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Articles - Non-Academic, Previous (older):  about monetary unions, single global currency and related subjects. For recent articles see SGC Links: Articles, Non-Academic


31 August 2006.  "Hungarian government approves EMU convergence program"  from the Asssociated Press.

Excerpts from the article...

   The government on Thursday approved Hungary's European Monetary Union convergence program, which will be submitted to the EU on Sept. 1, a government spokeswoman said....

Jarai said the plan would give Hungary more credibility as it moves toward adopting the 12-nation common currency....

   The council earlier this week said the country's plans for adopting the euro should set a date by mid-2008 for changing to the common European currency.

   Hungary, which joined the EU in 2004, had planned to adopt the euro in 2010, but postponed that because of a large budget deficit, which this year is forecast to reach 10.1 percent of gross domestic product -- three times the EU limit for countries using the euro.

EU members who have yet to enter the euro zone must design a convergence program annually. Countries that already use the common currency are required to prepare a draft called the stability program....

 

29 August 2006.  Reposting on the web of Herbert Grubel's 1999 article, "The Case for the Amero" as posted on the Vive Le Canada website.

Excerpts from the article...

   On the day the North American Monetary Union is created--perhaps on January 1, 2010--Canada, the United States, and Mexico will replace their national currencies with the amero.1 On that day, all American dollar notes and coins will be exchanged at the rate of one US dollar for one amero (). Canadian and Mexican currencies will be exchanged at rates that leave unchanged their nations' competitiveness and wealth. In all three countries, the prices of goods and services, wages, assets, and liabilities will be simultaneously converted into ameros at the rates at which currency notes are exchanged.

   At the same time, the national central banks of the three countries will be replaced by the North American Central Bank. The operations of that bank will be governed by a constitution like that of the European Central Bank, which makes it responsible solely for maintaining price stability. It is not required to pursue full employment or maintain certain exchange rates. Its personnel policies will be free from political influences, in particular those arising out of partisan national politics in member countries....

29 August 2006.  "Poland Won't Set Euro Entry Date, Needs More Time, Kluza Says"  Bloomberg.net by Katya Andrusz and Dorota Bartyzel

Excerpts of the article...

    Aug. 28 (Bloomberg) -- Poland, the only new European Union member never to have set a date for adopting the euro, needs more time to trim its $10 billion deficit before deciding when it will do so, Finance Minister Stanislaw Kluza said.

    To join the euro area, the 10 nations that joined the European Union in 2004 need to trim shortfalls to within 3 percent of gross domestic product and keep debts and inflation in check. Poland meets the debt and inflation rules, while the deficit is forecast at 4.6 percent of GDP this year, according to EU rules....

   The EU this year rejected a bid from Lithuania, the largest Baltic country, to adopt the euro on Jan. 1. Estonia, which also wanted to adopt at the beginning of next year, pulled out after soaring economic growth pushed inflation beyond the limits. Latvia postponed its Jan. 1, 2008, start date for the same reason....

 

29 August 2006.  "Beijing heavy hitter takes aim at revaluation's backers"  by John Garnaut, Economics Correspondent in the Sydney, Australia, Morning Herald. (See similar article at Forbes.com "China adviser rebuffs calls for yuan revaluation - report"  by Sean Mangieri, AFX News)

Excerpts from the article....

   THE newest member of the Chinese monetary policy committee will today launch a stinging attack on those calling for a major revaluation of the yuan.

   Fan Gang, a Harvard-educated economist who this month joined the People's Bank of China committee responsible for advising on interest rates and exchange rate settings, says the US dollar, not the Chinese currency, is "a major source of instability"....

   ... Dr Fan does not blame the US for the global imbalances that rile US Congressmen and jeopardise the financial systems of developing economies. Instead, he points to the absence of any global currency system after the collapse of the gold standard.

   He says the world's choice of the US dollar as its global currency standard has released US policy makers from the usual economic constraints of excess liquidity....

   Dr Fan, the director of the National Economic Research Institute in Beijing, says the answer lies in a new currency standard somewhere between the old "rigid" gold standard and a new "utopian" international currency.

   He advocates a new Asian currency unit being discussed at the Asian Development Bank.

   "This is no ivory tower exercise. Both China and Japan are very serious about it."...


27 August 2006.  "EU poll shows 82% of Slovenians support the euro"  from w.portalino.it

Excerpts from the article...

   Slovenians mostly think about the EU in connection with the single European currency, the euro, with 82% of those surveyed in favour of the European Monetary Union and the euro, according to the results of the latest Eurobarometer poll.

   The results, presented by the European Commission Representation in Slovenia on Monday, also show that 58% of Slovenians think positively of the EU, while their trust in European institutions is improving.

   According to the poll, carried out in March and April on 1,033 Slovenians, 65% of them trust the European Commission (up from 53% from the autumn poll) and 61% trust the European Central Bank (up from 47% half a year ago).

   The loss of the country's national currency, the tolar, is meanwhile feared by 35% of those polled, down from 39% in the autumn Eurobarometer. Slovenia is to switch over to the euro on 1 January 2007....

   Over half of those polled meanwhile said that Slovenia's priority task is fighting unemployment (55%), followed by measures to improve the economic situation (34%)....

   In comparison with the Eurobarometer carried out one year ago, a greater percentage of Slovenians also believe that membership in the EU is something good. The number stands at 54% currently, up from 43% a year ago.


26 August 2006.  " Mercosur Econ Mins To Meet In Brazil On Common Currency"  on Easybourse.com from Dow-Jones News, by Drew Benson

   BUENOS AIRES -(Dow Jones)- Argentine Economy Minister Felisa Miceli will join her counterparts from the Southern Cone Common Market, or Mercosur, in Brazil next week to discuss a regional currency and a development bank, her office reported Friday.
Mercosur economy ministers suggested a move to a common currency - and away from the dollars normally used in cross-border trade - at a trade bloc summit last month in Cordoba, Argentina.
Next week's meeting will take place Thursday in Rio de Janeiro.

   The Mercosur nation ministers are also expected to discuss strategy ahead of next month's meeting of the International Monetary Fund in Singapore.  Argentina, Brazil, Paraguay, Uruguay, and Venezuela make up the Mercosur bloc.
    Miceli criticized the IMF at an economic seminar in Buenos Aires earlier this week. The lender needs to ensure "sustained growth for the global economy and not continue proposing adjustment measures that go off course into future crises," she said.


25 August 2006. "Monetary policy hurting Canada, Duceppe says" by Rheal Seguin, Globe and Mail (Canada)

The article begins....

   QUEBEC CITY -- Bloc Québécois Leader Gilles Duceppe is calling for debate on a common currency in the Americas after the majority takeover of Quebec-based Domtar Inc. by the U.S. forestry giant Weyerhaeuser Co.

   Mr. Duceppe said Canadian monetary policy encourages the foreign takeover of Quebec and Canadian companies by penalizing companies that rely heavily on exports.

   "We have this ridiculous economic policy that when exports grow, the economy gets stronger and the value of our currency increases. Then exports decline and things get worse. It's always like a yo-yo," Mr. Duceppe said yesterday.

   A debate on monetary policy is needed, he said, because the Bank of Canada is so closely tied to U.S. Federal Reserve policies that it has lost its ability to influence independent economic policies at home....

 

24 August 2006.  "Common currency basket for East Asia proposed"  by Minderjeet Kaur, Business Times, Malaysia.

The article begins...

    A COMMON currency basket, similar to that used in the European Union (EU), has been proposed for East Asian countries.

    The recommendation by Network of East Asian Think-Tanks (Neat) will be submitted to Asean Plus Three Governments.

   Neat Malaysia chairman Datuk Seri Mohamed Jawhar Hassan said a joint study between the public and private sector should be carried out to explore this proposal further.

   "The study should include lessons and experiences of the EU. The focus should also be on the currencies to be included and their shares in the regional basket," he told reporters after chairing a three-day Neat Fifth Country Coordinators Meeting and its fourth annual conference in Kuala Lumpur yesterday.

   The common currency basket is one of the recommendations made at the meeting, themed "East Asia Cooperation: The Next Ten Years".

 

16 August 2006.  Article in Johannesburg Mail and Guardian about SADC - the 14 nation South African Development Community  by Andre Grobler | Maseru, Lesotho

Excerpts from the article:

   Salomao said the ministers had decided, due to human and financial constraints, that the regional body will focus on five broad areas of development.

   "We have come to a conclusion that we cannot do everything at the same time."

   The first priority for the SADC region is peace, political stability and security.

   "[This is] the prerequisite for us to address our main challenges: underdevelopment and poverty," Salomao said.

   The second priority the body set for itself is liberalising trade between member countries. The SADC wants to be a free-trade area by 2008, a customs union by 2010, a common market by 2015, a monetary union by 2016 and have a single currency by 2018.

   Infrastructure development is identified as the third priority. This includes transport networks like roads, rail, ports and airports in the region.

   The fourth priority is food security, seen as one of the issues affecting the daily lives of the region's people. Skills development is the fifth priority. [emphasis added here.]


8 August 2006.  Possible future Israel membership in European Monetary Union, noted in "VP Verheugen doesn’t rule out eventual monetary union for Israel "  in a European Union newsletter.

Excerpts from the article...

    ...The future perspective, said Commissioner Verheugen, was for Israel to be, “widely integrated into the European economic structures, and to fully participate in the internal market. It would not even exclude monetary union. The Israelis have asked me: What does that mean? I said, it means that company from Haifa can move to Copenhagen or Rome just as freely as companies from Atlanta can move to Boston or Seattle....

 

8 August 2006.  Possible South Asian common currency noted in "India, Pakistan Form Friendly Ties"  in Seoul Times.

Excerpts from the article....

   ....However, recently at the meeting of South Asian Association for Regional Cooperation (SAARC), Musharraf and Vajpayee met and shook hands in what turned out to be a memorable episode.

   Which has had a remarkable cascading effect.
Islamabad and New Delhi will begin composite talks — which will include Kashmir — in February.

   As a follow-up to that, the two nations have restored diplomatic relations, air, rail and road links, and have begun toying with the idea of a having a common currency for SAARC (India, Pakistan, Bangladesh, Nepal, Bhutan and Sri Lanka), and this can be the Indian rupee....

 

4 August 2006.  "The case for a global currency" by Professor Robert H. Wade, London School of Economics.  International Herald Tribune.  See image of article, including sample dollar of "United States of the World"

   The column notes that it is unsatisfactory for a single nation, the U.S., to manage a global currency, upon which so much of the world depends.

