Single global currency

[Wellytrack]

Seeing how everything Brexit related is largely a hypothetical, it occurred to me the other day what would the effect of a single global currency be?
I know in effect, the Dow and Dollar does dictate a fair bit of play, but what with all the billions that are creamed off by you know - 'those guys' dealing in mere fractions of a percent trading currency daily, and the inevitable weakening and strengthening of currencies against each other.
It makes what was a cheap commodity or export seen rather expensive quite quickly.

Ignoring the unlikelness of it being agreed to, Would it bring stability? Would it bring the ruin of rich nations? Parity and fairness to the ever poor third world?

The U.S Dollar is the obvious choice, but it could be Yuan.


In this case we'll call it The Dong, cuz well, as it's a day dream why not...

 

[glasshouse]

there used to be a single global currency............gold

 

[Exfarmer]

There already is a dong, 1£ Sterling is worth about about 31,500
£30 makes you a millionaire in Vietnam

 

[Green oak]

I like the idea. A mate got currency bashed at the airport 1.12 euros to the £ when the real time rate was E141. Cannot be right surely.

 

[Wellytrack]

Where's @Brisel he's good at these hypothetical quandaries

 

[Exfarmer]

A currency is just a measure of how a country is doing. to have one currency would mean, all countries would have to come together.
The fact is, 100 years ago there was a global currency and it was called the Pound Sterling. All countries used this to measure there performance and it was the trading currency of choice. Today the global currency is the US dollar, it has usurped the Pound and in fact is used in many countries as the internal currency because the populace do not believe in the paper ( because after all, that is all, any note is made of ) printed by their own government is worth the paper it is printed on.
There is little reason for large trading margins for currency except the physical cost of the transaction. So your purchase of 100 Euro at the airport has to cover the cost of a trader converting, the teller taking a few minutes and the rent and rates on the booth ( which is probably tied to his turnover)
if you want to get this cost down , use a pre paid currency card which will give rates, very close to the actual and will allow cost free withdrawals or purchases in the local currency at the destination, such as Caxton FX. I believe there are others.
The reason that governments have there own currency, is the same reason we do not have the gold standard used anywhere, it allows them to print money, for effectively nothing, to pay salaries etc in their own country. The more they print , the more it keeps presidents, civil servants and others happy by increasing salaries. of course the result is inflation and a fall in value of the currency against others

 

[Wellytrack]

A currency is just a measure of how a country is doing. to have one currency would mean, all countries would have to come together.
The fact is, 100 years ago there was a global currency and it was called the Pound Sterling. All countries used this to measure there performance and it was the trading currency of choice. Today the global currency is the US dollar, it has usurped the Pound and in fact is used in many countries as the internal currency because the populace do not believe in the paper ( because after all, that is all, any note is made of ) printed by their own government is worth the paper it is printed on.
There is little reason for large trading margins for currency except the physical cost of the transaction. So your purchase of 100 Euro at the airport has to cover the cost of a trader converting, the teller taking a few minutes and the rent and rates on the booth ( which is probably tied to his turnover)
if you want to get this cost down , use a pre paid currency card which will give rates, very close to the actual and will allow cost free withdrawals or purchases in the local currency at the destination, such as Caxton FX. I believe there are others.
The reason that governments have there own currency, is the same reason we do not have the gold standard used anywhere, it allows them to print money, for effectively nothing, to pay salaries etc in their own country. The more they print , the more it keeps presidents, civil servants and others happy by increasing salaries. of course the result is inflation and a fall in value of the currency against others

But on that subject of just printing money, both the fed and BOE have printed BIllions of well, 'something' what has that really done? QE largely pushes up inflation, but what would Global trade be like with a genuine single currency?
The Euro has been expected to fail since its inception, and all these years later it's still doing ok.
Yes, I admit the Dollar props up most currency, but it does make you wonder...

 

[Brisel]

Where's @Brisel he's good at these hypothetical quandaries

Cheers. Not sure what I can add to this.

