Would a Universal currency bring us closer together ?

I just saw Sarkozy’s comment today that the strong Euro is causing economic problems in France. We’ve also been hearing about the weak dollar affecting the US. Brazil and India are also complaining about the weak dollar.

Here is a naive question I had posted earlier on Yahoo Questions:

Why can’t we use a Universal Currency ? Who will gain or lose with such a transition ?

Here are some problems that I see with the current multi-currency (Dollar, Euro, Pound, Yen, Rupee..) system:

1) Currency conversions are unnecessary expenses that have to be borne by individuals and businesses.

2) Currency fluctuations are usually due to macroeconomic factors and can affect businesses adversely. Since businesses usually dont have any control over such factors, currency changes always come as a surprise to businesses (and individuals) disturbing careful financial planning.

3) In an increasingly global environment, different currencies make it harder for businesses to react quickly to business needs.
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Lets call our Universal Currency as “Money” or “Monies” !! Apart from solving the above problems, a truly Universal Currency can have another key benefit

*** Bring people together***. As a role model, Euro has already done this to some extent in Europe.

Leaving aside political hurdles, What are the potential drawbacks with this idea ?

 

I do understand that there are many political & economical issues before we can align everyone towards a single Universal currency. But Europe has done it successfully and many proud countries had given up their popular currencies like the Franc, Deutsch (?) Mark, etc. Here is a nice writeup on the advantages & disadvantages of a single currency – http://www.gocurrency.com/articles/universal-currency.htm.

My interest in a common currency is due to two reasons:

1) Remove wasted costs in conversions, unproductive currency speculation.

2) Psychologically it can be a huge factor in helping people feel united.

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About navanee
Citizen of the Universe. Visiting Earth on a valid world-visa, presently parked in Bangalore India. Detailed Bio here: http://www.linkedin.com/in/navanee Previously, lived 17 years in Coimbatore, 4 years in Chennai, 2 years in Provo, Utah and 11 years in San Jose, California.

2 Responses to Would a Universal currency bring us closer together ?

  1. Me says:

    I am totally with you on this. I tried asking my International Political Economy professor about it a few years ago when I was in college and he didn’t know how to respond. It was as if he had never thought about the idea of a universal currency before.

    I think it would work.

    At one time it might have been easier to manipulate your currency to help yourself, but as things get more globalized, it’s just too messy.

    Take China and the US for example. The US needs China to have a weak currency so that it can purchase its supplies and products for cheap (American services and products use Chinese parts which in turn affects how cheap they can sell their services/products for as well as how keeping operational costs low). At the same time, the US needs China to have a stronger currency so that it can compete more effectively and lessen its trade deficit. In the end, I think the US may get inflation either way.

    We need a universal currency. I think it’s not discussed much now but it will be in the years to come. I just can’t imagine all 50 of the United States having their own currency. The transaction costs would be ENORMOUS. It simply is more efficient to have one currency if possible.

  2. Nagi says:

    Its nice idea,how and when comes to practice

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