The Governer of China’s Central bank; Zhou Xiaochuan, proposed a new world currency today. Basically asking the world to unite the largest currencies into one as the standard around the world. The U.S. dollar, yen, euro and sterling.
The advantages and disadvantages of this plan are plenty.
The reasoning behind it is that as the global economies are delicate, and the US is bailing more and more companies out… they are printing money. this causes the dollare to be more in circulation… thus causing $’s to have less value… internationally. China is the biggest holder of US$ reserves (at $2Trillion)…. so if the $ goes down, then China has less valued reserve buying power.
This means they will be more interested in buying $ than products… thus further increasing inflation and throwing the global economy in the trash.
So… just have a standard currency that all the countries use therefore no longer allowing one country to abuse their printing process. Well… they CAN… but it won’t affect external economies as much. Only hurting themselves.
ideally this makes USA responsible for their actions….
the concern many have, is that whoever governs this new “world bank” for the currency… essentially holds all the countries in their palm. The same way america now can hurt and influence other economies… by pushing them to do whatever we want… while going madly in debt ourselves… this NEW world currency can do the same thing.
Yes… i do agree that can happen. that’s why we need to have a check and balance system.
The US Federal Reserve presented a unified monetary system some years ago… where all the states could centralize their indipendent monetary currencies in exchange for the US $. 10 some years ago… EU did the same thing… seems to be working out.
Its true the US government controls the States… that’s why we have congress, the different offices, and checks and balances. the EU also is going through these reforms.
I agree with comments made that the central bank will control the governments to some degree. but there has to be a check and balance system.
It would work. are we ready for it? That i dont’ know. Is the world ready to have such a “world peace”? I think we are not. but it would work.