March 27, 2008 2 Comments
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:
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.
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.