Whom?" November 2002, p. 3, at http://www.redeconomia.org.ve/seminarios/cordeiro.pdf.

 

67. "Zimbabwe: It’s Still Not Enough To Buy A Beer," The New York Times, 3 February 2006, p. A8.

 

68. "IMF Executive Board Upholds Sanctions Against Zimbabwe," Press Release, International Monetary Fund, 8 March 2006, at http://www.imf.org/external/np/sec/pr/2006/pr0645.htm.

 

69. Basil Moore, Shaking the Invisible Hand: Complexity, Endogenous Money and Exogenous Interest Rates. London, UK: Palgrave MacMillan, 2006, p. 2 of Chapter 18.

 

70. Basil Moore, ibid., p. 2 of Chapter 18.

 

71. "US Retains Working Control of Internet," 16 November 2005, The New York Times, p. C2.

 

72. Michael Emerson, Daniel Gros, Alexander Italiener, Jean Pisani-Ferry, Horst Reichenbach, One Market, One Money – An Evaluation of the Potential Benefits and Costs of Forming an Economic and Monetary Union. Oxford, UK: Oxford University Press, 1992, p. 25.

 

73. Michael Emerson, and others, ibid., p. 9.

 

74. Peter Singer, One World. London and New Haven, CT: Yale University Press, 2002, at p. 13.

 

75. International Accounting Standards Board, website at http://www.iasb.org/.

 

76. Ratnam Alagiah, "A Single Global Currency and its Impact on Accounting," Working Paper, Griffith University, 2006. This paper addresses the issue of the implementation of a single global currency (SGC) by analysing the top 1000, of the Fortune 500 companies and the change in the reporting practices of multinational companies, given recent evidence that the capital market values foreign currency gains and losses.

 

77. See Worlds Apart , Princeton, NJ: by Branko Milanovic of the World Bank and the Carnegie Endowment for International Peace, Princeton University Press, 2005, and Peter Singer, One World , London and New Haven, CT: Yale University Press, 2002. Especially in Chapter 3, "One Economy," pp. 51-105.

 

78. Jens Martin, "A Compendium of Inequality," Global Policy Forum, October 2005, relying upon the 2005 United Nations Human Development Report , at http://www.globalpolicy.org/socecon/inequal/2005/10compendium.pdf.

 

79. United States Treasury, "Treasury International Capital System," at http://www.treas.gov/tic/forms.html

 

80. Paul Marriott, "Aussie Slides as Commodities Fall, USD rises," Reuters Finance News, Australia, 15 April 2005, cached version at http://64.233.179.104/search?q=cache:xLfaRQUAnNYJ:au.biz.yahoo.com/050415/19/43tz.html+ percent22aussie+slide percent22&hl;=en≷=us&ct;=clnk&cd;=8.

 

81. Bank of Canada, "10-Year Currency Converter," at http://www.bankofcanada.ca/en/rates/exchform.html.

 

82. "International Market Summary," Currency Trader magazine, Chicago, IL: January 2006, p. 40 and February 2006, p. 44, and March 2006, p. 36.

 

83. Joshua Krongold and Michael McDonald, "Dollar Has Biggest Weekly Decline in 3 Years Versus the Euro," Bloomberg.com, 7 January 2006, at http://www.bloomberg.com/apps/news?pid=10000087&sid;=ae7moluhCCbo&refer;=top_world_news#

 

84. Estimating the national wealth of the United States is a task subject to much definition. The $50 trillion estimate is used in the example because it’s a round number, and because that was the estimate given by Warren Buffett in his 26 October 2003 Fortune magazine article, "Why I’m Not Buying the US Dollar" at http://www.pbs.org/wsw/news/fortunearticle_20031026_03.html. Another estimate of $45 trillion comes from William B. Bonvillian’s fall 2004 article in Issues in Science and Technology Online , "Meeting the New Challenge to US Economic Competitiveness," at http://www.issues.org/issues/21.1/bonvillian.html. See also "Global Financial Stability Report," International Monetary Fund, Table 3 in Statistical Appendix, at p. 171, at http://www.imf.org/External/Pubs/FT/GFSR/2005/02/pdf/statappx.pdf

 

85. Lester Thurow, Fortune Favors the Bold. New York, NY: Harper Collins, 2003, p. 12, citing Guy de Jonquieres, "Companies ‘Bigger’ than Many Nations," Financial Times , 13 August 2002, p. 3.

 

86. J.W. Elphinstone, "Update 1: Number of Billionaires Up to Record 793," Forbes.com, 9 March 2006, at http://www.forbes.com/business/feeds/ap/2006/03/09/ap2584652.html, and "Rank Order–GDP by Official Exchange Rate: The World Factbook," United States Central Intelligence Agency, at http://www.cia.gov/cia/publications/factbook/rankorder/2195rank.html. The ten countries in descending order of GDP size are: Eritrea, Sierra Leone, Cape Verde, Belize, Guyana, Burundi, Seychelles, The Gambia, Comoros, and Guinea-Bissau.

 

87. "Rank Order–Population: The World Factbook," United States Central Intelligence Agency, at

http://www.cia.gov/cia/publications/factbook/rankorder/2119rank.html. See the list of ten countries above.

 

88. International Organization for Standards (ISO), "World Trade Report 2005 Highlights ISO’s Key Role," at http://www.iso.org/iso/en/commcentre/pressreleases/2005/Ref965.html.

 

89. "Introduction: The SNA as a System," United Nations Statistics Division, United Nations, at http://unstats.un.org/unsd/sna1993/tocLev8.asp?L1=1&L2;=1.

 

90. Ingemar Bengtsson in email to author, 27 June 2005.

 

91. A call to the office of Mr. Volcker in 2004 confirmed that he stands behind this statement, even if the exact quote does not have a definite initial attribution of publication. The statement, "A global economy requires a global currency" is similar to his statement in 2004 that "in a globalized world, we should have an international currency," as reported in "Calling for a Global Currency" by Joan Veon at http://worldnetdaily.com/news/article.asp?ARTICLE_ID=45085 on 1 July 2005. Similarly, on 31 January 2000, Volcker wrote the column , "Toward a Single World Currency to Level the Playing Field" in the International Herald Tribune where he stated, "…if we are to have a truly globalized economy, a single world currency makes sense," at http://www.iht.com/articles/2000/01/31/edpaul.2.t_0.php.

 

92. Willem Buiter, Richard Layard, Christopher Huhne, Will Hutton, Peter Kenen, and Adair Turner, with a foreword by Paul Volcker, "Why Britain Should Join the Euro," 1 August 2002, p. 8, at

http://cep.lse.ac.uk/layard/RL334D.pdf.

 

93. "Executive Summary," The Future of Money. Paris: Organization for Economic Co-Operation and Development, 2002, p. 7.

 

94. Marco Visscher, "Everyone Should Pay in Mondos," ODE Magazine, Netherlands, November 2005, an interview with Jose Cordeiro, an economist in Venezuela, at http://www.odemagazine.com/article.php?aID=4214.

 

95. See International Campaign to Ban Landmines, with headquarters in Belgium, at http://www.icbl.org/. The full name of the 1997 treaty is the " Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on Their Destruction."

 

96. See "Treaty on the Non-Proliferation of Nuclear Weapons," at http://www.un.org/Depts/dda/WMD/treaty/. As of 2002, 187 countries had signed that treaty.

 

97. Jerome Hericourt, "And If One Size Fits All, After All?–A Counterfactual Examination of the ECB–Monetary Policy under Duisenberg Presidency," November 2005 version, at http://ideas.repec.org/p/mse/wpsorb/bla04004a.html. The title functions as a response to a previous paper by Otmar Issing, "The Single Monetary Policy of the European Central Bank: One Size Fits All," International Finance , March 2001, at http://ideas.repec.org/a/bla/intfin/v4y2001i3p441-62.html and referenced by Issing in his May, 2004 lecture, " The ECB and the Euro – the First Five Years" at the City University Business School, London, at

http://www.ecb.int/press/key/date/2004/html/sp040512_1.en.html

 

98. Robert A. Mundell, "The Works of Robert A. Mundell–World Currency" at his website, op. cit.

 

99. See 1999 changes to 1999 Revenue Equalization Implementation Act, at http://www.sachsen-anhalt.de/LPSA/index.php?id=pgoqpyujbgr0.

100. "Newsmakers-Central Bankers in the News," a newsletter from Central Banking Publications, www.centralbanking.com. 10 January 2006. The referenced data came from the 2006 edition of the Morgan Stanley Central Bank Directory , which is compiled by Central Banking Publications.

 

101. The Book of Revelation in the Bible is cited thusly, "Setting The Stage for the Prophesied Global Currency and Economy–In Revelation 13:16-17, we see that the economy of the world must have become global, with unprecedented dictatorial control, and that the money must have become cashless. Listen to the prophecy. ‘And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads: And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name,’ " and "Bible scholars have long maintained that the only way in which verses 16-17 could be fulfilled was for three distinct events to have occurred…

1. The individual economies of the world had to have become global by this point in world history,…

2. The currency in this new global system had to have become global as well….

3. The currency had to have become cashless by this point in history…."

Cutting Edge Ministries, Lexington, South Carolina, at http://www.cuttingedge.org/news/n1169.cfm

 

102. "Perspective: One World, One Currency," One Country, the Online Newsletter of the Baha’i Community, Volume 10, Issue 4, January-March 1999, at http://www.onecountry.org/e104/e10402as.htm.