The column closes with:

  ...The root of the problem, though, is not the imperialist behavior of the United States, it is the asymmetry created by the fact that one national currency is also the international currency. Any other state whose currency was the international currency would probably behave much as the United States does.

   The world economy needs an international currency distinct from national currencies and national interests. The currency should be designed to incorporate the advantages of the gold standard, such as impartial levying of costs on states which are profligate, without its disadvantages, such as excessive rigidity.

   We should be thinking of creating a global currency unit, or GCU, based on the inflation-adjusted real gross domestic product of the major economies. Governments and companies would issue bonds denominated in the GCU and hold them in their reserves. Countries could make cross-border payments in their own currency, with the payments settled inside an international clearing union using the GCU as the numeraire, or base unit of measure....

   What we need is a global currency.
 

21 July 06 "Currency Consolidation and Crises"  by Theodore di Stefano, E-Commerce Times. (Featuring interview with Clyde Prestowitz, author of 3 Billion New Capitalists and Rogue Nation.)

The article begins...

     There are changes on the horizon for the dollar. To protect our dollar, we must balance our budgets, save more as a nation and borrow less. The American people have always risen to challenges. I have no doubt that they will rise to this one.

    In a recent article for the E-Commerce Times entitled "Monetary Unions: Are We on Our Way?" I talked about what I feel are the present dangers to the dollar and whether or not currency consolidation would reduce the risk of a dollar crisis.

For that article, I interviewed Morrison Bonpasse, the president of the Single Global Currency Association, and asked his opinion on currency consolidation and how it could help avert a currency crisis....

30 June 2006.  "PanAfrica: The AU-What the People Want - EDITORIAL"  in The Daily Observer - Banjul, The Gambia

Excerpts from the editorial...

    The Seventh Banjul AU summit is another landmark in the political development of our continent. The Syrte Declaration signed in Libya to establish the AU was done with a view to accelerate the unification of Africa....

    What the people of Africa want is total monetary union, with a single continental wide currency, which is backed up by the African Central Bank and that can be used as a legal tender any where in Africa....

 

2 June 2006.  "Monetary Unions: Are We On Our Way?"  by Ted di Stefano in Ecommerce Times.

The opinion piece begins...

   Most of us have a subtle, almost subconscious, awareness that the dollar is vulnerable to a currency crisis. Why? Because we realize that our US$4.8 trillion national debt is growing, due to our yearly deficits that have been running in the hundreds of billions.

   What has kept our dollar strong so far is the confidence that China and Japan have shown in it by each purchasing over $800 billion in dollar-denominated assets, like U.S Treasuries, government-backed mortgages, etc.

   Additionally, the fact that OPEC currently sets the value of a barrel of oil in dollars certainly helps the hegemony of the dollar. But, will foreign countries keep backing the dollar, given so much political volatility in the world today? And, is there a way by which we can avoid a world currency crisis?....

   There is another approach that is also intriguing. It's described in a book by Morrison Bonpasse entitled The Single Global Currency - Common Cents for the World, and is available from Amazon.com (Nasdaq: AMZN) and directly from the Single Global Currency Association, a non-profit organization dedicated to promoting one world currency by 2024, the 80th anniversary of the famous Bretton Woods conference.

   First a disclaimer: I am on the Advisory Board of this international association and will describe its goals without either advocating or disclaiming them. Now back to Morrison Bonpasse's book:

   Mr. Bonpasse explains how e-commerce has really made the time ripe for a single global currency, noting that a global currency union is more feasible now "... because the technology of computers and communications has enabled the faster distribution of information to a vastly larger audience than ever before ... and ... the lack of such technology was a major reason why a global currency was not created at Bretton Woods in 1944 ..."

   Bonpasse also says something in his book that is rather revelatory: Today "... money is far less important as a medium of exchange, as the most important medium now used is the digit in the form of an electron, in a cable or wire, or in the form of a radio or other electromagnetic wave ..."

   Before I met Bonpasse and before I became a member of the international advisory board of the Single Global Currency Association, I stated in my article entitled, Are We Headed Toward One World Currency? that, "E-banking is another factor that lends itself to some sort of currency amalgamation."

   The two solutions above from Prestowitz and Bonpasse show how we could avert a currency crisis, if one should ever come. Because currency fluctuations affect us all, whether we know it or not, it's fun to at least ponder the solutions....


29 May 2006.  The New York Times editorialized about the large risks of the vast U.S. indebtedness to foreigners, "The Interest Must Be Paid"

    The Times summarized the size of the problem:

...Today, however, 43 percent of the United States' publicly held debt of $4.8 trillion is held abroad, mainly by central banks in Japan, China and Britain and by offshore hedge funds. That's up from a 30 percent share in 2001, an extraordinary increase. Indeed, during the Bush years, 73 percent of new government borrowing has been from abroad....

  In response the SGCA wrote an email to The New York Times:

   As your editorial, "The Interest Must Be Paid" noted, payments of interest to the foreign owners of U.S. Treasury securities, and/or a shift in foreign investor investment preferences "could be very destabilizing, forcing a drop in the dollar, higher interest rates and higher prices. Such shifts can be sudden as in the Asian financial crisis in 1998."

   Owing $2.1 trillion, principal, plus the anticipated accumulation of interest payments, to foreigners should be troubling enough, because of the anticipated vast transfer of wealth out of the country.  One way to view the problem is to envision non-New York State, U.S. citizens owning all of the state's indebtedness. Interesting, but not particularly dangerous.

   The more serious aspect of the problem is that the U.S.'s debt is owned by foreigners who may choose to convert those dollar denominated assets into other currencies, together with other unanticipated contingencies which may cause currency crises affecting the U.S. dollar and thus the entire world.

   This is why the U.S. and other countries should be planning NOW for the future transition to a single global currency.  With a single global currency, there will be no currency crises, no balance of payments problems, no requirements for international reserves and no currency risk, which would lead to a vast multi-trillion dollar increase in the value of worldwide assets.  In addition, the world would save approximately $400 billion annually in avoided foreign exchange transaction costs.

   These benefits are listed on the back cover of my recently published book, The Single Global Currency - Common Cents for the World .  If the economic experts at The New York Times  agree that the benefits of a Single Global Currency, managed by a Global Central Bank, within a Global Monetary Union would even come close to those listed above, shouldn't the prospects be investigated carefully?

   How to get there?  It's quite simple, realistic and doable.

   Just build upon what we already know about monetary unions in Europe, the Eastern Caribbean, Brunei/Singapore, Africa, and the upcoming monetary union among the six Arabian Gulf countries.

In some ways it would be easier than the development of the European Monetary Union among 12, soon-to-be 22, countries because the Europeans were not sure in 1999 that their plan would work.  Now we know, and it's not too soon to begin planning for a Global Monetary Union for most, if not all, the countries of the world.

 

28 May 2006.  Providence Journal interviews Paul Volcker, with his copy of The Single Global Currency - Common Cents for the World, in "At Brown, Volcker discusses U.N. probe"  by Lynn Arditi.

Excerpts of the article....

   Volcker had arrived from New York City shortly before noon yesterday to deliver the Stephen A. Ogden Jr. Memorial Lecture on International Affairs at Brown's Salomon Center.

The lecture, titled "Is the U.N. Up to Its Job?" was among the commencement weekend activities. Brown also is awarding Volcker a doctorate of humane letters....

   At the end of his lecture, Volcker received a standing ovation and a request by a graduating senior for his autograph.

Then he picked up his paperback copy of Morrison Bonpasse's The Single Global Currency, Common Cents for the World, put on his straw hat and prepared to walk.

 

18 May 2006. "COMMON CENTS" Review of The Single Global Currency - Common Cents for the World by Will Zachmann, in the Duxbury (Mass.) Clipper.

The review begins...

REALLY, IS IT NOT JUST COMMON CENTS?

      This is the key question posed by a just-published book advocating a single global currency managed by a Global Central Bank (GCB). Written by Duxbury native son turned Maine-iac Morrison Bonpasse (he now resides in Newcastle , Maine ) “The Single Global Currency -- Common Cents for the World” argues strongly that replacing the current proliferation of some 150-odd national currencies with a new single global currency would make the world more peaceful as well as considerably more prosperous....

 

15 May 2006. "Money changer  Morrison Bonpasse says a global currency could cure many of the world's economic woes — if economists only would accept the idea" in the Maine business bi-weekly, MaineBiz, by Andy Vietz.

The article begins...

   Morrison Bonpasse is no economist, and he's the first to admit it. The extent of the Newcastle resident's professional economic credentials? “I took Econ 101 at Yale forty 40 ago,” he says, sitting in the library of the old Maine farmhouse near the Sheepscot River that he shares with his wife, a former judge.

  But the 58-year-old lawyer, who made his name in this state by running Maine Staffing Services, an Augusta-based temp agency, during the late nineties, certainly has opinions about the global economy. And in late April he published a book on the topic — a book for which he has very large ambitions. “I believe this is the most important book from Maine since Rachel Carson's Silent Spring,” he says, referring to the 1962 masterpiece that has sold more than 2 million copies and is widely credited in founding the modern American environmental movement. “But that's if it sells. If it doesn't sell it'll be the sound of the tree falling in the woods that no one hears.”

26 April 2006.  The Single Global Currency - Common Cents for the World reviewed in Lincoln County Weekly (Maine) by Tatiana Brailovskaya, entitled: "The Dollar - By Many, Many Other Names".

The review begins....

   While national headlines focus on the spectacular — escalating global conflicts, political corruption, major social and environmental problems — a local author in Newcastle, Maine is advocating a dramatic solution to the rarely discussed, but massive costs plaguing the financial and monetary systems that run economies all over the world. In The Single Global Currency: Common Cents for the World, Morrison Bonpasse, the founder and president of the Single Global Currency Association, presents a convincing case that it is a moral imperative for the world's 191 nations to join together in a global monetary union and collectively save those economies trillions of dollars by adopting one common currency. Offering readers a comprehensive, but accessible journey through this multi-layered issue, Bonpasse calls for the world to set a goal of making the transition to a single currency by 2024....

26 April 2006.  "Channel 7 hosts 'Single Global Currency' discussion"

  The article begins...

DAMARISCOTTA (April 27): Morrison Bonpasse of the Single Global Currency Association (SGCA) appeared on Channel 7's "Art's Video Grab Bag" on April 20th to discuss the benefits of adopting a global monetary system. The association, founded by Bonpasse in 2003, seeks to educate people on the benefits of such a currency....