The issues with different economies and one currency are well documented in Europe. One economy is keeping another one down, or up. Greece is keeping the Euro down. Germany, whilst bailing them out, benefits from the weak currency as they can export cars, combines and tractors cheaply. Greece cannot devalue to boost exports or raise interest rates and suffers with a currency stronger than it should be. Greece is trapped in a situation of bailouts as it cannot manage its own economy. Ireland, meanwhile, seems to have been able to manoeuvre and recover itself.

@glasshouse is right. Most major currencies were pegged to the price of gold. They all had to remove that tie because they couldn't sustain it.

If you'll excuse me, I'm off to read up on the Gold Standard.

 

[glasshouse]

A currency is just a measure of how a country is doing. to have one currency would mean, all countries would have to come together.
The fact is, 100 years ago there was a global currency and it was called the Pound Sterling. All countries used this to measure there performance and it was the trading currency of choice. Today the global currency is the US dollar, it has usurped the Pound and in fact is used in many countries as the internal currency because the populace do not believe in the paper ( because after all, that is all, any note is made of ) printed by their own government is worth the paper it is printed on.
There is little reason for large trading margins for currency except the physical cost of the transaction. So your purchase of 100 Euro at the airport has to cover the cost of a trader converting, the teller taking a few minutes and the rent and rates on the booth ( which is probably tied to his turnover)
if you want to get this cost down , use a pre paid currency card which will give rates, very close to the actual and will allow cost free withdrawals or purchases in the local currency at the destination, such as Caxton FX. I believe there are others.
The reason that governments have there own currency, is the same reason we do not have the gold standard used anywhere, it allows them to print money, for effectively nothing, to pay salaries etc in their own country. The more they print , the more it keeps presidents, civil servants and others happy by increasing salaries. of course the result is inflation and a fall in value of the currency against others

The " Pound" was literally a pound of gold, till ww1.
Churchill put us back on the gold standard in 1926, a huge mistake which led to industrial depression , the general strike etc. i think it only lasted a few yrs.

 

[Wellytrack]

The " Pound" was literally a pound of gold, till ww1.
Churchill put us back on the gold standard in 1926, a huge mistake which led to industrial depression , the general strike etc. i think it only lasted a few yrs.

Not to be pedantic, but I thought a pound, had been a pound of silver.

Anyways, trillions of currency made up of 'the ether' or ones and zeroes on a screen rather than being backed by anything physical is only good for those 'selling' debt surely.

 

[alex04w]

The " Pound" was literally a pound of gold, till ww1.
Churchill put us back on the gold standard in 1926, a huge mistake which led to industrial depression , the general strike etc. i think it only lasted a few yrs.

Not to be pedantic, but I thought a pound, had been a pound of silver.

Anyways, trillions of currency made up of 'the ether' or ones and zeroes on a screen rather than being backed by anything physical is only good for those 'selling' debt surely.

The British Pound is not called sterling for nothing. It was related to, and for centuries made from, sterling silver i.e. silver that is 925 parts per 1,000 pure silver. This standard for our coinage was diluted in 1921 when the coinage went down to 50% silver. It was finally abandoned in 1947 when the currency was totally debased and made from Cupro Nickel with no silver content whatsoever.

For a time the Pound was tied to gold - one gold sovereign was one pound in value and vice versa. A sovereign weights 7.98 grams and is made from 22 carat gold i.e. 22 parts per 24 pure gold. You used to have the legal right to take you paper money into the bank and demand gold (sovereigns) in return. Not anymore sadly.

As has been mentioned, every country used to have their currency tied to gold and silver. When American left in, I think, 1971 the tied between gold and currency was finally broken worldwide.

As a result governments have printed paper 'money' like it was going our of fashion. What is your paper money worth - nothing it is a worthless piece of paper. It only has a value if you trust the government that issued it. Today 'trust' and 'government' seldom ever go in the same sentence.

Whilst China never issues accurate statistics (about anything) it is generally accepted they are stock piling gold. They are waiting for the US to overstep the mark on Quantitative Easing and money printing - they are pretty much there as the federal debt is totally un-repayable. The Chinese will then make their move to establish the Yuan as the new global currency of choice and they will back it in part with gold.