 

103. Melani McAlister, "An Empire of Their Own," in The Nation , 22 September 2003, at http://www.thenation.com/doc/20030922/mcalister. See also Craig Unger, "American Rapture," December, 2005, Vanity Fair , about the United States evangelical movement and politics in the United States, at http://www.vanityfair.com/commentary/content/printables/051128roco02?print=true/.

 

104. Curtis Sittenfeld, Prep. New York, NY: Random House, 2005, p. 400.

 

105. Steve Rhodes, review of "The Omega Code," 1999, at http://67.19.164.40/o/theomegacode/reviews/car.html.

 

106. See the money museum in Zurich, Switzerland, at http://www.moneymuseum.com/index_english.htmland the American Numismatic Association Money Museum, Colorado Springs, Colorado, United States, at http://www.money.org.

 

107. As my friends and relatives know, and sometimes to their consternation, I’ve been using this expression, H = E – R for about twenty years. I do not know its origin, and was surprised to see that there were only three Google "results" for the expression.

 

Chapter 6. Economists View the Single Global Currency

[1] . See, e.g., C. Fred Bergsten and the Institute for International Economics , The United States and the World Economy: Foreign Economic Policy for the Next Decade , Washington, DC: Institute for International Economics, 2005. The book’s final chapter, "The International Financial Architecture" by Morris Goldstein, makes no mention of the Single Global Currency nor Robert Mundell nor the euro nor monetary unions.

 

2. For more information about the Single Global Currency Journal , see http://www.singleglobalcurrency.org/journal.html

 

3. "Doctoral Dissertations in Economics, One-Hundred-Second Annual List," Journal of Economic Literature , American Economics Association, December 2005, Number 4, pp. 1196-99.

 

4. "Preliminary Announcement of the Program." Annual meeting of the American Economic Association, 6-8 January 2006, Boston, Massachusetts, at http://www.vanderbilt.edu/AEA/assa06.htm.

 

5. Hazel Yuen, "Globalization and Single Currency: The Prospects of Monetary Integration in East Asia," September 1999 ("Preliminary Draft") at http://econ.tu.ac.th/iccg/papers/hazel.doc.

 

6. Paul De Grauwe and Jacques Melitz, editors, Prospects for Monetary Unions after the Euro . Cambridge, MA: MIT Press, 2005.

 

7. Paul De Grauwe and Jacques Melitz, editors, ibid., p. 4.

 

8. Paul De Grauwe, Economics of Monetary Union . Oxford, UK: Oxford University Press, 2005, 6th edition, p. 1.

 

9. Paul De Grauwe and Jacques Melitz, editors, op. cit., p. 1.

 

10. Paul De Grauwe and Jacques Melitz, editors, ibid.

 

11. See the economists’ comments and ratings for the Utility and Feasibility of the Single Global Currency at http://www.singleglobalcurrency.org/economists_ratings_system.html

 

12. Martin Wolf, "We Need a Global Currency," Financial Times , 3 August 2004, at http://courses.wcupa.edu/rbove/eco338/040Trade-debt/Currency/040804global.txt.

 

13. Email from Professor Andrew Rose to the author, 15 August 2004.

 

14. Matt Polasek, Honorary Fellow, Flinders University, Adelaide, Australia, in email to the author, 11 November 2005.

 

15. Basil Moore, "Using a Common Currency in International Transactions: The Post Keynesian Case for No Exchange Rates," p. 8 of Chapter 19 of book, Shaking the Invisible Hand: Complexity, Endogenous Money and Exogenous Interest Rates . London, UK: Palgrave MacMillan, 2006.

 

16. Kenneth Rogoff, "On Why Not a Global Currency," 8 January 2001, presented to the American Economic Association Meeting on "Exchange Rates and Choice of Monetary Regimes," published in the American Economic Review , Vol. 91(2), 2001, pp. 243-47 and on the web at

http://www.economics.harvard.edu/~krogoff/AER-May01.pdf.

 

17. Ibid., at p. 6.

 

18. Ibid., at p. 9.

 

19. Paul Krugman, "Monomoney Mania," Slate Magazine , 16 April 1999, at http://www.slate.com/id/25210/.

 

20. In the tradition of polite expressions of disagreement, Professor Rogoff wrote to the author upon the establishment of the Single Global Currency Association, "Congratulations on your ambitious enterprise." Email, 28 July 2003.

 

21. See also, Maurice Obstfeld and Kenneth Rogoff, "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?" 2000. Posted at the eScholarship Repository, University of California, at http://repositories.cdlib.org/iber/cider/C00-112/.

 

22. Maurice Obstfeld and Kenneth Rogoff, "Do We Really Need a New Global Monetary Compact?" in Currency Unions , Edited by Alberto Alesina and Robert J. Barro. Stanford, CA: Hoover Institution Press, 2001, p. 81.

 

23. Deardorff’s Glossary of International Economics, at http://www-personal.umich.edu/~alandear/glossary/.

 

24. Richard Cooper, "Toward A Common Currency?" June 2000, p. 17, presented at the conference on the Future of Monetary Policy and Banking, organized by the IMF and the World Bank, at http://www.worldbank.org/research/interest/confs/upcoming/papersjuly11/cooper.pdf.

 

25. Benn Steil and Robert E. Litan, Financial Statecraft . London and New Haven, CT: Yale University Press, 2006, p. 104.

 

26. Graciella Kaminsky, Carmen Reinhart, and Carlos A. Vegh, "The Unholy Trinity of Financial Contagion," Journal of Economic Perspectives , 2003, v17(4, Fall), pp. 51-74. at http://www.nber.org/papers/W10061.

 

27. Benn Steil and Robert E. Litan, Financial Statecraft . London and New Haven, CT: Yale University Press, 2006, p. 108.

 

28. Ralph Bryant, Turbulent Waters–Cross Border Finance and International Governance. Washington, DC: Brookings Institution Press, 2003 at p. 414.

 

29. Edwin Truman, "The Evolution of the International Financial System," remarks at the Institute for International Monetary Affairs Eighth Symposium, Tokyo, 6 December 1999, at http://www.treas.gov/press/releases/ls276.htm

 

30. Milton Friedman and Robert Mundell, "One World, One Money? A Debate," Policy Options/Options Politiques (May): 10-30, as quoted in Benjamin J. Cohen, The Future of Money . Princeton, NJ: Princeton University Press, 2004, p. 214.

 

31. Robert Mundell, "A Theory of Optimum Currency Areas," American Economic Review , May 1961, pp. 657-65 at p. 663, and as Chapter 12 in his book, International Economics , pp. 177-86, at http://www.columbia.edu/~ram15/ie/ie-12.html.

 

32. Recognizing the vast amounts of money which might be generated, a loose worldwide network of Tobin Tax supporters (and spenders!) has arisen. See "Tobin Tax Initiative" at http://www.ceedweb.org/iirp/.

 

33. James Tobin, "A Proposal for Monetary Reform," Eastern Economic Journal , July/October 1978, pp. 153-59, at http://www.globalpolicy.org/socecon/glotax/currtax/original.htm.

 

34. Richard Cooper, "A Monetary System for the Future," Foreign Affairs , Fall 1984, pp. 182.

 

35. Richard Cooper, ibid., p. 184.

 

36. Richard Cooper, email to the author, 18 July 2003. The referenced article is in the July 2000 issue of International Finance , "Toward A Common Currency?" at pp. 287-308, at

http://www.ingentaconnect.com/content/bpl/infi/2000/00000003/00000002/art00053. The article is similar to his "Toward A Common Currency?" June 2000, presented at the conference on the Future of Monetary Policy and Banking, organized by the IMF and the World Bank, at http://www.worldbank.org/research/interest/confs/upcoming/papersjuly11/cooper.pdf.

 

37. Kenneth Rogoff, "On Why Not a Global Currency," 8 January 2001, presented to the American Economic Association Meeting on "Exchange Rates and Choice of Monetary Regimes," published in the American Economic Review , Vol. 91(2) pp. 1243-247 and on the web at

http://www.economics.harvard.edu/~krogoff/AER-May01.pdf.

 

38. I bid. The 1985 article he referenced was his "Can International Monetary Policy be Counterproductive?" in Journal of International Economics , May 1985, pp. 199-217.

 

39. Basil Moore, "Using a Common Currency in International Transactions: The Post Keynesian Case for No Exchange Rates," pp. 8-9 of Chapter 19 of book, Shaking the Invisible Hand: Complexity, Endogenous Money and Exogenous Interest Rates , London, UK: Palgrave MacMillan, 2006.

 

40. Fariborz Moshirian, "New International Financial Architecture," presented at First Single Global Currency Conference, Bretton Woods, July 2004 at http://www.singleglobalcurrency.org/documents/NewinternationalfinancialarchitecturebyFariborzMoshirian_doc. Also published in the Journal of Multinational Financial Management , October-December 2002, at http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VGV-460DNXY-2&_coverDate=12 percent2F31 percent2F2002&_alid=347596192&_rdoc=1&_fmt=&_orig=search&_qd=1&_cdi=6048&_sort=d&view;=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5;=12dab61202c69def4dee840d42880679.