25 April 2006. "Is Single Global Currency Feasible?"  in Korea Times, by Morrison Bonpasse.

The Op-Ed piece begins....

   At an unrecorded moment about 2,500 years ago, people began trading with people who used different money, and two problems arose: How to value one currency compared to another and How to predict or control fluctuations in those values. Despite all the ensuing experience and analysis, the two problems persist and now must be solved.

    With current daily currency trading of $2.5 trillion, or $385 for every human on earth every working day, the cost of the failure to solve those problems has grown immensely.

    First, it costs about $400 billion per year just to perform all that trading. Second, as the world learned in the 1990's, there is a large risk of widespread currency failure; and the world's vast and growing global financial imbalances hang ominously over our heads. Third, the risk of such currency failure has led to a large undervaluation of the world's assets by approximately $36 trillion.

    As the late U.S. Senator Everett Dirksen might now say, if you take a $trillion here and a $trillion there, pretty soon you are talking about real money.

24 April 2006 "SGCA Conference set; book is published" in the Manchester Union Leader, New Hampshire. page C1, C3

  Morrison Bonpasse, president of the Single Global Currency Associatoin, today will announce publication of his book, "The Single Global Currency - Common Cents for the World."

   Bonpasse, of Newcastle, Maine, and the SGCA annually host the single global currency conference at the Mount Washington Hotel.

   The conference is held in the Gifford conference room at the Mount Washington, across the hall fro the Gold Room that was used 62 years ago for the signing of the 1944 Bretton Woods conference agreements that produced the International Monetary Fund.

   The fund is an international organization that oversees global financial systems, monitors exchange rates and balance of payments. It was created at the conference, which was called the United Nations Monetary and Financial Conference before becoming known simply as the Bretton Woods Conference.

   The SGCA's theory is that the world can save hundreds of billions of dollars, and eliminate currency crises and balance of payments problems, by forming a Global Monetary Union with a single global currency.  The book explains how the multicurrency foreign exchange trading system was developed about 2,500 years ago to enable people to trade with different currencies, but now is expensive, risky and obsolete as the world sees the exchange of $2.5 trillion per day, the SGCA said in a news release.

   The book is available from Amazon.com and directly through the Single Global Currency Association at http://www.singleglobalcurrency.org. It is the only book in the world, so far, that is entirely devoted to this subject, the SGCA said.

   The SGCA is in its third year of an 18-year effort to achieve a Global Monetary Union by 2024, the 80th anniversary of the Bretton Woods Conference.

                                              +++++++

  The third Single Global Currency Conference will be held at Bretton Woods July 20-21. For information call (207) 586-6078 or log on to www.singleglobalcurrency.org.

23 April 2006  "SA wants rand adopted as common currency for SADC" by ANDnetwork.com (African News Dimension).

The article begins...

   South African Reserve Bank head of international relations, Mr Mshiyeni Belle, said South Africa was presently proposing that its rand be used as the common currency for SADC member states as the region comes up with its own currency.
    He told business journalists from SADC member states here that the SADC Committee of Central Bank Governors (CCBG) was presently working hard to harmonise their systems towards meeting this vision although the process is still at its elementary stages and rather slow.
    The Committee of Central Bank Governors was established in August 1995 as part of the Finance and Investment Sector of SADC.
    Since its inaugural meeting on 24 November 1995, the Committee of Governors has proposed several projects designed to contribute to the process of regional economic co-operation and integration.

  “We feel that as we move towards a common currency for the region, the easiest way to go about it will be to endorse the South African rand although this is a political matter which lies with the Heads of States of the member states,” he said.
    He said the SADC member states were taking a cue from the EU model where the trading bloc had to first convert to the German Deutsche Mark before coming up with the euro.
Asked to comment why he thought most SADC members were likely to accept the rand as a transitionary common currency for SADC, Mr Belle said although there were challenges towards this, the South African rand is widely accepted in most countries in the region.

19 April 2006  Newcastle Man Authors Global Currency Book Lincoln County News, Maine.

   The Single Global Currency Association is publishing the first edition of the book, The Single Global Currency - Common Cents for the World.

    Written by Morrison Bonpasse of Newcastle, the president of the association, the book shows how the world can save hundreds of billions of dollars, and eliminate currency crises and balance of payments problems, by forming a Global Monetary Union with a Single Global Currency. Despite its 424 pages and 720 endnotes, but with only one graph, the book is intended for the people of the world, as well as academics.

    The book explains how the multi-currency foreign exchange trading system was developed about 2,500 years ago to enable people to trade with different currencies. That system has become far more sophisticated and larger in the meantime, and sees the exchange of $2.5 trillion per day; but it is very expensive, risky and obsolete.

    Said Bonpasse, "With the creation and coming expansion of the European Monetary Union, the people of the world can now see how to create a Global Monetary Union with a Single Global Currency. Stable money has been a goal for centuries, and now it's within reach."

    The book concludes that it is now time to replace the multicurrency system with a Single Global Currency which will eliminate the annual $400 billion transaction costs of that trading. Also to be eliminated will be the need for foreign exchange reserves, and the international debate about the fairness of countries' exchange rates. Gone, too, will be the currency risk which now depresses asset values, especially in underdeveloped countries. Without such currency risk, worldwide asset values are projected to increase by about $36 trillion, which will fuel an annual increase in world GDP of about $9 trillion.

    A Single Global Currency is no longer a utopian dream, but a realistic projection of what has been learned from existing monetary unions, especially the euro.

    The world needs to set the goal of a Single Global Currency by 2024, to be managed by a Global Central Bank, within a Global Monetary Union, thus establishing a "3-G" world. And begin planning - now. The book contains chapters about political and educational action in support of those goals including Chapter 7, "How to Get There from Here."

    Said Bonpasse, "Please read this book and help save the world - trillions."

    The book is available from Amazon.com and directly through the Single Global Currency Association at www.singleglobal currency.org and participating bookstores.

 

7 April 2006  "Why Join the Euro - An overview in relation to the Czech Republic, Poland and the UK."  by Louis Mann from 999Network.

The article begins...

   For Poland and the Czech Republic it is not a question of should they join the euro, but rather when will they join the euro? This is simply because both countries agreed as ‘part of the package' of joining the European Union (EU) that they would also adopt the euro.

   The Czech Republic is set to join in 2010, but Poland has not yet set a target date, although they are implementing policies in order to meet the criteria for joining set out in the Maastricht Treaty.

Britain is still undecided, but is not under the same pressure from the EU as adopting the euro was not part of the deal when Britain joined the EU in 1973. Nevertheless, there are significant benefits in joining European Monetary Union (EMU), which imply the strengthening of the economies which join. However, there are costs too and, as we shall see below, the costs and benefits depend on the economy in question.

20 February 2006.  Bank for International Settlements Economist urges fewer international currencies.  In Telegraph, U.K. article by Edmund Conway, "UK policy blamed for soaring debt levels"

Excepts from the article...

    But the powerful Bank for International Settlements (BIS) has now voiced grave doubts about the policy and called on politicians to begin debating an overhaul of the current global economic system.

    In another radical move it has also suggested ditching many national currencies in favour of a small number of formal currency blocks based on the dollar, euro and renminbi or yen.

The BIS, which is controlled by a coalition of central banks and helps oversee the global financial system, warned that by pushing interest rates so low, inflation targeting has encouraged the public to take on more debt and has accelerated a flow of money out of the world's major economies....

    Mr White also suggested ditching the current system of floating currencies and replacing it with "a small number of more formally-based currency blocks". He claimed that because of the record rate at which Asian central banks have been buying dollars in order to keep their currencies artificially low, "we do not really have a freely floating rate system"...

 

19 February 2006, "The Case for Fewer but Stronger Currencies"  by Daniel Gross, New York Times.

The article begins:

  "OUTSOURCING isn't just a one-way street on which rich countries shift jobs overseas. In recent years, some developing countries have contracted out the work of setting monetary policy to the United States. Ecuador and El Salvador, in 2000 and 2001, respectively, abandoned their own currencies, adopted the dollar and placed their monetary policy in the capable hands of Alan Greenspan , then the chairman of the Federal Reserve.

  When outsourcing involves manufacturing and software programming it is often endorsed by economists and condemned by populist political leaders. So, too, is the tactic of outsourcing of monetary policy — known as dollarization, or euro-ization. After all, noted Robert E. Litan, senior fellow at the Brookings Institute, "currencies are symbols of national sovereignty, and countries are reluctant to give them up."

  And yet nations can impose enormous costs on their citizens when they take extraordinary efforts to maintain independent currencies. "Devaluations of currencies cost people their savings and bring on rapid inflation," said Benn Steil, a senior fellow at the Council on Foreign Relations and co-author with Mr. Litan of "Financial Statecraft" (Yale University Press, 2006). The two argue that the globe's mélange of 200-plus currencies, backed only by the faith of investors, is inefficient and dangerous. Many emerging economies, they say, would be well advised to swap their currencies for strong, stable, widely used ones like the dollar or euro...."

In response, the Single Global Currency Assn. wrote to Daniel Gross the following email:

Dear Mr. Gross,

   Thank you for today's column. Indeed, the case for fewer currencies is strong, and the logical conclusion of the trend is a single global currency. The remaining questions are When? and How rough will the transition be?

   I'm writing a book, "The Single Global Currency: Common Cents for the World" which builds upon the work of the economists you cited. To several of them, I've sent copies of the current manuscript, which is attached. Publication is planned for early April.

   With a single global currency, there will be no current account deficits and no currency crises and no need to retain foreign reserves and no transaction costs for foreign exchange. I estimate that the world will save approximately $400 billion per year in transaction costs and when the single global currency is implemented, the value of the world's assets will increase by $36 trillion.

   Dollarization is one route, but its major disadvantage is political as Barry Eichengreen observed in your article. As the Eurozone grows, and as other monetary unions are created, as in the Arabian Gulf, the U.S. likely will feel pressure to formally expand the formal use of the Dollar. One possibility, for example, is monetary union with Canada and Mexico, and with that will come seats on the important Federal Reserve Committees. Many economists have considered such a union.

   Perhaps a future column can explore the prospects for a single global currency? Can I send you a copy of the book upon publication? We won't be sending "advance" copies, but I could send a final .pdf file about 20 days before publication, if you would like.