Should this happen, gold will rocket in value, as America will be shown to have none, like many other countries (think the UK and Gordon Brown), and will scramble to buy what they can.

The idea of a global currency is just a fantasy of the Euro wrote large. The Euro is failing because there is no central controlling government. They are working towards federal government (which is the reason to vote OUT) and without such central government, the Euro will fail. The idea of a one world government to support a world currency is yet another pie in the sky idea.

 

[glasshouse]

I stand corrected , but gold was the base of the pound via sovereigns, for a very long time.
since the usa ditched gold in 71, inflation has been massive.

 

[Wellytrack]

It makes you wonder, why we put so much confidence in Gold.
The minerals and heavy metals used to make up the now 'next gen' batteries for motor and off grid applications have exploded in value over this past decade.

Similarly there's still the Petro-dollar.

 

[its yourself]

The British Pound is not called sterling for nothing. It was related to, and for centuries made from, sterling silver i.e. silver that is 925 parts per 1,000 pure silver. This standard for our coinage was diluted in 1921 when the coinage went down to 50% silver. It was finally abandoned in 1947 when the currency was totally debased and made from Cupro Nickel with no silver content whatsoever.

For a time the Pound was tied to gold - one gold sovereign was one pound in value and vice versa. A sovereign weights 7.98 grams and is made from 22 carat gold i.e. 22 parts per 24 pure gold. You used to have the legal right to take you paper money into the bank and demand gold (sovereigns) in return. Not anymore sadly.

As has been mentioned, every country used to have their currency tied to gold and silver. When American left in, I think, 1971 the tied between gold and currency was finally broken worldwide.

As a result governments have printed paper 'money' like it was going our of fashion. What is your paper money worth - nothing it is a worthless piece of paper. It only has a value if you trust the government that issued it. Today 'trust' and 'government' seldom ever go in the same sentence.

Whilst China never issues accurate statistics (about anything) it is generally accepted they are stock piling gold. They are waiting for the US to overstep the mark on Quantitative Easing and money printing - they are pretty much there as the federal debt is totally un-repayable. The Chinese will then make their move to establish the Yuan as the new global currency of choice and they will back it in part with gold.

Should this happen, gold will rocket in value, as America will be shown to have none, like many other countries (think the UK and Gordon Brown), and will scramble to buy what they can.

The idea of a global currency is just a fantasy of the Euro wrote large. The Euro is failing because there is no central controlling government. They are working towards federal government (which is the reason to vote OUT) and without such central government, the Euro will fail. The idea of a one world government to support a world currency is yet another pie in the sky idea.

Stockpiling gold?

A conspiracy theory.

So much for the rational case for Brexit.

In another thread another leaver calls Europe a rotting corpse.


It's clear Brexit is not about rational thought.

It's about gut feelings truthiness and general dislike of the present.

Leavers seek a mythical place of bicycle pushing vicars a la Miss Marple and Downton.

Bonkers really.

 

[arcobob]

Cheers. Not sure what I can add to this.

The issues with different economies and one currency are well documented in Europe. One economy is keeping another one down, or up. Greece is keeping the Euro down. Germany, whilst bailing them out, benefits from the weak currency as they can export cars, combines and tractors cheaply. Greece cannot devalue to boost exports or raise interest rates and suffers with a currency stronger than it should be. Greece is trapped in a situation of bailouts as it cannot manage its own economy. Ireland, meanwhile, seems to have been able to manoeuvre and recover itself.

@glasshouse is right. Most major currencies were pegged to the price of gold. They all had to remove that tie because they couldn't sustain it.

If you'll excuse me, I'm off to read up on the Gold Standard.

I believe I read that the US dollar is backed by gold to the value of around $33 per ounce. In other words if you go to the US treasury with $33 you can demand an ounce of gold. Of course you would not get it because there are far more dollars in circulation than there is gold to cover them. A further scam is the trading of gold on the world markets. More gold , physical plus certificates in lieu etc, are traded each day than ever existed. If all those who held these pledges cash in on the same day the world financial system would collapse. It is a confidence trick in the true sense and money printing is really a fraud.