 

41. Richard Cooper, "A Monetary System for the Future," Foreign Affairs , Fall 1984, pp. 166.

 

42. Annual Meeting, World Economic Forum, with contributors: Martin Feldstein, Jeffrey Frankel, Jacob Frenkel, Otmar Issing, Haruhiko Kuroda, Robert Mundell, Jean-Pierre Roth, and Federico Sturzenegger, "Does the Global Economy Need a Global Currency?" 26 January 2001, at http://72.14.203.104/search?q=cache:UlUyLeQ7qccJ:www.weforum.org/site/knowledgenavigator.nsf/Content/Does percent20the percent20Global percent20Economy percent20Need percent20a percent20Global percent20Currency percent3F_2001?open&topic;_id=+”Global+Pipe+Dream+”&hl;=en≷=us&ct;=clnk&cd;=3.

 

43. Volker Nitsch, "Have a Break, Have a . . . National Currency: When Do Monetary Unions Fall Apart?" Chapter 12, in Paul De Grauwe and Jacques Melitz, editors, Prospects for Monetary Unions after the Euro . Cambridge, MA: MIT Press, 2005.

 

44. Benjamin J. Cohen, The Future of Money . op.cit., p. 192. Note that Cohen observed that Mundell’s characterization of the number 1 was said in jest, at p. 213. See also, International Monetary Fund, IMF Survey , "Conference Examines US Economic Uncertainties, Exchange Rate Choices, and Globalization," 22 January 2001, p. 27, "Mundell recommended a move toward a single world currency area in the future; he said the optimum number of currencies for the world, like the optimum number of gods, ‘should be an odd number, preferably less than three.’ " At

http://www.imf.org/external/pubs/ft/survey/2001/012201.pdf.

 

45. Benjamin J. Cohen, The Future of Money , op.cit., p. 211.

 

46. Benjamin J. Cohen, The Future of Money , ibid., p. 214. I don’t know about references to currency and money in the classic utopian works, including Thomas More’s Utopia , (online at http://www.d-holliday.com/tmore/utopia.htm) but Edward Bellamy’s 1915 Looking Backward , presented a 2000 world "in which money was unknown and without conceivable use," Chapter 28, online at http://xroads.virginia.edu/~HYPER/BELLAMY/ch28.html.

  Myron Frankman wrote in 1990 "A Vision of the New Order," which was a look at the 1999 economy by a 1999 observer, who told of its "single world currency–not a centrally created reserve asset like the SDR, but a circulating currency which would replace all national monies," at The Trumpeter, Journal of Ecosophy , Volume 7.3, 1990, at http://trumpeter.athabascau.ca/content/v7.3/frankman.html.

 

47. This phrase comes from the oft-quoted statement from John Maynard Keynes, "In the long run we are all dead." Wikiquote gives context to his meaning: " The long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again." John Maynard Keynes, A Tract on Monetary Reform , 1923, Ch. 3.

  From Wikiquote comes this observation: "Many thought this meant Keynes supported short terms gains against long term economic performance. Keynes on the other hand wanted to criticize those who believed that inflation will control itself without government intervention," at http://en.wikiquote.org/wiki/John_Maynard_Keynes.

 

48. Martin Wolf, "We Need a Global Currency," Financial Times , 3 August 2004, at http://courses.wcupa.edu/rbove/eco338/040Trade-debt/Currency/040804global.txt.

 

49. As noted in Chapter 3, "original sin" refers to the practical requirement that when countries with risky or soft currencies borrow money internationally, that repayment be denominated in hard currencies such as the US dollar. "Liability dollarization" describes the status of having debt or liabilities denominated in those hard currencies. See Ricardo Hausmann and Ugo Panizza, "The Mystery of Original Sin," 16 July 2002, at http://ksghome.harvard.edu/~rhausma/paper/mistery_march3.pdf

 

50. Barry Eichengreen, Ricardo Hausmann, and Ugo Panizza, "The Mystery of Original Sin," August 2003 at http://emlab.berkeley.edu/users/eichengr/research/osmysteryaug21-03.pdf.

 

51. Morris Goldstein and Philip Turner, "Currency Mismatches at Center of Financial Crises in Emerging Economies," 22 April 2004, Institute for International Economics, Washington, DC, at

http://www.iie.com/publications/newsreleases/newsrelease.cfm?id=99.

 

52. The term "gung-ho" is slang in English for "enthusiastic," and also used as the title of a 1986 US movie directed by Ron Howard. See Wikipedia at http://en.wikipedia.org/wiki/Gung-ho.

 

53. Nouriel Roubini, "A Single Global Currency? Not Any Time Soon Nor in the Long Run in Which We Are All Dead." Blog at http://www.rgemonitor.com/blog/roubini/91155/.

 

54. Adam S. Posen, Editor, The Euro at Five: Ready for a Global Role? Washington, DC: 2005, Institute for International Economics, Chapter 8 by Ben S. Bernanke, "The Euro at Five: An Assessment," at p. 179.

 

55. Western Union internal memo, 1876, as quoted in "Some interesting and bad predictions, courtesy of Susan Nicholas…." at http://www.technofile.org/technofile/Quotes/famous.words.txt.

 

Chapter 7. How To Get There From Here

1. The title of this chapter is related to a favorite Maine joke, as related by Marshall Dodge in his routine, "Bert and I." When an out-of-stater asks for the way to Millinocket, the local Mainer attempts to respond with three sets of directions, but finally concludes, "Come to think of it, you can’t get there from here." Well, despite the reluctance of some, we will, of course, get to a Single Global Currency from here. See Marshall Dodge and Robert Bryan, Bert and I and other stories from Down East . Camden, ME: Down East Books, 1981, and listen to the selections, "Which Way to East Vassalboro?" and "Which Way to Millinocket?" on the CD, Bert & I/More Bert & I , Bluewater Books & Charts, Fort Lauderdale, FL. The chapter title also echoes the last sentence of the article "One World, One Money" in The Economist , 26 September 1998, "Fine, you say, but how would the world ever get from here to there?" Benn Steil and Robert E. Litan had a different twist with the response from the proverbial Irishman when asked for directions to Dublin, "Best not to start from here," in Financial Statecraft. London and New Haven, CT: Yale University Press, 2006, p. 104.

 

2. Cover Story, The Economist , "Get Ready for the Phoenix," 9 January 1988, pp. 9-10.

 

3. See the table of "Currencies by Country" at the Single Global Currency Association website at http://www.singleglobalcurrency.org/currencies_by_country.html

 

4. By 2190, the quintennial drop would be less than one, so the drop after that point is assumed as one every five years, bringing the single global currency by 2220. Call it 2224, the 280th anniversary of the Bretton Woods conference.

 

5. Bryan Taylor, "The Eurodollar," 1998, p. 5, at http://www.globalfinancialdata.com/articles/euro.htm.

 

6. Paul De Grauwe and Jacques Melitz, editors, Prospects for Monetary Unions after the Euro . Cambridge, MA: MIT Press, 2005, p. 2.

 

7. Robert E. Litan and Benn Steil, Financial Statecraft . London and New Haven, CT: Yale University Press, 2006, p. 143.

 

8. Robert Mundell, "Exchange Rates, Currency Areas and the International Financial Architecture," remarks delivered at an IMF panel, 22 September 2000, Prague, Czech Republic, at http://www.usagold.com/gildedopinion/mundellprague.html.

 

9. Robert Mundell, "The Case for a World Currency," Journal of Policy Modeling , June 2005, pp. 465-75, at p. 474, at http://www.sciencedirect.com/science/article/B6V82-4G5BF09-1/2/0a981dfd39b6bb0ab8800e29fb10f7b1.

 

10. C. Uday Bhaskar, "China’s GDP & Asian Strategic Matrix," India Economic Times , 3 January 2006, at http://economictimes.indiatimes.com/articleshow/1355922.cms.

 

11. Robert Guttmann, How Credit Money Shapes the Economy, The United States in a Global Economy . Armonk, NY: M. E. Sharpe, 1994, p. 431.

 

12. "Kyoto Protocol to the United Nations Framework Convention on Climate Change," at

http://unfccc.int/resource/docs/convkp/kpeng.html

 

13. Robert Mundell, "Currency Areas, Volatility and Intervention," Columbia University, Discussion Paper Series, Discussion Paper #0102-09, January 2002, p. 2, at http://www.columbia.edu/cu/economics/discpapr/DP0102-09.pdf.

 

14. See, for example, "Explaining Exchange Rate Dynamics–The Uncovered Equity Return Parity Condition" by Elizaveta Krylova, Lorenzo Cappiello, and Roberto A. De Santis. The abstract begins, "By employing Lucas’ (1982) model, this study proposes an arbitrage relationship-�the Uncovered Equity Return Parity (URP) condition-�to explain the dynamics of exchange rates," European Central Bank, Working Paper 529, September 2005, at http://www.ecb.int/pub/pdf/scpwps/ecbwp529.pdf.