   If you have the opportunity to scan or read the attached copy, which is about 90% done, I'd be interested in your comments.
Very truly yours,
morrison
morrison bonpasse

16 February 2006, The Wikipedia entry for  "Global Currency" says,

   "A global currency , in the form of a modern currency produced and supported by a central bank, like euro and dollar , will never be made. There are many fundamental problems that simply cannot be fixed. Both political problems and economicy-theoretical problems."  This entry was last updated on 15 February 2006.  It's expected that this entry will be modified as visitors respond to the writers of Wikipedia that it's wrong.

   

14 February 2006, "One World, One Dollar" Forbes Magazine, by Michael Maiello.

The article is primarily an interview with the premier champion of the single global currency, Nobel Prize winner, Robert Mundell.  An except below...

   "One of Mundell's Utopian hopes is that cooperation on currency would lead to international cooperation on other issues and enhance prospects for world peace. Having a common currency, he says, 'is like a kind of club and there are rules needed to keep it going. That has a lot of spillover effect and becomes a catalyst for other kinds of things.' "

7 February 2006.  "A common currency for East Asian nations "  by Raju Sanghwi, in India Daily.

    The world went a step ahead towards a common global currency. It is just a matter of time before the world has one currency.

    The Eastern Asian nations are going to have a common currency.

    According to media reports, the Asian Development Bank will issue an Asian currency unit (ACU) in March in an effort to boost economic cooperation between East Asian nations, People's Daily reported Feb. 6. Unlike the euro, the ACU is not a physical currency, but rather it is a form of virtual money, designed to measure the stability of currencies in the region and further boost regional economic cooperation.

17 January 2006. "The Developing World Should Abandon Parochial Currencies" by Benn Steil, in Financial Times.

An excerpted paragraph....

   Today, the best option for developing countries intent on globalising safely is simply to replace their currencies with internationally accepted ones, namely the dollar or the euro. Latin America 's star economic performer in 2004 was politically volatile Ecuador , which grew at 6.6 per cent with 2.7 per cent inflation, the lowest in 30 years.. Ecuador dollarised in 2000. If the European Union were wise, it would change its policy on extending the euro entirely and offer to assist Turkey and others in adopting it immediately.

26 December 2005.  "IMF offers to help push forward GCC monetary union"   from the Lebanon Daily Star.

The article begins...

     "ABU DHABI: The International Monetary Fund (IMF) has offered to help the GCC countries to push ahead with their monetary union and proposed the creation of a body similar to the European Union (EU) Eurostat Office to support this landmark project.

In a recent statement on the GCC's historic agreement to create a monetary union by 2010, the Washington-based IMF said it was optimistic about the success of the project on the grounds member states have made substantial progress in this effort and already have what it described as good macro-economical fundamentals."

[The good news is that the IMF supports the creation of the GCC monetary union.  Will it support others?  When will it address the need for a single global currency?]

 

15 December 2005.  "GCC all set for monetary union"  from the Bahrain Tribune.

The article begins...

     The signs for monetary union in the Gulf Cooperation Council (GCC) states are extremely good, according to a region-wide survey by Dubai-based Gulf Research Centre (GRC) published yesterday, but there remain some concerns about the speed of preparations on a macro economic level.

   Business is overwhelmingly in favour of the move arguing it will not only be good for business but also for the GCC economy as a whole.   

   The survey findings offer GCC policymakers mixed blessings because while businesses' attitudes are predominantly positive - in stark contrast to Europe's experience in introducing the euro - there remains concern about clarity on the issues and calls for more assistance in preparing monetary transition.

   The survey also contacted policymakers, economic analysts and academics who were split on the level of preparedness.....

11 December 2005.  George F. Will's modest endorsement of the euro in Newsweek article, "2005's Kind of Progress"...

He wrote in his summary of the year...

     "The 482-page European Union 'constitution' was rejected, but the common currency marches on in white boots."

 

6 December 2005.  Poll shows English-speaking Asians have substantial support for monetary union, in article "ASEAN leaders for integrating economies, societies"  in NewKerala.com.

The article begins...

   Singapore: Leaders of some ASEAN countries feel the need to integrate their economies and societies to face the challenges posed by the growth of India and China.
    The Association of South-East Asian Nations (ASEAN) would need to reposition itself to play a role in a changing world, said Singapore Foreign Minister George Yeo. The rise of China and India had given this move to integrate their economies greater impetus, he said.
    An integrated region "will be more stable and ... allow ASEAN to compete", said Leo Suryadinata, a senior research fellow at the Institute of South Asian Studies.  "Otherwise, it will be difficult for ASEAN to face globalization," he said.
    Meanwhile, nearly half of people polled in some ASEAN countries backed a common currency despite wide economic disparities among the member countries.
    They want the pace of integration speeded up as ASEAN identity becomes stronger, said The Straits Times Asia Poll.
The findings signal a willingness on the part of people to accept closer integration of their economies and societies, recommended by some ASEAN leaders.
    More than 1,000 English-speaking urban residents were polled in Thailand, Indonesia, Malaysia, the Philippines, Vietnam and Singapore. ASEAN also includes Brunei, Laos, Cambodia, Vietnam and Myanmar.
    Over half of those queried said they could speak the language of another ASEAN country, 44 percent had travelled within the region, and an equal percentage expected to do so within the next six months.
    Five in 10 of those surveyed were willing to invest in another ASEAN country.
    A common currency was supported by 45 percent. Thirty-eight percent rejected the idea, and the rest were undecided.
Thailand emerged as the top destination in ASEAN for tourism, followed by Singapore.
"The results are an eye-opener," The Straits Times quoted former ASEAN secretary-general Rodolfo Severino as saying.
"The people are clearly ahead of their governments. While leaders and officials are still debating the ASEAN identity issue, people-to-people links have grown over the years."
[See related article in the People's Daily, China, "Survey: ASEAN 'common currency' gaining support"]

 

4 December 2005.  "Asia: Building Blocks: At next week's East Asia Summit, there will be talk of creating a regional common market and, eventually, a single currency. Are those plausible ideas or a pipe dream?"   by Christian Caryl, Newsweek International

The article begins.....

Dec. 12, 2005 issue - Just imagine: it's a sunny winter's day in 2045, and you're arriving in Bangkok airport on the 1:15 from Shanghai. The flight is considered internal, so there's no customs check; you can keep that dark red Asian Union passport in your pocket. No need to pick up any cash, either—you've still got plenty of yuen (the single Asian currency) left over from your previous stops, including Tokyo and Seoul.....

November, 2005, "Everyone should pay in Mondos?"  An interview with Jose Cordeiro, in column by Marco Visscher in ODE Magazine, Netherlands

What's a mondo?

  “It could be the name of a new global currency that everyone on this planet could use.”

 Why would we need one?

  “It makes any national economy more reliable, because there will be no more uncertainty about currency rates, rates of return, interest rates, devaluation, etc. Did you know that every day $1.8 trillion U.S. is traded internationally? We spend billions of dollars on speculation and transaction costs, on a daily basis! One global currency would mean a lot of cost-saving.”

These do not sound like major global problems that need immediate fixing.

  “Countries with more fluctuation in their currencies show less economic development, about two percent less. If we can introduce a global currency, poor countries wouldn't pay so much to keep these national currencies, and their economies would grow more. Believe me, the poor will benefit more from a single global currency.”

 Don't you think people are just attached to their old coins and bills?

  “In Africa , Latin America and parts of Asia —which is to say, most of the world—people would love to give up their national currency and replace it with the dollar, or the euro, or the yen, because they don't trust their own national currency.”

So what are we waiting for?

  “For national governments to give up their privilege to print money whenever they need some extra money. And for the insight that it's just stupid to have all those different currencies. Why not then have a currency for your own village, or even for your family? Maybe you'd like one for yourself! That would be a disaster, right? It's simply more convenient to have a single currency for everyone. While all these different currencies made sense at a time when there wasn't so much traveling and when economies were not as integrated as they are now, it's simply inevitable that we need more common standards in a globalized world.”

José Luis Cordeiro is an economist who teaches at the Central University of Venezuela and consults with various companies and organizations. He's founder of the Venezuelan chapter of the World Future Society, and sits on the board of advisors of the Single Global Currency Association.

 

28 November 2005.  "Abandoning The Euro Would Have High Cost, Says S&P Report"   from Axcess News.

The article begins....

   (AXcess News) New York - According to a recent report by Standard & Poor's, abandoning the Euro would have high costs for some sovereigns and adversly affect their credit ratings. If they favored going back to national currencies it could lower their credit ratings two to four notches, the U.S. rating agency said.

   The report entitled "Breaking Up Is Hard To Do: Rating Implications Of EU States Abandoning The Euro" found that lower-rated EMU sovereigns with weaker fiscal profiles would diminish their creditworthiness in the unlikely event that they left Economic Monetary Union.

[See also related report from Moody's about risk and the Eurozone.

"Moody’s highlights risks for the European Union" from the "Financial Mirror)

 

26 November 2005.  "Slovakia moves closer to adopting euro by linking up"   from the Shanghai Daily.

The article begins....

     SLOVAKIA became the seventh of the European Union's newest members to move closer to adopting the euro by establishing formal links with the common currency, a move the central bank said will help keep the koruna stable.

    The EU said in a statement from Brussels it admitted Slovakia to its exchange-rate mechanism effective from today. The Slovak koruna will be pegged at 38.4550 to the euro under the regime, compared with Friday's close of 38.47.

    The peg starts a test of currency stability before euro adoption, which Slovakia is targeting in 2009. The government chose to enter the exchange-rate mechanism earlier than the original plan for the first half of 2006 to make the koruna less vulnerable to movements in other east European currencies, the central bank said.

    "The 2009 target is still in place, but we view the entry to the mechanism as another way of how to ensure the stability of the exchange rate," Governor Ivan Sramko said in Bratislava, the Slovak capital, on Saturday.

    The mechanism, one of five tests for would-be euro members, requires each country to keep its currency within 15 percent of a central rate to the euro for two years without devaluing....

 

22 November 2005.  In the article, "Make hay while the sun shines, says Mboweni", South African Reserve Bank Governor Mboweni announced goal of African Monetary union by 2025, in the Mail & Guardian.

Excerpts...

   Rather than worry about how to get growth going, people should be worrying how to make the most of a South African economy that is "pumping", South African Reserve Bank (SARB) Governor Tito Mboweni said on Monday....

    "The central bank governors of the African Union have a target of achieving monetary union by 2025. This target has the tacit approval of most governments, but in order to achieve that union, we must agree on convergence criteria, such as fiscal deficits to GDP ratios and low inflation rates," Mboweni said.

21 November 2005.  "Hungary Bank Official Urges on Euro"  from MSN Moneyat MSN.com

The article begins...

