2006-10-01 05:19:15 · 9 answers · asked by Anonymous in Social Science ➔ Economics
No for a few reasons.
Currency variations are a useful stabilising mechanism in the world markets (ignoring speculation).
For example, if your economy is not doing well, people will not want to hold your currency and your people would be selling your currency. This makes your currency lose value. The prices of products you import rises in domestic currency (therefore your people buy less of it and more of the domestic products) and the price of your exports fall in terms of foreign currency (therefore people buy more of your products). Over all, you sell more, so your economy can start recovering.
If there was only one currency then this mechanism would not be available.
Another stabilising mehcanism that could palliate this rigidity in foreign exchange would be movement of labour. If your region (here to mean a country who used ot have its own currency) is in a depression, then one way out is for people to move out to look for jobs elsewhere. They then send money back to your region, helping it recover. But immigration is quite togh. That is why currency fluctutations are important.
A second reason why this wouldn't work today ispolitical.
The US runs HUGE deficits every year, and they finance it via bonds which foreign countries buy. They buy the bonds because the US dollar is what is used to trade, especially buy oil. It there is one global currency, then there is no need to keep reserves, no need to buy bonds, and the US economy will be in serious trouble.
It has been said that one of the reasons Iraq was invaded was that Saddam Hussein had started asking for Euros instead of dollars in exchange for Iraqi oil. If other oil exporting countries followed suit, then the US would be in serious difficulty, unable to plug holes in its budget.
In total, in the world environment we live in, it is unlikely to happen. Only if one superpower, say the US decided to physically run the whole world, demolish borders excet their own would that happen today.
2006-10-01 17:16:49 · answer #1 · answered by ekonomix 5 · 0⤊ 0⤋
The Euro works in Europe basically because of Europeans have been fighting over the past 1000 years they have got fed up of fighting. I cant see the the Americans sharing the same currency as Peru, Iran etc but I bet the competition would be enormous.
2006-10-01 16:54:16 · answer #2 · answered by lee p 2 · 0⤊ 0⤋
NO and here is why many countries have their own monetiary policies and the cost of those goods are calculated in their own currency. The euro was supposed to be a fix to the economic problems in europe only problem was Britian refused to go along with it. And for now it seems that Britian was correct in this thinking. maybe in time the euro will work but having every country agree on one currency will never happen in this planets lifetime.
2006-10-01 12:26:44 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Yes world currency works. It's called American Money. all other money is monopoly money. The euro was created for lazy europeans who were too stupid to calculate the conversion. Don't Hate America because everyone here is better than everyone else. America is a melting pot
2006-10-01 12:26:41 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Global money has about as much chance as a Global Language. There's alot of history to get through before it could work. Good luck with that.
2006-10-01 12:35:38 · answer #5 · answered by Odindmar 5 · 0⤊ 0⤋
no, beacuase of different monetary policies (interest rates) needed in different economies. for this reason, the euro is not a good idea either
2006-10-04 07:31:13 · answer #6 · answered by mr. me 3 · 0⤊ 0⤋
You must be in to star trek. It will not work at this time, may be in a few hundred years.
2006-10-01 14:23:21 · answer #7 · answered by cavetarzan 1 · 0⤊ 0⤋
Maybe in a few hundred years...
Not now...
2006-10-01 12:21:34 · answer #8 · answered by Anonymous · 0⤊ 0⤋
No
2006-10-01 13:54:28 · answer #9 · answered by taxed till i die,and then some. 7 · 0⤊ 0⤋