 

15. See Egil Matsen and Ragnar Torvik, "Optional Dutch Disease," 27 April 2004, at http://www.svt.ntnu.no/iso/Ragnar.Torvik/emrtjderev2.pdf

 

16. See the list of 215 Economics Departments, Institutes and Research Centers in the World, for International Economics at the EDIRC database, maintained at the University of Connecticut at http://edirc.repec.org/.

 

17. Email, 6 July 2005, from the Single Global Currency Association to Martin Wolf, after receiving his earlier reply that implementation of the single global currency might be feasible in "Half a century, perhaps."   "Dear Mr. Wolf, Thanks very much. If you were to request in your column that the leaders of the world should begin planning for a single global currency by the year 2055, that would be very helpful. By setting a date, you would add a touch of reality to the prospects.
  "Then people could start to analyze the schedule, with such questions as, ‘What would the Global Central Bank look like, and by what date would it have to be established?’ and ‘What kind of reserves would be needed, if any?’ and even "What should be the name of the single global currency?’
  "It took about 30 years to plan and implement the euro."

 

18. "Mahathir Proposes a Single Global Currency," NikkeiNet, 9 June 2001, at http://www.nni.nikkei.co.jp/fr/nikkei/inasia/future/2001/2001news14.html

 

19. "IMF Executive Board Concludes Article IV Consultation with Germany," Public Information Notice No 06/04, 18 January 2006, at http://www.imf.org/external/np/sec/pn/2006/pn0604.htm. See also IMF Article IV of Agreement, at http://www.imf.org/external/pubs/ft/aa/aa04.htm.

 

20. "IMF Executive Board Concludes Article IV Consultation with Ecuador," Public Information Notice No 06/15, 9 February 2006, at

http://www.imf.org/external/np/sec/pn/2006/pn0615.htm

 

21. Alex Brummer, "Financial Notebook: Birth Rites," The Guardian , online, 11 January 1994, at http://www.guardian.co.uk/euro/story/0,11306,616489,00.html, according to timeline at http://politics.guardian.co.uk/euro/story/0,9061,617173,00.html.

 

22. Benjamin J. Cohen, The Future of Money . Princeton, NJ: Princeton University Press, p. 221.

 

23. Mark Leonard, Why Europe Will Run the 21st Century . London, UK: Fourth Estate, 2005.

 

24. Willem H. Buiter, "The EMU and the NAMU: What is the Case for North American Monetary Union?" op. cit., p. 286.

 

25. Robert E. Litan and Benn Steil, Financial Statecraft , op. cit., p. 156.

 

26. Simon Gray and Jacob Nell, A New Currency for Iraq . London, UK: Central Banking Publications, Ltd., 2005.

 

27. Ben Lyfield, "Launching a Palestinian Currency is No Small Change," Christian Science Monitor , 29 March 2000, at http://csmonitor.com/cgi-bin/durableRedirect.pl?/durable/2000/03/29/p6s1.htm. See also "Choosing an Exchange Rate Regime" in "West Bank and Gaza Economic Performance, Prospects, and Policies Achieving Prosperity and Confronting Demographic Challenges," by Rosa Valdivieso, Ulric Erickson von Allmen, Geoffrey Bannister, Hamid R. Davoodi, Felix Fischer, Eva Jenkner, and Mona Said, all of the International Monetary Fund, 2001, at http://www.imf.org/external/pubs/nft/2001/west/, and See "Setting the Stage for a National Currency in the West Bank and Gaza: The Choice of Exchange Rate Regime," by Samya Beidas and Magda Kandil, of the IMF, April 2005, Working Paper 05/70, at http://www.imf.org/external/pubs/ft/wp/2005/wp0570.pdf.

 

28. "Dollars for Peace: Monetary Foundation of the Two-State Solution," summarizing a speech by Sever Plocker, Economics Editor for Israel’s largest newspaper, Yedioth Ahronoth , at a Saban Policy Center Luncheon, 30 June 2005, Brookings Institution, at http://www.brookings.edu/fp/saban/events/20050630.htm.

 

29. John Edmunds and John Marthinsen, Wealth by Association–Global Prosperity Through Market Unification . Westport, CT: Praeger Publishers, 2003, p. 146.

 

30. Felix Hammermann and Rainer Schweickert, "EU Englargement and Institutional Development: How Far Away Are the EU’s Balkan and Black Sea Neighbors?" Kiel Institute for World Economics, Working Paper No. 1261, November 2005, at http://www.uni-kiel.de/ifw/pub/kap/2005/kap1261.pdf. See also, Piritta Sorsa, "Macroeconomic Challenges with EU Accession in Southeastern Europe: An Overview," IMF Working Paper 06/40, February 2006, at http://www.imf.org/external/pubs/ft/wp/2006/wp0640.pdf

 

31. Menzie Chinn and Jeffrey Frankel, "Will the Euro Eventually Surpass the Dollar as Leading International Reserve Currency?" National Bureau of Economic Research, 16 August 2005, at http://www.nber.org/papers/w11510.

 

32. See "One Dollar," Caribbean Broadcasting Corporation, 1 February 2006, at http://www.cbc.bb/content/view/3923/46/

 

33. Richard Cooper, "A Monetary System for the Future," Foreign Affairs , Fall 1984, pp. 184.

 

34. Robert Mundell, "Exchange Rates, Currency Areas and the International Financial Architecture," remarks delivered at an IMF panel on 22 September 2000 at Prague, at http://www.usagold.com/gildedopinion/mundellprague.html.

 

35. Robert A. Mundell, website, "World Currency" page, at http://www.robertmundell.net/Menu/Main.asp?Type=5&Cat;=09&ThemeName;=World percent20Currency.

 

36. Robert A. Mundell, website, "World Currency," ibid.

 

37. Robert A. Mundell, website, "World Currency," ibid.

 

38. Robert Mundell, "Exchange Rates, Currency Areas and the International Financial Architecture," op. cit.

 

39. Robert Mundell, "The case for a world currency," op cit, p. 472.

 

40. The term "free-rider fiscal policies" refers to the undeserved benefit for a member of a group who declines to contribute to a course of action, but benefits regardless. In the context of monetary union, Robert Mundell appeared to refer to countries which engage in reckless fiscal policy, but continue to use the currency of the monetary union which is made sound by the prudent fiscal policies of the other members. The EMU Growth and Stability Pact seeks to address this problem by preventing "free-riders."

 

41. Robert Mundell, ibid., p. 472-73.

 

42. Robert Mundell, ibid., p. 473-74.

 

43. Bryan Taylor, "The Eurodollar," 1998, at http://www.globalfinancialdata.com/articles/euro.htm.

 

44. The 19 days were: 2, 3, 29, 30 December 1999, 24, 25, 26 January and 23 February 2000 on the "down" journey and 25 July, 3 September, 1, 4, 5, 6, 21 and 22 November, and 3, 4, 5, December 2002 on the "up journey. Source: Bank of Canada online currency conversion utility at http://www.bankofcanada.ca/en/rates/exchform.html.

 

45. The raw data for the graph comes from the Bank of Canada’s "10-year Currency Converter," at http://www.bankofcanada.ca/en/rates/exchform.html, and the data is in a file at the Single Global Currency website, at this endnote, at http://www.singleglobalcurrency.org/book_notes.html.

 

46. Michael Emerson, Daniel Gros, Alexander Italiener, Jean Pisani-Ferry, and Horst Reichenbach, One Market, One Money–An Evaluation of the Potential Benefits and Costs of Forming an Economic and Monetary Union . Oxford, UK: Oxford University Press, 1992, p. 37.

 

47. C. Fred Bergsten, "The Euro and the Dollar: Toward a Finance G-2?" 26 February 2004, p. 9, at http://www.iie.com/publications/papers/bergsten0204-2.pdf . This paper later became a chapter in Adam S. Posen, editor, The Euro at Five: Ready for a Global Role? Washington, DC: Institute for International Economics, 2005.

 

48. Robert Mundell, "Currency Areas, Volatility and Intervention," Columbia University, Discussion Paper Series, Discussion Paper #: 0102-09, January 2002, p. 11, at http://www.columbia.edu/cu/economics/discpapr/DP0102-09.pdf.

49. "Total GDP, 2004"(by Country), World Bank at http://siteresources.worldbank.org/DATASTATISTICS/Resources/GDP.pdf.

 

50. The saying is, "Build it, and they will come." In the film, Field of Dreams , about a man’s love for the game of baseball, the "it" was a rural baseball stadium. See website of filming location, http://www.fieldofdreamsmoviesite.com/distance.html

 

51. Kenneth Rogoff, "On Why Not a Global Currency," 8 January 2001, presented to the American Economic Association Meeting on "Exchange Rates and Choice of Monetary Regimes," published in the American Economic Review , Vol. 91(2) pp. 1243-247 and on the web at

http://www.economics.harvard.edu/~krogoff/AER-May01.pdf.

 

52. Joseph Nye, "Europe’s Soft Power," in Globalist , 3 May 2004, at

http://www.globalpolicy.org/empire/analysis/2004/0503softpower.htm.

 

53. See Mark Leonard, Why Europe Will Run the 21st Century . London, UK: Fourth Estate, Ltd., 2005.

 

54. Charles Wyplosz, "An International Role for the Euro?" August 1997, p. 1, at http://hei.unige.ch/~wyplosz/ecmi.pdf, as quoted in Philipp Hartmann’s Currency Competition and Foreign Exchange Markets: The Dollar, the Yen, and the Euro . Cambridge, UK: Introduction, Cambridge University Press, 1998, p. 1.