    BUDAPEST, Hungary (AP) - Hungary should implement reforms and adopt the European Union's common currency as soon as possible, the country's central bank president said Monday.

    Hungary's growing budget deficits have cast doubts on its plans to switch to the euro in 2010. EU officials have said Hungary could lose access to the bloc's infrastructure funding if it fails to take advice on its economy.

    National Bank of Hungary President Zsigmond Jarai said that while it was not impossible to reach the 2010 target date, the 2005-06 state budgets showed no signs that the government was planning essential reforms.

    "I believe we are increasingly headed in the wrong direction," Jarai was quoted as saying by state news agency MTI. "The further we are from the goal, the bigger the task will be and the bigger the needed adjustments."

    The government has announced a 2006 budget gap target of 6.1 percent of gross domestic product, compared with a 3 percent EU limit for countries using the euro. The central bank has estimated a gap of 8.9 of GDP for next year, while the EU forecast is 6.7 percent.

 

18 November 2005.  Korea Exchange Bank Chairman urges Asian Common Currency, among other reforms in "Citibank CEO Warns of 2nd Asian Crisis Due to Slow Reforms"   in Korea Times by Kim

Sung-jin

excerpts....

   Citibank chairman William R. Rhodes Friday advised the Asian economies to resume efforts on reforming the financial sector, warning the slow pace of reforms may trigger another financial crisis in the region....

    Korea Exchange Bank chairman Robert E. Fallon pointed out that Asian savings that flow into bank deposits is an opportunity. This flow will either let bank deposits migrate to mutual funds or compel bank deposits to go from low demand loans to funding enterprises via venture capital, mezzanine finance or private equity...

    Fallon proposed establishing a common currency in the Asian economic bloc, billed an as one solution to fostering the Asian financial market...

    Institute for International Economics senior fellow Edward M. Graham backed Fallon¡'s suggestion.

    Graham said the emergence of a common currency would bring about a positive development in the Asian bond market, which is underdeveloped compared to the European bond market.

 

17 November 2005.  SAARC Business meertings: "Intra-regional trade can touch $14 billion: PM"  from Newindpress.com

Excerpts relating to a regional common currency for the South Asian Association for Regional Cooperation....

   "....NEW DELHI: Interlinkages between the comity of SAARC nations at all levels is of utmost significance to increase intra-regional investment, prime minister Manmohan Singh said while inaugurating the SAARC Business Leaders Conclave organised jointly by FICCI and the SAARC Chamber of Commerce and Industry (SCCI) here on Thursday...

    ...Macky Hashim, president, SAARC Chamber of Commerce and Industry, Sri Lanka, outlined the objective of the conclave and stated that it is to emancipate SAARC of poverty by making it the fastest growing economic region in the world and to prepare member states for a common South Asian Market.

    Among other objectives are to have a common currency, to make a South Asian Union like the EU, to develop an enabling environment for higher intra-regional investment, to promote South Asia as a common investment destination for the rest of the world and to increase employment opportunities within the region."

 

7 November 2005. "Single currency will climax Asia's economic integration" In a column echoing his 25 October speech, below, in Manila,   Haruhiko Kuroda restates his support of an Asian common currency. He is the head of the Asian Development Bank.

Excerpts....

  ...The key to continuing and expanding this growth and lifting more people out of poverty lies in regional cooperation and integration. Only through working together can Asian countries unlock their vast economic potential...
  I have taken a somewhat different view and have argued that our long run objective should be the creation of an Asian monetary union with a single currency.

  I continue to believe that Asia in general, and East Asia in particular, should strive to form a monetary union in the long run.

6 November 2005. "Middle East Takes Center Stage In Currency Markets"

excerpts...

LONDON — The Middle East could set the tone for currencies in 2006 as traders mull what the region will do with the swelling dollar-denominated oil revenues it has accumulated over recent months. 
   Any hint that key accounts in the region could seek to offload dollars and shift into other major currencies like the euro could put the greenback under pressure after its recent bull run....

   The International Monetary Fund's recent semiannual World Economic Outlook Report estimated that Opec's current account surplus could reach $337 billion by 2006, compared with $362 in Asia.

   That firmly puts the Middle East in the same league as Asian central banks - heavy hitters in the currency markets because of their vast dollar holdings. Traders and analysts routinely scrutinise every word from Asian central bank officials for signs of currency skittishness, and the markets can move dramatically on apparent shifts in sentiment.

 

4 November 2005. "IMF Article IV consultation with Estonia."

The report begins with "Background"....

  Estonia has made extraordinary progress following independence. Sound macroeconomic policies and far-reaching structural reforms have resulted in the successful establishment of a market economy and EU membership. The country is witnessing a remarkable convergence in real terms to EU levels, with purchasing power parity per capita income increasing to 46 percent of the EU15 level. Estonia has also achieved significant nominal convergence, meeting all of the Maastricht criteria, save for inflation. Estonia entered ERM II in late June 2004, unilaterally maintaining its peg to the euro with a currency board arrangement, and is aiming at early euro adoption.

 

31 October 2005. "Turkey is close to meeting Maastricht criteria, says report" From Turkish Daily news, online

The article begins...

   Turkey's economy is benefiting from improved financial and political stability and the country is moving towards meeting the Maastricht criteria, the conditions required to join the European Monetary Union, according to a report issued by Morgan Stanley economist Serhan Çevik.

    Along with a 30 percent increase in real GDP in the past four years, Turkey has succeeded in dropping inflation from an average of 77.5 percent in the 1990s to the single digits on a sustainable basis, creating a positive feedback loop to growth dynamics.

 

27 October 2005. "Bernanke on the Record" from Business Week

Excerpt on the Euro...

     Bernanke holds a positive view of the eurozone's experience with a single currency. Look at this from "The Euro" (June, 2004): "... [I]t seems safe to conclude that the common currency has had and will continue to have large benefits for European finance. At a minimum, the single currency eliminates exchange-rate risks that exist when securities are denominated in different currencies. The single unit of account seems also likely to reduce transaction costs and eliminate a portion of the fixed costs involved in issuing similar securities in multiple currencies. These factors are already serving to moderate home bias in borrowing and lending, leading to larger, more liquid, and more diversified financial markets."

 

27 October 2005.  "Diplomatic momentum of the Pacific Island Forum" from "The National", Port Moresby, Papua, New Guinea.

The article begins...

THE Pacific Island Forum (PIF) meeting now underway in Port Moresby denotes the beginning of a more coherent approach to regional integration.
Issues on the table include a Pacific Parliament, common currency, economic integration, a Pacific treaty of compliance to principles and obligations and common defence.

26 October 2005. "Asia should move forward to monetary union: ADB"  from www.xinhuanet.com

  MANILA, Oct. 26 (Xinhuanet) -- Asia should achieve the monetary union with a single currency in long run, Asian Development Bank President Haruhiko Kuroda said Wednesday.

    During a speech at a forum, Kuroda said Asia in general, and East Asia in particular, should strive to form a monetary union in the long run.

    Although as the fastest growing region in the world for several decades, Asia still shows an enormous disparity in income levels, living standards, and socioeconomic conditions as well as homes almost two thirds of the world's poor, Kuroda said.

    "In a region of such dynamic growth, this is simply unacceptable," he added.

    The president said that given the magnitude of intra-regional trade, even small exchange rate misalignments can disturb trade and investment flows and create trade friction among the region's economies. "This indicates the need for intra-regional exchange rate stabilization in the years to come, and ultimately a single currency."

 

20 October 2005. "Estonia's Ansip Says Euro Entry Will Accelerate Economic Growth "   by Alistair Holloway at Forbes.

The article begins...

Oct. 21 (Bloomberg) -- Estonian Prime Minister Andrus Ansip said adopting the euro in 2007 will add 1 percentage point a year to economic growth, spur foreign investment and boost tourism.

The former Soviet republic on the Baltic Sea, which joined the EU in 2004, will switch to Europe's common currency in 14 months with Slovenia and Lithuania. The local currency, the kroon is locked in the exchange-rate mechanism, the system that tests currency stability before the changeover....

 

18 October 2005. What Non-Governmental Organizations can do to change the world: "Group: Chad, Bangladesh are most corrupt" from the Seattle Post-Intelligencer - News of Transparency International

The article begins...

LONDON -- Bangladesh and Chad were ranked most corrupt on a global watchdog group's annual list of corruption levels in 159 nations, released Tuesday. At the other end of the scale, Iceland was ranked least corrupt.

Corruption undermines efforts to eradicate poverty, with graft by public officials hampering attempts to raise the living standards of the poor, Transparency International said.

 

18 October 2005. "Global Power Shift from West to East in Making" by James F. Hoge, in the Seoul Times, reprinted from the magazine, Foreign Affairs.

excerpts...

  Other Southeast Asian states are steadily integrating their economies into a large web through trade and investment treaties. Unlike in the past, however, China — not Japan or the United States — is at the hub.

  The members of the Association of Southeast Asian Nations (ASEAN), finally, are seriously considering a monetary union. The result could be an enormous trade bloc, which would account for much of Asia's — and the world's — economic growth.

[emphasis added]

16 October 2005. Klaus Liebscher: "The European monetary union and the euro - a contribution to international stability"  from the Bank for International Settlements

Excerpt...

The firm commitment of the euro system – as the European Central Bank and the 12 National Central Banks from the Member States of the euro area are called – to pursuing price stability as its main objective remains a key factor behind market confidence in the euro as a global and stable currency. Since the euro system became responsible for monetary policy in 1999, the primary objective of maintaining price stability has been successfully pursued. Inflation volatility has stabilized – the average inflation rate being around 2% over the past years – in spite of major inflationary shocks and although oil prices have quadrupled and the economic environment is difficult right now, inflation expectations still remain low. This reflects the high confidence of the public as well as the financial markets in the euro. European Union in order to ultimately adopt the euro, this has so far led to an impressive record of macroeconomic stability as well as exchange rate stability on their way to EMU.

 

12 October 2005. "From the euro to the globo"  by Hamid Golpira, Tehran Times.

Concerned about privatization of central banks, the article begins...

   Globalization is leading to a global economy with one world currency. It's not clear what the name of this global currency unit will be, but perhaps it will be called the globo.

   The adoption of the euro by 12 European Union states is part of the process of creating the globo. The U.S. dollar and the euro are currently the two strongest hard currencies in the world. They may eventually be merged to create the globo...

 

12 October 2005.  From the United Nations, 2005 World Economic and Social Survey: "UN report says donors should focus on quality of aid to foster development"

Excerpt...