 

[alex04w]

Stockpiling gold?

A conspiracy theory.

So much for the rational case for Brexit.

In another thread another leaver calls Europe a rotting corpse.

It's clear Brexit is not about rational thought.

It's about gut feelings truthiness and general dislike of the present.

Leavers seek a mythical place of bicycle pushing vicars a la Miss Marple and Downton.

Bonkers really.

It is funny that you are the only sane person on here. Everyone else is delusional, a nut job, lacking in rational thought, bonkers.

Do you just throw out these comments as you have no rational arguments to present and in the hope that no one recognises the emperor has no clothes

 

[its yourself]

It is funny that you are the only sane person on here. Everyone else is delusional, a nut job, lacking in rational thought, bonkers.

Do you just throw out these comments as you have no rational arguments to present and in the hope that no one recognises the emperor has no clothes

I throw these comments out because they are made by the leave campaign.

Are you claiming that is the sane rational side?

 

[wanton dwarf]

A currency is used to trade in goods, each currency has an associated exchange rate.

What would happen is the same thing that has happened in the EU.

Areas where the currency was reduced over time to make them more competitive would have high unemployment such as Greece and Spain.
Areas where the currency was increased due to high efficiency and demand would over heat taking those with the best skills leading to mass migration, social problems and pollution - such as Germany.

If the UK did not have it's own currency in 2008 it would have gone bankrupt.

A reduced value currency means any associated debt loaned in a foreign currency goes down in value, exports are more competitive, exports in value are increased and so the ability to pay debt by exports is increased.

The BS about trading expenses on currency... well you can hedge this to practically nothing and for large sums the transaction charge becomes meaningless. When you pay at a "Booth" you're paying for the bum on the seat not the currency transaction.

But it should be obvious by now that the economy is suffering due to increased cost yet a lack of tax income to HMG... could this be due to immigration leading to low wages leading to a low income tax yield per head... never mind those leeching off NHS etc.

Oh yeah the tradition view of "Printing Money" leading to inflation has been broken - the BoE issued Sterling Bonds to HMG meaning interest payments got paid straight back to HMG which essentially meant ZERO finance - as admitted by local MP this was "Cheating" but it worked. Also QE (Which IMHO was shameful giving to the Elite) also led to no inflation.

 

[wanton dwarf]

Also UK currently suffering from a low tax take per head.

This is most likely down to immigration reducing wages and in some case migrants paying little to no tax by "Going Home" at the end of the year and reclaiming any tax paid - you'd do it if you could, 10x the wages at home and no tax....

Combine this with increased base costs on free NHS, dental, low wage support, child benefit and housing benefit... this is only heading in one direction.

 

[baabaa]

A currency is used to trade in goods, each currency has an associated exchange rate.

What would happen is the same thing that has happened in the EU.

Areas where the currency was reduced over time to make them more competitive would have high unemployment such as Greece and Spain.
Areas where the currency was increased due to high efficiency and demand would over heat taking those with the best skills leading to mass migration, social problems and pollution - such as Germany.

If the UK did not have it's own currency in 2008 it would have gone bankrupt.

A reduced value currency means any associated debt loaned in a foreign currency goes down in value, exports are more competitive, exports in value are increased and so the ability to pay debt by exports is increased.

The BS about trading expenses on currency... well you can hedge this to practically nothing and for large sums the transaction charge becomes meaningless. When you pay at a "Booth" you're paying for the bum on the seat not the currency transaction.

But it should be obvious by now that the economy is suffering due to increased cost yet a lack of tax income to HMG... could this be due to immigration leading to low wages leading to a low income tax yield per head... never mind those leeching off NHS etc.

Oh yeah the tradition view of "Printing Money" leading to inflation has been broken - the BoE issued Sterling Bonds to HMG meaning interest payments got paid straight back to HMG which essentially meant ZERO finance - as admitted by local MP this was "Cheating" but it worked. Also QE (Which IMHO was shameful giving to the Elite) also led to no inflation.

does the fact that however much they print,they seem unable to stimulate some inflation mean the fiat system is fecked?