 

55. Herbert Grubel, "The Merit of a North American Monetary Union," in The Dollarization Debate , edited by Dominick Salvatore, James W. Dean, and Thomas D. Willett. Oxford, UK: Oxford University Press, 2003, pp. 318-40, at p. 345.

 

56. Todd Sandler, Global Collective Action . Cambridge, UK: Cambridge University Press, 2004, p. 269.

 

57. Articles of Agreement, International Monetary Fund, Article XII–Organization and Management, Article XXVII–Amendments, and Schedule D–Council, all at http://www.imf.org/external/pubs/ft/aa/index.htm

 

58. Consumers International, London, at http://www.consumersinternational.org/Templates/Internal.asp?NodeID=89712&int1stParentNodeID;=89645&int2ndParentNodeID;=89645

 

59. International Standards Organization, Geneva, at http://www.iso.org/iso/en/ISOOnline.frontpage.

 

60. Carter Dougherty, "Spotlight: ‘Painless Doctor for German Economy,’" International Herald Tribune , 16 December 2005, at http://www.iht.com/articles/2005/12/16/business/wbspot17.php.

 

61. Andrew Rose, "What should Academics tell Policy-Makers about Monetary Union? Discussion of Coleman and Wyplosz," 28 July 2001, at http://faculty.haas.berkeley.edu/arose/RBADisc.pdf. Note that Rose has stated that he is not in favor of a single global currency, in an email to the author, 15 August 2004.

 

62. Letter from the Single Global Currency Association, 6 September 2003, at http://www.singleglobalcurrency.org/documents/OECDLetterassenttoOECDFinanceMinisters_doc.

 

63. California Public Employee Retirement System, at http://www.calpers.ca.gov/index.jsp?bc=/about/press/news/invest-corp/home.xml.

 

64. Guidliemo Carchedi, For Another Europe . London: Verso Publishers, 2001.

 

65. Text of 1 December 2003 speech by Mr. Ulrich Kohli, chief economist, Swiss National Bank, as posted on internet by "Swiss Plus," of the Swiss Bankers Association at http://www.swissplus.ch/newsletter-nov-2003?newsid=5531.

 

66. International Chamber of Commerce, Paris, at http://www.iccwbo.org/.

 

67. Brian Warburton, "The Case for a Single Global Currency," AmCham magazine, American Chamber of Commerce, Belgium, 1996, No. 514, p. 28.

 

68. Michael Carabott, "HSBC Announces Lm36.7 Pre-Tax profit," The Malta Independent Online , 17 February 2006, at http://217.145.4.56/ind/news.asp?newsitemid=28383.

 

69. Email to author from Jose Luis Cordeiro of Venezuela, 15 February 2006. Jose was an advisor to the Ecuadorian Chamber of Commerce at that time.

 

70. Maria Ahmed, "Free and Fair Trade–Noam Chomsky Sets Out His Vision of Fair Globalization in Conversation with Global Agenda’s Maria Ahmed," Global Agenda , World Economic Forum, 2005, at http://www.weforum.org/pdf/am_2006/chomsky_4.pdf.

 

71. See the 23 April 2004 testimony of Dr. Geoff Pain, to the Joint Standing Committee on Treaties at http://www.aph.gov.au/house/committee/jsct/usafta/subs/SUB162.pdf.

 

72. Dick Bryan, "Currency Unification: Dollarize or Die?" in Workers Online , 27 April 2001, at http://workers.labor.net.au/93/c_historicalfeature_dollar.html.

 

73. Philippe Van Parijs, "Does Basic Income Make Sense as a Worldwide Project?" at the IXth Congress of the Basic Income European Network, International Labour Organization, Geneva, 14 September 2002, at

http://www.etes.ucl.ac.be/bienbackup/conference2002/papers/vanparijsphilippe.doc.

 

74. Barbara Shailor, AFL-CIO, United States, "Internationalism for Working People," in the August 2003 OECD Observer at http://www.oecdobserver.org/news/fullstory.php/aid/893/Internationalism_for_working_people.html.

 

75. Bryan Taylor, "The Eurodollar," 1998, at http://www.globalfinancialdata.com/articles/euro.htm.

 

76. World Trade Organization, "Trade Growth in 2005 to Slow from Record 2004 pace," 27 October 2005, at http://www.wto.org/english/news_e/pres05_e/pr417_e.htm.

 

77. See, for the example of Japan, Toshiaki Watanabe and Kimie Harada, "Effects of the Bank of Japan’s Intervention on Yen/Dollar Exchange Rate Volatility," Journal of the Japanese and International Economies , March 2006, pp. 99-111, at http://www.sciencedirect.com/science/article/B6WMC-4DVBGXH-1/2/41970dd0a1129ac691062228b2d11e62. See also Michael Hutchison, "Is Official Foreign Exchange Intervention Effective?" FRBSF Economic Letter 2003-20, Federal Reserve Bank of San Francisco, at

http://www.frbsf.org/publications/economics/letter/2003/el2003-20.html.

 

78. Paul De Grauwe and Jacques Melitz, editors, Prospects for Monetary Unions after the Euro. Cambridge, MA: MIT Press, 2005, p. 2.

 

79. See Gazi Ercel’s article, in Turkish, "To Create a World Currency," at http://www.sabah.com.tr/2005/07/09/yaz1350-30-104.html .

 

80. While the quote is by Paul Volcker, and he stands by it, as confirmed in a telephone conversation with his assistant, there is no precise source for it. The closest was in his Op-Ed in the International Herald Tribune ,

on 31 August 2000, where he wrote, "In fact, if we are to have a truly globalized economy, a single world currency makes sense." (He also wrote, echoing the feasibility concerns of others, " That is not a world I will live to see, but the underlying tendencies are in that direction…."

The phrase, "a global economy requires a global currency," may also be derived from the pro-euro slogan of the 1990s, "One Market, One Money," which is also the title of the book by Michael Emerson, Daniel Gros, Alexander Italianer, Jean Pisani-Ferry, and Horst Reichenbach, about the 1990 European Council study of the single European currency, Oxford University Press, 1992.

 

81. Benjamin J. Cohen, The Future of Money . Princeton, NJ: Princeton University Press, 2004, p. 202.

 

82. ibid., p. 207.

 

83. Richard N. Cooper, "Almost a century of Central Bank Cooperation," BIS Working Papers, No. 198, February, 2006, at http://www.bis.org/publ/work198.pdf. See also Beth A. Simmons, "The Future of Central Bank Cooperation," BIS Working Papers, No. 200, February, 2006, at http://www.bis.org/publ/work200.pdf.

 

84. Kavaljit Singh, Taming Global Financial Flows . Hong Kong: Hong Kong University Press, 2000, p. 221.

 

85. Raymond Baker, Capitalism’s Achilles Heel: Dirty Money and How to Renew the Free-Market System . Hoboken, NJ: John Wiley & Sons, 2005.

 

86. Paul De Grauwe and Jacques Melitz, editors, Prospects for Monetary Unions after the Euro . Cambridge, MA: MIT Press, 2005, p. 1.

 

87. Ramon Tamames, "Monetary Simplification Euro/Dollar: Towards a Global Currency," November 2004, Instituto Europeo De Estudos Economicos, at http://esc.clubofrome.org/archive/articles/dl_tamames1.pdfand emails from the author to Rodrigo de Rato, 10 November 2005 and 22 March 2006, both at http://www.singleglobalcurrency.org/latest_news.html

88. See IMF press release, "Strengthening Our Commitment to Low-Income Countries," by Rodrigo de Rato, 30 November 2005, International Monetary Fund, at http://www.imf.org/external/np/vc/2005/113005.htm.

 

89. Letter from Zogby International to Single Global Currency Association, 16 December 2004, at http://www.singleglobalcurrency.org/news_prev.html.

 

90. "Predictions," Long Bets Foundation, at www.longbets.org.

 

91. "The Euro Has Landed," The Guardian online, 31 December 1998, at http://www.guardian.co.uk/euro/story/0,11306,616452,00.html

 

92. See the website of the Copenhagen Consensus Project at http://www.copenhagenconsensus.com/

 

93. Barry Eichengreen, "Financial Stability," a Copenhagen Consensus Challenge Paper, April 2004, at http://www.copenhagenconsensus.com/Default.aspx?ID=222. His summary of that same paper is also available at that linked location.

 

94. "Copenhagen Consensus: The Results," at http://www.copenhagenconsensus.com/ by clicking on "See Results."

 

95. Hugo Narrillos Roux, "Divisa Unica y Establidad Economica Mundial," translated as "Single Currency and Worldwide Economic Stability," April 2004, Ph.D. thesis in Spanish, with abstract in English, at

http://www.singleglobalcurrency.org/academics_and_economists.html.

 

96. ECB Staff team led by Peter Backe and Christian Thimann and including Olga Arratibel, Oscar Calvo-Gonzalez, Arnaud Mehl, and Caroline Nerlich, "The Acceding Countries’ Strategies towards ERM II and the Adoption of the Euro: An Analytical Review," February 2004, at

http://www.ecb.int/pub/pdf/scpops/ecbocp10.pdf.