  In addition, international aid donors need to better manage the “strongly cyclical patterns of their financial flows” that can wreak “harmful economic side effects” on developing countries,” and countries should borrow in their own currency so that they won't be adversely affected by huge variances in world currency exchanges, he [Mr. Jose Antonio Ocampo, United Nations Under-Secretary-General for Economic and Social Affairs] added.  [emphasis added by SGCA]

 

5 October 2005. "Campaign for creation of South Asian Economic Union intensified"   from XINHUA.net

Excerpts...

DHAKA, Oct. 4 (Xinhua) -- A number of member states of the South Asian Association for Regional Cooperation (SAARC) will intensify campaign for creation of a South Asian Economic Union in the region during the 13th SAARC summit in Dhaka next month...

  Bangladesh, however, expressed the view that there are certain steps to be implemented before formation of the economic union. Those steps are establishment of a free trade area, customs union, monetary union and a common market...

4 October 2005.  "Renewal of African Financial Systems for Efficiency Recommended " from the Addis Ababa Tribune.

Excerpts...

   The Acting Secretary General of the OAU, Ambassador Lawrence Agubuzu has called for the renewal of African financial systems in order to better mobilize for greater and efficient allocation of financial resources on the continent.

   The Acting Secretary General also stated that the efforts were in conformity with the necessary measures for the establishment of the African Monetary Union which were provided for in the treaty establishing the African Economic Community, and which were further underscored at the extraordinary summit of the Heads of State and government of the OAU held in Sirte, Lybia, last year. The treaty inter-alia called for the establishment of African economic community, the African Monetary Union and the African Central Bank which are expected to underpin the African Union, whose constitutive act was signed during the recent summit in Lome, Togo. ...

 

30 September 2005. Australia's Federal Labour Party announces  "Toward a Pacific Community"  initiative, which includes recommendation for Common Currency: the Australian dollar.

Specifically...

    A regional commitment to inflation targeting, and assistance to

    those Pacific countries that may wish to adopt the Australian

    dollar.
[For another view, see ABC Online, "ALP calls for EU-style Pacific community" with an excerpt...

The paper calls for a treaty, setting up a 'Pacific Community', similar to the European Union, that would include a Pacific Parliament, a special Court, and see the Australian dollar adopted as the common currency for Pacific Island nations.]

29 September 2005.  Letter to Editor, South China Morning Post: "Bermuda Lawn"  by Tony Henderson of Hong Kong.

It's critical of the Single Global Currency, but, Excerpts....

  Now the merits of the single universal currency when paraded for consideration are very clear to the logical mind: no currency speculation, no commissions on currency exchanges, no currency black market, no inflation-deflation worries, steady interest rates. Or so it might seem!

  A further merit of any total monetary union is touted along the lines of the value of the currency being separate from the economic health and governing finances of any one member country and in fact being separate from the general state of world health.

  [The Single Global Currency Assn. responded with a "Letter to the Editor" that begins, "In response to Tony Henderson's 29 September letter about the single global currency, I agree that multiple currencies are charming, but so are the postal stamps of the countries of the world.

The major problem with having multiple currencies is that the system costs the world hundreds of billions of euros a year, and the risks of another regional currency crisis, if not a world currency crisis, loom large."]

29 September 2005.  "A common currency: Maybe now's the time"  by Terence Corcoran in the Financial Post (Canada)

Excerpts....

...  Except, of course, for all the people who are thinking about the stupidity of the impact of our floating exchange rate on the economy. That would include Jim Stanford, chief economist at the Canadian Auto Workers, and a slew of other business people and economists who are pointing to risks of currency-induced economic turmoil....

  ...There is no particular reason people should be laughing at the idea of a common Canada-U.S. currency. The Dutch disease is a product of a separate currency regime and shifting currency values. How to avoid it? A common currency would provide part of the answer....

  ... It would be foolish to minimize the complexity of currency reform and common currency issues. But wild swings in the loonie, recorded in the chart above, point to a currency regime that's as much of a problem as it is a solution. The dollar could crash if energy prices shifted directions next year, forcing another series of dramatic economic adjustments. None of this is funny.

 

28 September 2005. "Credit where credit is due"  by 'Buttonwood', in the Economist.

Interesting article about bond prices and debt in a monetary union, the EMU, whre one paragraph states...

It was not always thus, as the chart below shows. Before monetary union in Europe, the yield on the Italian government's ten-year bonds could be more than 650 basis points higher than that on Germany's, over which the rigorous Bundesbank kept watch. That gap narrowed sharply when currency risk disappeared, a big new euromarket reduced trading costs, a single central bank took charge of interest rates and monetary membership rules promoted unwonted fiscal discipline.

 

27 September 2005. "EA bourse will have to await a common currency"  By ESTHER NAKKAZI in "The East African"

The article begins...

  Plans to set up a regional stock exchange for the three East African countries of Uganda, Kenya and Tanzania by 2007 have been deferred until the region realises a regional monetary currency.

Officials from the Capital Markets Authority in Uganda said last week that the joint stockmarket for the region was unlikely to become operational until the East African Community has a single currency, which is envisaged to be in use by 2010.


24 September 2005.  "US in call for reform of IMF voting"  by Andrew Balls, Financial Times.

The article about allocation of IMF governance begins...

The US on Friday called for reform of the International Monetary Fund's weighted voting system and appeared to hint at the need for a single European Union seat on the IMF's board.

 

22 September 2005. "Is Asian Common Currency Feasible?"  By Yoon Deok-ryong in The Korea Times.

An excerpt reads....

Due to the given restrictions in establishing a regional exchange rate system, an Asian common currency could be another consideration. Though a common currency usually comes at the final stage of financial and monetary cooperation to substitute national currencies, it could be introduced at the beginning of the integration process as a reference money and take the role of numeraire.

19 September 2005. "GCC: Full steam ahead to monetary union"  From AME Info FZ.

The article begins....

The six members of the Gulf Cooperation Council (GCC; consisting of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE)) took a step closer to monetary union last week as central bankers agreed the text associated with fiscal and monetary targets agreed in March.

 

13 September 2005. From Malta - "NECC launch website on changeover to Euro"  by Sarah Suda, Di-Ve News

  VALLETTA, Malta: The National Euro Changeover Committee (NECC) has launched a provisional website with the aim to inform the public about the changeover to Euro.

  This website, is part of the initial stages of the campaign of the NECC to diffuse information on the European Monetary Union and the Euro. The site also contains information on the process leading to the adoption of the euro and the strategy adopted by Malta to reach this goal.

9 September 2005.  Joseph Stiglitz does not support Asian common currency. See article: "Economist warns of slowdown of SE Asian economies as interest rates rise" in Peoples' Daily, Online.

Excerpts...

  ...On the issue of a common currency for Asia, the former World Bank chief economist refused to give support for the idea, but encouraged more monetary cooperation in the region like forming an Asian Monetary Fund.

  "The issue of a common currency requires a lot of similarities between the countries because when you have a common currency, you give up an instrument, you give up an independent monetary policy, " he said, adding that Asia is not ready for it....

 

8 September 2005.  On coordinating fiscal policies within a monetary union: "Eurozone states urged to liaise on budgets" by Ralph Atkins and George Parker, Financial Times.
The article begins...

Eurozone countries could boost the effectiveness of the currency union by unveiling their national budgets around the same date and by using the same economic forecasts, according to a member of the European Central Bank's executive board....

 

8 September 2005. "New GCC common currency on target"

by Tariq Konji, Gulf Daily News, Bahrain

The article begins...

  THE GCC may have a common currency much earlier than the 2010 deadline, according to predictions by a top bank. Calyon Corporate and Investment Bank, part of the Credit Agricole Group, believes the GCC central banks have all the tools in place to let the project move ahead sooner than initially anticipated.

  But the real issue is whether or not the currency will be pegged to the US dollar, according to Gulf capital markets executive director and treasurer Elyas Al Gaseer.

  "We believe that the GCC currency will be launched sooner than initially planned and that the Saudi Arabian Monetary Agency will take the lead because it is the best equipped bank to do so. It has all the supervisory tools in place," he said.

  "We also believe that it would be wrong for the currency to be pegged to the dollar. Instead, the dollar peg should be replaced with a trade-weighted basket of currencies."

6 September 2005. Speech: "Malcolm Knight: Challenges to financial stability in the current global macroeconomic environment " Speech by Malcolm Knight, General Manager of the BIS, at the International Monetary Fund in Washington DC

Excerpt...

  "It is hard to escape the conclusion that the world today is characterised by an unusual, perhaps unprecedented, combination of financial imbalances , both domestic (internal) and international (external). ..

  As to external financial imbalances , the current account deficit of the United States has been trending upwards as a percentage of GDP for over 20 years, and now stands at nearly 6% of GDP. Moreover, the net service account has finally shifted into negative territory, partly reflecting the fact that the United States, the world's richest country, is now also its biggest international debtor....

  But this brings us to the third question. What harm might be done should any or all of these imbalances unwind? One possibility could be a sudden crisis in the financial system, though where and when an overextended system might fail is impossible to predict. I think another possibility is much more likely. If the overseas demand for US dollar assets were to slow markedly, for whatever reason, the US dollar would depreciate, world interest rates would rise, and the prices of a number of classes of financial and real assets would weaken. All these adjustments would likely be highly deflationary at the global level. In this case, an extended period of slow global growth could ensue, reinforced and lengthened by an erosion of the capital of financial institutions and other market participants that would sharply curtail their willingness to supply credit. We have observed such “headwinds” so many times in the past that even an economist would have to admit they are possible...

  What's the bottom line of my luncheon talk? There is no free lunch. Times are good, but they may not “roll on” without encountering some potholes. Acting early to redress the major financial imbalances I have talked about could limit their potential adverse consequences. I, for one, believe this is food for thought."

[In response, the Single Global Currency Association wrote to Mr. Knight an email on 17 September 2005, to recommend the single global currency as the solution to some of the problems he described in his speech.]

 

5 September 2005. "Czech PM Prefers Euro Adoption In 2010 Not 2009"  by Leos Rousek, Dow Jones News

   PRAGUE -(Dow Jones)- Czech Prime Minister Jari Paroubek Monday said the government is likely to adopt the European Union common currency, the euro, in 2010 rather than 2009.

  "I'm thinking that at the meeting of the government likely to be held in November I will support as the date for adopting the euro Jan. 1, 2010," Paroubek said at a news conference after meeting Czech central bank senior officials.

