Will there ever be a global currency?

Question

While the unofficial currency in central and south America is USD the number of countries adopting Euro as their official currency has been increasing. Meanwhile However there are ones like the UK, that resist this process.

Answer 1

there had been a global currency in the past - GOLD.

howver, because of hoarding, the Gold Standard and the Bretton Woods Agreement had been scrapped. The USD serves as the unofficial universal medium of exchange, as country's foreign reserves are dollars.

probably, the global currency of the future would be plastic, the likes of credit and debit cards.

Answer 2

A global currency has some advantages, but also some disadvantages.

The main issue is that exchange rates serve as stabilisers. Let's say country X, an agricultural economy, is hit by drought. Therefore country X cannot export much, therefore imports exceed exports, the outflow of funds exceeds the inflow. Hence country X's currency deprecistes, loses value, so that the price of imports in domestic currency rises, and the price of exports in foreign currency drops. This causes imports to fall and exports to rise. Correcting the issue.

If the exchange rate was fixed, then this avenue would not have been available.

To see what a global currency would mean, look at Europe that's part of the Euro zone. What happens is that people will move from areas where there are fewer of lesser paying jobs to places where there are more or better paying jobs. This is how the whole of the Euro Zone can get integrated, iron out regional differences, and truly be able to behave as one block. This means that labour migration is another side of the coin of global currency because once the stabilising mechanism of the exchange rate is lost, the second option is migration.

I am not sure people across the world (especially in countries where jobs are better paid) are ready for large scale migration.

Furthermore, the issueof what would teh currecny be is also important. It has been argued that the US invaded Iraq because Saddam Hussein was asking for Euros instead of DOllars in exchange for oil. The implications of that would have been disastrous for the US. The US consistently runs deficits in budget and balance of trade; this is financed by US treasury bonds. Basically, given that most of world trade is in USDollars, countries find it useful to keep USDollars in reserve. Therefore they absorb the bonds, basically financing the deficits of the US. Now if people start keeping Euros rather than Dollars, the US would have problems financing the deficits, and could face bankruptcy, being forced to sell-off assest like they did to the Japanese in the 80s.

In sum: the only pragmatically possible world currency would be USDollar. But the flip side of a global currency is easy migration, and this isn't going to happen in the short to medium run.

There is a final alternative, the US basically colonises the world. So ther would be no deficits since the whole world can't be in deficit (there aer winners and losers, but if all are in one country, then they cancel each other out) I think that might be more likely than free migration...

Answer 3

There are short term political benefits of having a currency which can be used to manipulate global competitiveness. Due to the five year time span of most Governments in the UK, short termism is a common trait where politicians make decisions rather than people who take a longer term view.

From a politicians point of view, having a currency of your own allows you to manipulate reality in the short term. If you had a longer term point of view, and had little financial credibility of your own (as a nation), then joining the Euro or USD would be a good stabilizer.

The UK does have a reasonably good track record, however so did Germany and France. We are an island though, and this does make us unique within "mainland" Europe.

Personally, if the expense of exchange and the difficulties of obstructive banking were removed I would not be overly concerned one way or the other. As it stands, due to the obstructive banking and the expense of currency exchange, I would be for the UK joining the Euro.

Answer 4

I think we will probably go Euro in the uk eventually, even if they have to call it the Euro pound just to keep some people happy.

The economic situation has benefitted us so far but maybe things will change, how long will we dig our heels in for if we see year after year that the Euro would make a huge improvement to our lives?

The time is not right now but the people who say 'no way, never' are just fools to themselves, maybe it wont be the Euro and some other global currency but how much easier life would be for many people around the world.

How many millions are wasted all over the world just dealing with transactions in all these diffrent currencies?

Answer 5

It's unlikely, since countries that try free trade agreements can't even live up to that. Nevermind the prospect of a global currency, which would make things easier. The U.S. dollar is the closest thing we have now to a global currency, because it is accepted around the world.

Answer 6

Not anytime soon. With the pound as strong as it is there's no real need for us to join. Anyway part of the fun of going on holiday is paying 4 million zlotys or whatever for a cup of tea.

Answer 7

Somebody like George Soros would try his best to not let that happen, he made his fortune by playing the currency market, he is super rich because it.

Answer 8

i think you're questioning is extremely clean! I only desire the final public of our countrymen and girls human beings will awaken to the indisputable fact that this "disaster" became much less of a disaster previous to each and every and all of the heavy hitting spending our very own government did. i think of that enterprise and government might desire to be stored separate, tho I do have confidence enterprise desires some policies. i do no longer have confidence the Treasury might desire to in any way have governance given to them over extra advantageous than only the banking marketplace. to supply that lots skill to a branch of government is actual no longer what our founding father's needed for us. They needed the persons to preserve the skill, and the government to paintings FOR the persons. how this is going we are able to all be working for the government in one way or yet another and our democracy will slip away. devoid of our oversight our very own government can break us.

Answer 9

Come on ..... USD is already global currency

Oil = bought in USD
Gold = Bought in USD
Coffee = Bought in USD

do I need to go on

Answer 10

Yes I think there will be at some stage in the future.