 

97. Showing how sensitive the naming and spelling of the currency can be, Latvia seeks to spell "euro" as "eiro" in its alphabetical/phonetic usage, and the European Central Bank is opposed to any spelling other than "euro." The only exception, thus far, is that the Greeks are spelling it differently because Greece uses a different alphabet. The issue will likely be decided in the European Court of Justice. See, "Latvia Prepared to Fight Spelling of ‘Eiro’ in Court." http://euobserver.com/9/20623. Malta joined the Latvians and thereafter, Hungary, Slovenia, and Lithuania joined, too. See "More Dissenters Join the Ranks in Euro Spelling Controversy," in the Malta Independent , 10 January 2006, at http://217.145.4.56/ind/news.asp?newsitemid=26506.

 

98. John Edmunds and John Marthinsen, Wealth by Association, Global Prosperity through Market Unification. Wesport, CT: Praeger Publishers, 2003, p. 34.

 

99. European Central Bank, "Cash Changeover," at http://www.ecb.int/bc/history/changeover/html/index.en.html.

 

100. Paul De Grauwe, Economics of Monetary Union . Oxford, UK: Oxford University Press, 2005, 6th edition, p. 70.

 

101. ibid., p. 71.

 

102. Joaquin Almunia, "Seven Years of the Euro: Main Lessons and Future Challenges" at the EMU Governance and Euro Changeover Conference," Ljubljana, Slovenia, 17 March 2006, at http://europa.eu.int/rapid/pressReleasesAction.do?reference=SPEECH/06/177&format;=HTML&aged;=0&language;=EN&guiLanguage;=en

 

103. James Gomez, "East Europeans Cool to Euro as Governments Prepare for Currency," Bloomberg.com, 3 January 2006 at http://www.bloomberg.com/apps/news?pid=71000001&refer;=europe&sid;=aRMXyySy4gE4 .

 

104. The "21st Century" is another example of a globalized standard, which came from the European/Christian timekeeping system which ostensibly begins with the birth of Jesus Christ. It’s now commonly believed that he actually was born several years before the date considered to be the first day, A.D.

  1 January 2006 in the Christian/Gregorian calendar was 8 Kislev 5766 by Hebrew calendar, 8 Dhu I-Qa`da 1426 by Islamic calendar, 18 Azar 1384 by Persian calendar, and 18 Agrahayana 1927 by Indian Civil calendar. (See Index Librorum Liberorum, at Fourmilab, at http://www.fourmilab.to/documents/calendar/.

 

105. Robert Mundell, "The Case for a World Currency," op cit., p. 475.

 

106. Andres Arias, Gary D. Hansen, and Lee E. Ohanian, "Why have Business Cycle Fluctuations Become Less Volatile?" NBER Working Paper No. 12079, March 2006, National Bureau of Economic Research, Cambridge, MA, at http://papers.nber.org/papers/W12079.

 

107. Peter M. Summers, "What Caused The Great Moderation? Some Cross-Country Evidence," 3rd Quarter 2005, Economic Review , pp. 3-32, at http://www.kc.frb.org/publicat/econrev/PDF/3q05summ.pdf

 

108. Anup Shah, "Causes of Poverty: Poverty Facts and Stats," at http://www.globalissues.org/TradeRelated/Facts.asp.

 

109. "US International Reserve Position," US Treasury, 11 January 2006 weekly report, at http://www.treas.gov/press/releases/20061119281827487.htm.

 

110. Promotional Materials, Branko Milanovic, Worlds Apart: Measuring International and Global Inequality . Princeton, NJ: Princeton University Press, 2005, at http://www.pupress.princeton.edu/titles/7946.html.

 

111. See Bill Bonner and Addison Wiggin, Empire of Debt . Hoboken, NJ: John Wiley & Sons, 2006.

 

112. J. Bradford DeLong, "Estimating World GDP, One Million B.C. to the Present," at http://www.j-bradford-delong.net/and Ralph Zuljan, "Allied and Axis GDP," at http://www.onwar.com/articles/0302.htm. Both indices are expressed in 1990 dollars.

  The 1944 percentage is calculated from the nominal $219 billion US GDP (from Louis D. Johnston and Samuel H. Williamson, "The Annual Real and Nominal GDP for the United States, 1790–Present." Economic History Services, October 2005, URL : http://www.eh.net/hmit/gdp/ ) and Bradford Delong’s estimates of World GDP at approximately $1.5 trillion using table at http://econ161.berkeley.edu/TCEH/1998_Draft/World_GDP/Estimating_World_GDP.html  

  From a third source comes the calculation of 35 percent, in the article " The Trajectory of the United States in the World-System: A Quantitative Reflection," by Chris Chase-Dunn, Rebecca Giem, Andrew Jorgenson, Thomas Reifer, John Rogers, and Shoon Lio at University of California Riverside, 2002, p. 13, at http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1003&context;=irows.

 

113. Richard Cooper, "A Monetary System for the Future," Foreign Affairs , Fall 1984, pp. 175. See also, Richard Cooper, "Toward a Common Currency," June 2000, at http://www.worldbank.org/research/interest/confs/upcoming/papersjuly11/cooper.pdf.

 

114. US GDP forecast from the Financial Forecast Center website at http://www.forecasts.org/gdp.htm.

 

115. Other parts of Cooper’s article were remarkable prescient. Richard Cooper, "A Monetary System for the Future," Foreign Affairs , Fall 1984. He wrote, "The world will be very electronic," at p. 176, and "English will become even more widespread as the language of commerce," at p. 177. Also, he foresaw online purchasing, albeit through a television rather than a computer screen.

 

116. See Norman Kurland’s summary of the Kelsonian binary economics perspective in "A New Look at Prices and Money: The Kelsonian Binary Model for Achieving Rapid Growth Without Inflation," at http://www.cesj.org/binaryeconomics/price-money.html.

 

117 . The original slogan was, "Whatever Your Cause, It’s a Lost Cause Until We Control Population Growth."

 

118. Lester Thurow, Fortune Favors the Bold. New York, NY: HarperCollins, 2003.

 

Chapter 8. The Single Global Currency World-in 2024?

 

1. Richard Cooper, "A Monetary System for the Future," Foreign Affairs , Fall, 1984, p. 177.

 

2. Richard Cooper, "A Monetary System for the Future," ibid., p. 178.

 

3. International Monetary Fund, "IMF Executive Directors and Voting Power" at http://www.imf.org/external/np/sec/memdir/eds.htm.

 

4. Agnes Benassy-Quere and Edouard Turkisch, "ECB Governance in an Enlarged Eurozone," CEPII Working Paper No 2005-20, Paris, at http://www.cepii.fr/anglaisgraph/workpap/pdf/2005/wp05-20.pdf

 

5. Tonny Lybek and JoAnne Morris, "Central Bank Governance: A Survey of Boards and Management," IMF Working Paper, WP/04/226, at http://www.imf.org/external/pubs/ft/wp/2004/wp04226.pdf.

 

6. Jeffrey A. Garten, "Needed: A Fed for the World," Op-Ed, The New York Times , 23 September 1998.

 

7. Richard Cooper, "A Monetary System for the Future," Foreign Affairs , Fall, 1984, p. 178.

 

8. Petra Geraats, "Why Adopt Transparency? The Publication of Central Bank Forecasts," Working Paper 41, January 2001, European Central Bank, at http://www.ecb.int/pub/pdf/scpwps/ecbwp041.pdf. For a sample "Minutes of the Federal Open Market Committee" of the US Federal Reserve, see the 31 January report at http://www.federalreserve.gov/fomc/minutes/20060131.htm.

 

9. Petra Geraats, "Political Pressures and Monetary Mystique," November, 2005, at http://www.econ.cam.ac.uk/dae/repec/cam/pdf/cwpe0557.pdf. See also her analysis of the theory and practice of transparency in central bank operations, "Transparency of Monetary Policy: Theory and Practice," Center for Economic Studies, Munich, Working Paper No. 1597, November, 2005, at http://www.econ.cam.ac.uk/faculty/geraats/tpmptp.pdf

 

10. Anne C. Sibert, "Is Central Bank Transparency Desirable?" 14 December 2005, presented at the annual meeting of the American Economics Association, Boston, MA, 6-8 January 2006, at http://www.aeaweb.org/annual_mtg_papers/2006/0107_1015_0902.pdf

 

11. Alex Cukierman, "The Limits of Transparency," 25 December 2005, presented at the annual meeting of the American Economics Association, Boston, MA, 6-8 January 2006, at http://www.aeaweb.org/annual_mtg_papers/2006/0107_1015_0903.pdf

 

12. Michael Ehrmann and Marcel Fratzscher, "How Should Central Banks Communicate?" European Central Bank Working Paper Series, No. 557, November 2005, at http://www.aeaweb.org/annual_mtg_papers/2006/0107_1015_0904.pdf and at http://www.ecb.int/pub/pdf/scpwps/ecbwp557.pdf.

 

13. For an analysis of how national central banks have spent their seigniorage revenue, see Alain Ize, "Spending Seigniorage: Do Central Banks Have a Governance Problem?" IMF Working Paper 06/58, International Monetary Fund, March 2006, at http://www.imf.org/external/pubs/ft/wp/2006/wp0658.pdf.