   Paroubek said that adopting the euro in 2010 rather than 2009, which was the earlier target considered, would also fit better with the country's election calendar.

 

5 September 2005. New Zealand Poll Results: "Government urged to balance growth with social goals"   by Brian Fallow, New Zealand Herald

Excerpts..

  Asked whether New Zealand should seek to adopt a common currency with Australia if there is a net economic benefit to New Zealand, 62 per cent said yes, 31 per cent no and 8 per cent were unsure.

   Respondents were split between doing it by adopting the Aussie dollar or having a combined Anzac dollar. Eight per cent held out somewhat quixotically for having the kiwi dollar as the combined currency.

  This is stronger support than the 60 per cent backing a common currency in a mid-year poll by Business New Zealand.

  Of the political parties, Labour, New Zealand First, the Greens, the Progressives and the Maori Party all oppose currency union.

  United Future says yes, but only if the net economic benefit to New Zealand is clear. Act is open to the idea but notes that it would mean giving away having our own monetary policy to manage inflation.

  National says it has no firm policy on this but wants the idea explored.

  Back when the issue was widely debated in 1999/2000, Don Brash, then Governor of the Reserve bank, was on the unenthusiastic side and equivocal about the idea.

  It would reduce transaction costs and reduce uncertainty for companies trading with Australia, but it would not stop the big swings in other exchange rates, he said.

  And it would mean interest rates that were chosen for conditions across the Tasman. "It may well be that that would suit us extremely well, but conversely it may be that it would not suit us at all well."

2 September 2005.  "WAMZ meeting ends in Accra"

The Accra Daily Mail article begins...

  The Technical and Convergence Council meeting of the West African Monetary Zone today ends in Accra. Delegates from the five-member countries of the Zone are attending the four-day meeting. Member countries are The Gambia, Ghana, Guinea, Nigeria and Sierra Leone.

  The meeting discusses an Action Plan of the WAMZ work programme, efforts at creating a customs union for the Zone, ratification and domestication of three crucial statutes of the WAMZ and proposals for a more dynamic institutional support to the monetary integration embarked on by the five countries.

Members of the five countries have committed themselves to adopt the Eco as their common currency in 2009.....

1 September 2005. "Hungarian Economy Expected to Expand"

Excerpt from the Forbes Magazine article...

     Hungary, which joined the European Union last year, has targeted 2010 for adopting the EU's common currency, the euro.

23 April 2006  "SA wants rand adopted as common currency for SADC" by ANDnetwork.com (African News Dimension).

The article begins...

   South African Reserve Bank head of international relations, Mr Mshiyeni Belle, said South Africa was presently proposing that its rand be used as the common currency for SADC member states as the region comes up with its own currency.
    He told business journalists from SADC member states here that the SADC Committee of Central Bank Governors (CCBG) was presently working hard to harmonise their systems towards meeting this vision although the process is still at its elementary stages and rather slow.
    The Committee of Central Bank Governors was established in August 1995 as part of the Finance and Investment Sector of SADC.
    Since its inaugural meeting on 24 November 1995, the Committee of Governors has proposed several projects designed to contribute to the process of regional economic co-operation and integration.

  “We feel that as we move towards a common currency for the region, the easiest way to go about it will be to endorse the South African rand although this is a political matter which lies with the Heads of States of the member states,” he said.
    He said the SADC member states were taking a cue from the EU model where the trading bloc had to first convert to the German Deutsche Mark before coming up with the euro.
Asked to comment why he thought most SADC members were likely to accept the rand as a transitionary common currency for SADC, Mr Belle said although there were challenges towards this, the South African rand is widely accepted in most countries in the region.

19 April 2006  Newcastle Man Authors Global Currency Book Lincoln County News, Maine.

   The Single Global Currency Association is publishing the first edition of the book, The Single Global Currency - Common Cents for the World.

    Written by Morrison Bonpasse of Newcastle, the president of the association, the book shows how the world can save hundreds of billions of dollars, and eliminate currency crises and balance of payments problems, by forming a Global Monetary Union with a Single Global Currency. Despite its 424 pages and 720 endnotes, but with only one graph, the book is intended for the people of the world, as well as academics.

    The book explains how the multi-currency foreign exchange trading system was developed about 2,500 years ago to enable people to trade with different currencies. That system has become far more sophisticated and larger in the meantime, and sees the exchange of $2.5 trillion per day; but it is very expensive, risky and obsolete.

    Said Bonpasse, "With the creation and coming expansion of the European Monetary Union, the people of the world can now see how to create a Global Monetary Union with a Single Global Currency. Stable money has been a goal for centuries, and now it's within reach."

    The book concludes that it is now time to replace the multicurrency system with a Single Global Currency which will eliminate the annual $400 billion transaction costs of that trading. Also to be eliminated will be the need for foreign exchange reserves, and the international debate about the fairness of countries' exchange rates. Gone, too, will be the currency risk which now depresses asset values, especially in underdeveloped countries. Without such currency risk, worldwide asset values are projected to increase by about $36 trillion, which will fuel an annual increase in world GDP of about $9 trillion.

    A Single Global Currency is no longer a utopian dream, but a realistic projection of what has been learned from existing monetary unions, especially the euro.

    The world needs to set the goal of a Single Global Currency by 2024, to be managed by a Global Central Bank, within a Global Monetary Union, thus establishing a "3-G" world. And begin planning - now. The book contains chapters about political and educational action in support of those goals including Chapter 7, "How to Get There from Here."

    Said Bonpasse, "Please read this book and help save the world - trillions."

    The book is available from Amazon.com and directly through the Single Global Currency Association at www.singleglobal currency.org and participating bookstores.

 

7 April 2006  "Why Join the Euro - An overview in relation to the Czech Republic, Poland and the UK."  by Louis Mann from 999Network.

The article begins...

   For Poland and the Czech Republic it is not a question of should they join the euro, but rather when will they join the euro? This is simply because both countries agreed as ‘part of the package' of joining the European Union (EU) that they would also adopt the euro.

   The Czech Republic is set to join in 2010, but Poland has not yet set a target date, although they are implementing policies in order to meet the criteria for joining set out in the Maastricht Treaty.

Britain is still undecided, but is not under the same pressure from the EU as adopting the euro was not part of the deal when Britain joined the EU in 1973. Nevertheless, there are significant benefits in joining European Monetary Union (EMU), which imply the strengthening of the economies which join. However, there are costs too and, as we shall see below, the costs and benefits depend on the economy in question.

20 February 2006.  Bank for International Settlements Economist urges fewer international currencies.  In Telegraph, U.K. article by Edmund Conway, "UK policy blamed for soaring debt levels"

Excepts from the article...

    But the powerful Bank for International Settlements (BIS) has now voiced grave doubts about the policy and called on politicians to begin debating an overhaul of the current global economic system.

    In another radical move it has also suggested ditching many national currencies in favour of a small number of formal currency blocks based on the dollar, euro and renminbi or yen.

The BIS, which is controlled by a coalition of central banks and helps oversee the global financial system, warned that by pushing interest rates so low, inflation targeting has encouraged the public to take on more debt and has accelerated a flow of money out of the world's major economies....

    Mr White also suggested ditching the current system of floating currencies and replacing it with "a small number of more formally-based currency blocks". He claimed that because of the record rate at which Asian central banks have been buying dollars in order to keep their currencies artificially low, "we do not really have a freely floating rate system"...

 

19 February 2006, "The Case for Fewer but Stronger Currencies"  by Daniel Gross, New York Times.

The article begins:

  "OUTSOURCING isn't just a one-way street on which rich countries shift jobs overseas. In recent years, some developing countries have contracted out the work of setting monetary policy to the United States. Ecuador and El Salvador, in 2000 and 2001, respectively, abandoned their own currencies, adopted the dollar and placed their monetary policy in the capable hands of Alan Greenspan , then the chairman of the Federal Reserve.

  When outsourcing involves manufacturing and software programming it is often endorsed by economists and condemned by populist political leaders. So, too, is the tactic of outsourcing of monetary policy — known as dollarization, or euro-ization. After all, noted Robert E. Litan, senior fellow at the Brookings Institute, "currencies are symbols of national sovereignty, and countries are reluctant to give them up."

  And yet nations can impose enormous costs on their citizens when they take extraordinary efforts to maintain independent currencies. "Devaluations of currencies cost people their savings and bring on rapid inflation," said Benn Steil, a senior fellow at the Council on Foreign Relations and co-author with Mr. Litan of "Financial Statecraft" (Yale University Press, 2006). The two argue that the globe's mélange of 200-plus currencies, backed only by the faith of investors, is inefficient and dangerous. Many emerging economies, they say, would be well advised to swap their currencies for strong, stable, widely used ones like the dollar or euro...."

In response, the Single Global Currency Assn. wrote to Daniel Gross the following email:

Dear Mr. Gross,

   Thank you for today's column. Indeed, the case for fewer currencies is strong, and the logical conclusion of the trend is a single global currency. The remaining questions are When? and How rough will the transition be?

   I'm writing a book, "The Single Global Currency: Common Cents for the World" which builds upon the work of the economists you cited. To several of them, I've sent copies of the current manuscript, which is attached. Publication is planned for early April.

   With a single global currency, there will be no current account deficits and no currency crises and no need to retain foreign reserves and no transaction costs for foreign exchange. I estimate that the world will save approximately $400 billion per year in transaction costs and when the single global currency is implemented, the value of the world's assets will increase by $36 trillion.

   Dollarization is one route, but its major disadvantage is political as Barry Eichengreen observed in your article. As the Eurozone grows, and as other monetary unions are created, as in the Arabian Gulf, the U.S. likely will feel pressure to formally expand the formal use of the Dollar. One possibility, for example, is monetary union with Canada and Mexico, and with that will come seats on the important Federal Reserve Committees. Many economists have considered such a union.

   Perhaps a future column can explore the prospects for a single global currency? Can I send you a copy of the book upon publication? We won't be sending "advance" copies, but I could send a final .pdf file about 20 days before publication, if you would like.

   If you have the opportunity to scan or read the attached copy, which is about 90% done, I'd be interested in your comments.
Very truly yours,
morrison
morrison bonpasse

16 February 2006, The Wikipedia entry for  "Global Currency" says,

   "A global currency , in the form of a modern currency produced and supported by a central bank, like euro and dollar , will never be made. There are many fundamental problems that simply cannot be fixed. Both political problems and economicy-theoretical problems."  This entry was last updated on 15 February 2006.  It's expected that this entry will be modified as visitors respond to the writers of Wikipedia that it's wrong.