 

14. The EMU Growth and Stability Pact is composed of a number of documents, beginning with the Maastricht Treaty and then European Council Resolutions and regulations in 1997, 1998 and 2005. See "Council Regulation on Speeding Up and Clarifying the Implementation of the Excessive Deficit Procedure," EC No. 1467/97, 7 July 1997, at http://www.eurotreaties.com/exdeficit.pdf.

 

15. "EU ministers Tell Britain to Cut Budget Deficit," Reuters, 24 January 2006, at http://today.reuters.co.uk/news/newsArticle.aspx?type=worldNews&storyID;=2006-01-24T110431Z_01_L24304594_RTRUKOC_0_UK-ECONOMY-EU-BRITAIN.xml&archived;=False.

 

16. See Michele Chang, "Reforming the Stability and Growth Pact: Size and Influence in EMU Policymaking," European Integration , March 2006, pp. 107-20, for purchase at http://journalsonline.tandf.co.uk/(h1ullo55zel4sze25bxro5m1)/app/home/contribution.asp?referrer=parent&backto;=issue,8,8;journal,1,17;linkingpublicationresults,1:300255,1

 

17. "Exhibit 4.1 Debt-to-GDP Levels for EU Nations: 1997" in John Edmunds and John Marthinsen, Wealth by Association–Global Prosperity Through Market Unification . Westport, CT: Praeger Publishers, 2003, p. 52.

 

18. Joanna Chung, "Eurozone Bond Yields Diverge," MSNBC, 15 February 2006, at http://msnbc.msn.com/id/11370951/

 

19. J. Bradford DeLong, "Free Riders in the Eurozone, 4 March 2006, The Korea Herald , at http://www.koreaherald.co.kr/SITE/data/html_dir/2006/03/04/200603040018.asp.

 

20. Roger Cohen, "Kicking the Euro When Europe is Down," The New York Times , 19 June 2005, at

http://www.nytimes.com/2005/06/19/weekinreview/19cohen.html?ex=1276833600&en;=18a322c966947096&ei;=5090&partner;=rssuserland&emc;=rss.

 

21. Volker Nitsch, "Have a Break, Have a . . . National Currency: When Do Monetary Unions Fall Apart," Chapter 12, in Paul De Grauwe and Jacques Melitz, editors, Prospects for Monetary Unions after the Euro . Cambridge, MA: MIT Press, 2005.

 

22. William Fuchs and Francesco Lippi, "Monetary union with voluntary participation," Bank of Italy Working Papers No. 512, July 2004, at http://www.bancaditalia.it/ricerca/consultazioni/temidi/td04/td512/en_tema_512.pdf.

 

23. "Europa" was the name proposed in 1975 by Giorgio Basevi and others for a parallel European currency. The proposal was summarized in The Economist , 1 November 1975, as, "The All Saints’ Day Manifesto for European Monetary Union." See Giorgio Basevi, Lorenzo Pecchi, and Gustavo Piga, "Parallel Monies, Parallel Debt: Lessons from the EMU and Options for the New EU," Tor Vergata University Research Paper Series, Working Paper No. 68, January, 2005, at ftp://www.ceistorvergata.it/repec/rpaper/No-68-Basevi-Pecchi-Piga.pdf.

 

24. Charles Goldfinger, "Intangible Economy and Electronic Money," Chapter 4 of The Future of Money , OECD, op cit. In chapter 4, see sub-chapter 4 at p. 111, "Core Alternatives for Future Money Landscape" and at p. 113, sub-chapter "Single Global Currency: the Geo," undated, at http://www.gefma.com/Articles/OECD%20Money%20and%20economy.htm#_Toc518469695.

 

25. See Single Global Currency Association website, "Feedback on SGC Names" at http://www.singleglobalcurrency.org/feedback_names.html.

 

26. Benjamin J. Cohen, The Future of Money , Princeton, NJ: Princeton University Press, 2004, p. 180.

 

27. Canadian Tire ‘Money’TM, "Canada’s Pioneer Customer Reward Program," at http://www2.canadiantire.ca/CTenglish/ctmoney.html.

 

28. Loren Steffy, "Frequent flier programs a bright spot amid gloom," 25 January 2005, Houston Chronicle , at http://www.chron.com/cs/CDA/printstory.mpl/business/steffy/3009675, and Mark Tarses, "Spending Your Frequent Flier Miles," Mark’s Market Remarks , March 2005, at http://www.sunwayco.com/market.html.

 

29. Local Exchange Trading Systems, LETS, at http://www.transaction.net/money/lets/.

 

30. See the Ithaca Hours website at http://www.ithacahours.com/. Its currency has now issued smaller denomination notes such as "1/8th Hour."

 

31. See Emily Lambert, "Funny Money," Forbes Magazine, 14 February 2006, at http://www.forbes.com/2006/02/11/local-currencies-ithaca_cz_el_money06_0214local_print.html

 

32. Sam Y. Cross, All About The Foreign Exchange Market in the United States . New York, NY: Federal Reserve Bank of New York, 1998, p. 3.

 

33. 75th Annual Report , Bank for International Settlements, p. 81, at

http://www.bis.org/publ/annualreport.htm.

 

34. Marion Williams, Governor, Central Bank of Barbados, "Foreign Exchange Reserves: How Much Is Enough?" remarks delivered at the 20th Adlith Brown Memorial Lecture at the Central Bank of the Bahamas, 2 November 2005, at http://www.centralbank.org.bb/Publications/Adlith_Brown_Lec.pdf .

 

35. Juan Luis Moreno-Villalaz, "Lessons from the Monetary Experience of Panama: A Dollar Economy with Financial Integration," Cato Journal , Cato Institute, Winter 1999, at

http://www.cato.org/pubs/journal/cj18n3/cj18n3-12.pdf.

 

36. John Maynard Keynes, wrote "In truth, the gold standard is already a barbarous relic." in Monetary Reform, 1924, at p. 187. Note that this phrase is often mis-quoted as referring to the metal gold rather than to the gold standard, to which the value of money can be fixed.

 

37. Natalia Chernyshoff, David Jacks, and Alan Taylor, "Stuck on Gold: Real Exchange Rate Volatility and the Rise and Fall of the Gold Standard," National Bureau of Economic Research, Working Paper No. 11795, November 2005 at http://papers.nber.org/papers/W11795.

 

38. Frank Fabozzi, Editor, Professional Perspectives on Fixed Income Portfolio Management. Hoboken, NJ: John Wiley & Sons, 2002.

 

39. Philip Arestis, Santonou Basu, "Financial Globalization: Some Conceptual Problems," Levy Economics Institute Working Paper 397, December, 2003, at http://econwpa.wustl.edu:8089/eps/it/papers/0301/0301002.pdf

 

40. John H. Rogers, "Monetary Union, Price Level Convergence, and Inflation: How Close is Europe to the United States?" October 2002. Board of Governors of the Federal Reserve System, International Finance Discussion Paper 740, at http://www.federalreserve.gov/pubs/ifdp/2002/740/default.htm. For the case of US and Canadian prices, see Charles Engel and John H. Rogers, "How Wide Is the Border?" American Economic Review , vol. 80, 1996, pp. 1112-25.

 

41. Kenneth Froot, Michael Kim, and Kenneth Rogoff, "The Law of One Price over 700 Years," IMF Working Paper 174, 2001, International Monetary Fund, Washington, DC, at http://www.imf.org/external/pubs/ft/wp/2001/wp01174.pdf.

 

42. Ben S. Bernanke, "Deflation: Making Sure ‘It’ Doesn’t Happen Here," speech before National Economists Club, Washington, DC, November, 2002, at http://www.federalreserve.gov/boarddocs/speeches/2002/20021121/default.htm.

 

43. Thomas Paine, Common Sense, Rights of Man, and Other Essential Writings of Thomas Paine , New York, NY: New American Library, 2003, p. 3, Introduction.

 

44. I. Angeloni, L. Aucremanne, and M. Ciccarelli, "Price setting and inflation persistence: did EMU matter?" May 2005, at http://www.ecb.int/events/pdf/conferences/emu/sessionV_Angeloni_Paper.pdf.

 

45. See Pietro Catte and Torsten Slok, "Assessing the value of indicators of underlying inflation for monetary policy," OECD Economics Dept. Working Paper No. 461, 25 November 2005, at http://www.olis.oecd.org/olis/2005doc.nsf/linkto/ECO-WKP(2005)48. See also, Robert Rich and Charles Steindel, "A Review of Core Inflation and an Evaluation of Its Measures," Staff Report No. 236, December 2005, at http://www.ny.frb.org/research/staff_reports/sr236.pdf.

 

46. "Target Practice for Turkey," in "NEWSMAKERS–CENTRAL BANKERS IN THE NEWS," by Central Banking Publications, 14 December 2005, at www.centralbanking.co.uk.

 

47. John Edmunds and John Marthinsen, Wealth by Association–Global Prosperity Through Market Unification . Westport, CT: Praeger Publishers, 2003, p. 118.

 

48. Lester Thurow, Fortune Favors the Bold . New York, NY: Harper Collins, 2003, p. 48.

 

49. Ben S. Bernanke, "Deflation: Making Sure ‘It’ Doesn’t Happen Here," op. cit.

 

50. Benn Steil and Robert E. Litan, Financial Statecraft . London, UK, and New Haven, CT: Yale University Press, 2006, p. 127.

 

51. Marco Visscher, "Everyone Should Pay in Mondos," ODE Magazine, Netherlands, November, 2005, an interview with Jose Cordeiro, an economist in Venezuela, at http://www.odemagazine.com/article.php?aID=4214.

 

52. Thomas Friedman, The World is Flat. New York, NY: Farrar, Straus and Giroux, 2006.

 

53. Thomas L. Friedman, The World is Flat , ibid. See Chapter 6, "The Dell Theory of Conflict Prevention," pp. 414-38.

 

54. Hemangini Gupta, "Humble Jutti Bonds Two Punjabs," 20 January 2006, CNN-IBN, Uttar Pradesh, India, at http://www.ibnlive.com/article.php?id=3974§ion;_id=3.

 

Chapter 9. Conclusion

 

1. Anne O. Krueger, Deputy Managing Director, IMF, "At the Service of the Nations: The Role of the IMF in the Modern Global Economy," speech before the 18th Australasian Finance and Banking Conference, 16 December 2005, at http://www.imf.org/external/np/speeches/2005/121605.htm.

 

2. Robert Mundell, "The Case for a World Currency," Journal of Policy Modeling , June 2005, pp. 465-75, at p. 465, at http://www.sciencedirect.com/science/article/B6V82-4G5BF09-1/2/0a981dfd39b6bb0ab8800e29fb10f7b1.

 

3. Willem H. Buiter, "The EMU and the NAMU: What is the Case for North American Monetary Union?" Canadian Public Policy , pp. 285-96, at p. 288, at http://qed.econ.queensu.ca/pub/cpp/sept1999/Buiter.pdf.

 

4. For a sample of software for automating aspects of barter transactions, see the "Ozone" software by XO Limited, from New Zealand, at http://www.barter-software.com/ .

 

5. International Monetary Fund, IMF Survey , "Mundell Calls for a Closer Monetary Union as Step Toward Single World Currency," 5 March 2001, p. 76, at http://www.imf.org/external/pubs/ft/survey/2001/030501.pdf.

 

6. Plato, "Allegory of the Cave," The Republic , translated by Benjamin Jowett at http://www.wsu.edu:8080/~wldciv/world_civ_reader/world_civ_reader_1/plato.html.

 

7. Ralph C. Bryant, Turbulent Waters–Cross-Border Finance and International Governance . Washington, DC: Brookings Institution Press, 2003, p. 415.

 

Appendix A. The Single Global Currency Association

1. Information about the Centre Jouffroy was obtained in 2003 from its website, www.centre-jouffroy.com, which later became inaccessible and began responding with "site en developpement," in 2005. Efforts to reach the centre by email have failed.

 

2. Greenpeace International is based in Amsterdam, with website at http://www.greenpeace.org/international/.

 

3. Transparency International is based in Berlin, with website at http://www.transparency.org/.

 

4. Founded by attorneys Peter Neufeld and Barry Scheck and based in New York City, the Innocence Project chose a precise strategy to challenge wrongful convictions in the US of innocent people–focus only on cases where exculpatory DNA is available. This strategy is slowly forcing the US legal system to confront its wrongful convictions of hundreds of innocent people. See http://www.innocenceproject.org.

 

5. International Campaign to Ban Landmines is based in Belgium, with website at http://www.icbl.org/. The full name of the 1997 treaty is the " Convention on the Prohibition of the Use, Stockpiling, Production, and Transfer of Anti-Personnel Mines and on Their Destruction." Currently, 154 countries have signed it, and 148 of those have ratified the treaty.

 

6. Zogby International is based in Utica, New York, with website at http://www.zogby.com/.

 

Appendix B. What Citizens Of The World Can Do

 

1. I had the privilege of being a student in a large, introductory anthropology class taught by Margaret Mead. The force of her personality, and the memory of her swaggering with her walking stick to the podium makes her quoted statement the more powerful for me. This exact quote from Margaret Mead generated 28,300 "results" in a Google search. With the word "people" substituted for "citizens," there were another 848 results. However, the citation is unknown for the original quote, now trademarked by the intellectual caretaker for Mead’s work, the New York-based, Institute for Intercultural Studies, Inc. From the Institute came this email about the source of the quote:

  "The Institute has received many inquiries about this famous admonition by Margaret Mead, which has become a motto for many organizations and movements. However, we have been unable to locate when and where it was first cited. We believe it probably came into circulation through a newspaper report of something said spontaneously and informally. We know that it was firmly rooted in her professional work, and that it reflected a conviction that she expressed often, in different contexts and phrasings. This quote is now trademarked, and the trademark is held by the Institute for Intercultural Studies.

We appreciate hearing about members of your family having been students of Dr. Mead, and appreciate your question concerning this most famous quote attributed to her.

Sincerely yours,

Betty Howe

Administrative Assistant

Institute for Intercultural Studies, Inc.

67A East 77th Street, New York, NY 10021"

 

2. Saul D. Alinsky, Rules for Radicals: A Pragmatic Primer for Realistic Radicals . New York, NY: Vintage Books, 1971, revised edition, 1989. One memorable demonstration of those rules came when a neighborhood group in Chicago, in opposition to the expansion of an airport, made its voice heard when members engaged in a sit in/sit down in all the toilets in all the restrooms available to the public at that airport. While it caused discomfort to some, the authorities responded affirmatively to the group’s grievances.

 

3. This a reference to Howard Beale’s (played by Peter Finch) speech as a newscaster in the movie Network , where he urged viewers "get up right now and go to the window, open it, and stick your head out and yell, ‘I’m mad as hell, and I’m not going to take this anymore!’" at http://www.americanrhetoric.com/MovieSpeeches/moviespeechnetwork2.html.

Appendix C. Author’s Afterword

1. The idea of a single global currency is elegantly simple and many people around the world have surely already thought of it, independently from economists and science fiction writers. In fall 2005, the labor union, Service Employees International Union, in the United States launched a website, www.sinceslicedbread.com  and asked for ideas on how to improve the world. Of the 22,000 ideas submitted, four, including my own, explicitly called for a single global currency. There is no known connection of the Single Global Currency Association to the originators of the other three proposals.   

 

2. "Letters–A Vote for One Currency," Wiscasset Newspaper , Wiscasset, Maine, 17 October 2002, at http://wiscassetnewspaper.maine.com//2002-10-17/letters.html. I learned later that the letter was incorrect when it stated that the Eurozone has one rate of inflation.

 

3. For those who seek more information about the author, Googling "Bonpasse" will work, and my resume is on the Single Global Currency Association website at http://www.singleglobalcurrency.org/about_us.html

 

4. "Famous Cases: Willie Sutton," Federal Bureau of Investigation, at http://www.fbi.gov/libref/historic/famcases/sutton/sutton.htm. See also "The Bank Robber, the QUOTE, and the Final Irony," on the website of the American Banking Association, at http://www.banking.com/aba/profile_0397.htm. According to the latter article, Sutton never said, "because that’s where the money is," in response to the question, "Why do you rob banks?" After finally being released from his last of several prison terms due to poor health, he wrote two books and in one he stated that it was a newspaper reporter who made up that quote and attributed it to him. In his book, Sutton wrote, "If anybody had asked me, I’d have probably said it. That’s what almost anybody would say… it couldn’t be more obvious." The story of the origin of this quote parallels that of three other quotes cited in this book, by Senator Everett Dirksen ("Take a billion here, and a billion there and pretty soon, you are talking about real money") and Federal Reserve Bank retired chair Paul Volcker ("A global economy requires a global currency"), and Margaret Mead ("Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has"). The originators of all four did not clearly write or speak those words, but confirmed subsequently what others recorded for them.

 

5. For more information about the case of Dennis Dechaine see the website, maintained by his support group, Trial & Error, at http://www.trialanderrordennis.org. His case is part of the growing civil rights movement in the United States to prevent wrongful convictions and exonerate those already wrongfully convicted. See the website of the Innocence Project, at www.innocenceproject.org. Dennis Dechaine became a client of the Innocence Project in 1993 when exculpatory DNA was found under the murdered victim’s thumbnails. Maine’s failure to correct this injustice in the face of all the evidence has done a gross disservice to Dennis Dechaine, the family of the twelve-year-old victim, Sarah Cherry, and the people of Maine, all of whom have a right to expect higher standards from their public officials. See James P. Moore, Human Sacrifice . Nobleboro, ME: Blackberry Books, 2002, and also his followup volume, State Secrets . Madawaska, ME: Trial & Error, 2006.

6. Roger Lowenstein, "Off the Shelf: Exposing the Economics Behind Everyday Behavior," The New York Times , p. BU 7, 18 December 2005. He also wrote, "In recent books like Freakonomics and The Travels of a T-Shirt in the Global Economy , economists have taken it upon themselves to explain something of how the world works. They even tell little stories." at http://www.nytimes.com/2005/12/18/business/yourmoney/18shelf.html

 

7. Paul De Grauwe, Economics of Monetary Union. Oxford, UK: Oxford University Press, 1992, p. 2.