   

14 February 2006, "One World, One Dollar" Forbes Magazine, by Michael Maiello.

The article is primarily an interview with the premier champion of the single global currency, Nobel Prize winner, Robert Mundell.  An except below...

   "One of Mundell's Utopian hopes is that cooperation on currency would lead to international cooperation on other issues and enhance prospects for world peace. Having a common currency, he says, 'is like a kind of club and there are rules needed to keep it going. That has a lot of spillover effect and becomes a catalyst for other kinds of things.' "

7 February 2006.  "A common currency for East Asian nations "  by Raju Sanghwi, in India Daily.

    The world went a step ahead towards a common global currency. It is just a matter of time before the world has one currency.

    The Eastern Asian nations are going to have a common currency.

    According to media reports, the Asian Development Bank will issue an Asian currency unit (ACU) in March in an effort to boost economic cooperation between East Asian nations, People's Daily reported Feb. 6. Unlike the euro, the ACU is not a physical currency, but rather it is a form of virtual money, designed to measure the stability of currencies in the region and further boost regional economic cooperation.

17 January 2006. "The Developing World Should Abandon Parochial Currencies" by Benn Steil, in Financial Times.

An excerpted paragraph....

   Today, the best option for developing countries intent on globalising safely is simply to replace their currencies with internationally accepted ones, namely the dollar or the euro. Latin America 's star economic performer in 2004 was politically volatile Ecuador , which grew at 6.6 per cent with 2.7 per cent inflation, the lowest in 30 years.. Ecuador dollarised in 2000. If the European Union were wise, it would change its policy on extending the euro entirely and offer to assist Turkey and others in adopting it immediately.

26 December 2005.  "IMF offers to help push forward GCC monetary union"   from the Lebanon Daily Star.

The article begins...

     "ABU DHABI: The International Monetary Fund (IMF) has offered to help the GCC countries to push ahead with their monetary union and proposed the creation of a body similar to the European Union (EU) Eurostat Office to support this landmark project.

In a recent statement on the GCC's historic agreement to create a monetary union by 2010, the Washington-based IMF said it was optimistic about the success of the project on the grounds member states have made substantial progress in this effort and already have what it described as good macro-economical fundamentals."

[The good news is that the IMF supports the creation of the GCC monetary union.  Will it support others?  When will it address the need for a single global currency?]

 

15 December 2005.  "GCC all set for monetary union"  from the Bahrain Tribune.

The article begins...

     The signs for monetary union in the Gulf Cooperation Council (GCC) states are extremely good, according to a region-wide survey by Dubai-based Gulf Research Centre (GRC) published yesterday, but there remain some concerns about the speed of preparations on a macro economic level.

   Business is overwhelmingly in favour of the move arguing it will not only be good for business but also for the GCC economy as a whole.   

   The survey findings offer GCC policymakers mixed blessings because while businesses' attitudes are predominantly positive - in stark contrast to Europe's experience in introducing the euro - there remains concern about clarity on the issues and calls for more assistance in preparing monetary transition.

   The survey also contacted policymakers, economic analysts and academics who were split on the level of preparedness.....

11 December 2005.  George F. Will's modest endorsement of the euro in Newsweek article, "2005's Kind of Progress"...

He wrote in his summary of the year...

     "The 482-page European Union 'constitution' was rejected, but the common currency marches on in white boots."

 

6 December 2005.  Poll shows English-speaking Asians have substantial support for monetary union, in article "ASEAN leaders for integrating economies, societies"  in NewKerala.com.

The article begins...

   Singapore: Leaders of some ASEAN countries feel the need to integrate their economies and societies to face the challenges posed by the growth of India and China.
    The Association of South-East Asian Nations (ASEAN) would need to reposition itself to play a role in a changing world, said Singapore Foreign Minister George Yeo. The rise of China and India had given this move to integrate their economies greater impetus, he said.
    An integrated region "will be more stable and ... allow ASEAN to compete", said Leo Suryadinata, a senior research fellow at the Institute of South Asian Studies.  "Otherwise, it will be difficult for ASEAN to face globalization," he said.
    Meanwhile, nearly half of people polled in some ASEAN countries backed a common currency despite wide economic disparities among the member countries.
    They want the pace of integration speeded up as ASEAN identity becomes stronger, said The Straits Times Asia Poll.
The findings signal a willingness on the part of people to accept closer integration of their economies and societies, recommended by some ASEAN leaders.
    More than 1,000 English-speaking urban residents were polled in Thailand, Indonesia, Malaysia, the Philippines, Vietnam and Singapore. ASEAN also includes Brunei, Laos, Cambodia, Vietnam and Myanmar.
    Over half of those queried said they could speak the language of another ASEAN country, 44 percent had travelled within the region, and an equal percentage expected to do so within the next six months.
    Five in 10 of those surveyed were willing to invest in another ASEAN country.
    A common currency was supported by 45 percent. Thirty-eight percent rejected the idea, and the rest were undecided.
Thailand emerged as the top destination in ASEAN for tourism, followed by Singapore.
"The results are an eye-opener," The Straits Times quoted former ASEAN secretary-general Rodolfo Severino as saying.
"The people are clearly ahead of their governments. While leaders and officials are still debating the ASEAN identity issue, people-to-people links have grown over the years."
[See related article in the People's Daily, China, "Survey: ASEAN 'common currency' gaining support"]

 

4 December 2005.  "Asia: Building Blocks: At next week's East Asia Summit, there will be talk of creating a regional common market and, eventually, a single currency. Are those plausible ideas or a pipe dream?"   by Christian Caryl, Newsweek International

The article begins.....

Dec. 12, 2005 issue - Just imagine: it's a sunny winter's day in 2045, and you're arriving in Bangkok airport on the 1:15 from Shanghai. The flight is considered internal, so there's no customs check; you can keep that dark red Asian Union passport in your pocket. No need to pick up any cash, either—you've still got plenty of yuen (the single Asian currency) left over from your previous stops, including Tokyo and Seoul.....

November, 2005, "Everyone should pay in Mondos?"  An interview with Jose Cordeiro, in column by Marco Visscher in ODE Magazine, Netherlands

What's a mondo?

  “It could be the name of a new global currency that everyone on this planet could use.”

 Why would we need one?

  “It makes any national economy more reliable, because there will be no more uncertainty about currency rates, rates of return, interest rates, devaluation, etc. Did you know that every day $1.8 trillion U.S. is traded internationally? We spend billions of dollars on speculation and transaction costs, on a daily basis! One global currency would mean a lot of cost-saving.”

These do not sound like major global problems that need immediate fixing.

  “Countries with more fluctuation in their currencies show less economic development, about two percent less. If we can introduce a global currency, poor countries wouldn't pay so much to keep these national currencies, and their economies would grow more. Believe me, the poor will benefit more from a single global currency.”

 Don't you think people are just attached to their old coins and bills?

  “In Africa , Latin America and parts of Asia —which is to say, most of the world—people would love to give up their national currency and replace it with the dollar, or the euro, or the yen, because they don't trust their own national currency.”

So what are we waiting for?

  “For national governments to give up their privilege to print money whenever they need some extra money. And for the insight that it's just stupid to have all those different currencies. Why not then have a currency for your own village, or even for your family? Maybe you'd like one for yourself! That would be a disaster, right? It's simply more convenient to have a single currency for everyone. While all these different currencies made sense at a time when there wasn't so much traveling and when economies were not as integrated as they are now, it's simply inevitable that we need more common standards in a globalized world.”

José Luis Cordeiro is an economist who teaches at the Central University of Venezuela and consults with various companies and organizations. He's founder of the Venezuelan chapter of the World Future Society, and sits on the board of advisors of the Single Global Currency Association.

 

28 November 2005.  "Abandoning The Euro Would Have High Cost, Says S&P Report"   from Axcess News.

The article begins....

   (AXcess News) New York - According to a recent report by Standard & Poor's, abandoning the Euro would have high costs for some sovereigns and adversly affect their credit ratings. If they favored going back to national currencies it could lower their credit ratings two to four notches, the U.S. rating agency said.

   The report entitled "Breaking Up Is Hard To Do: Rating Implications Of EU States Abandoning The Euro" found that lower-rated EMU sovereigns with weaker fiscal profiles would diminish their creditworthiness in the unlikely event that they left Economic Monetary Union.

[See also related report from Moody's about risk and the Eurozone.

"Moody’s highlights risks for the European Union" from the "Financial Mirror)

 

26 November 2005.  "Slovakia moves closer to adopting euro by linking up"   from the Shanghai Daily.

The article begins....

     SLOVAKIA became the seventh of the European Union's newest members to move closer to adopting the euro by establishing formal links with the common currency, a move the central bank said will help keep the koruna stable.

    The EU said in a statement from Brussels it admitted Slovakia to its exchange-rate mechanism effective from today. The Slovak koruna will be pegged at 38.4550 to the euro under the regime, compared with Friday's close of 38.47.

    The peg starts a test of currency stability before euro adoption, which Slovakia is targeting in 2009. The government chose to enter the exchange-rate mechanism earlier than the original plan for the first half of 2006 to make the koruna less vulnerable to movements in other east European currencies, the central bank said.

    "The 2009 target is still in place, but we view the entry to the mechanism as another way of how to ensure the stability of the exchange rate," Governor Ivan Sramko said in Bratislava, the Slovak capital, on Saturday.

    The mechanism, one of five tests for would-be euro members, requires each country to keep its currency within 15 percent of a central rate to the euro for two years without devaluing....

 

22 November 2005.  In the article, "Make hay while the sun shines, says Mboweni", South African Reserve Bank Governor Mboweni announced goal of African Monetary union by 2025, in the Mail & Guardian.

Excerpts...

   Rather than worry about how to get growth going, people should be worrying how to make the most of a South African economy that is "pumping", South African Reserve Bank (SARB) Governor Tito Mboweni said on Monday....

    "The central bank governors of the African Union have a target of achieving monetary union by 2025. This target has the tacit approval of most governments, but in order to achieve that union, we must agree on convergence criteria, such as fiscal deficits to GDP ratios and low inflation rates," Mboweni said.

21 November 2005.  "Hungary Bank Official Urges on Euro"  from MSN Moneyat MSN.com

The article begins...

    BUDAPEST, Hungary (AP) - Hungary should implement reforms and adopt the European Union's common currency as soon as possible, the country's central bank president said Monday.

    Hungary's growing budget deficits have cast doubts on its plans to switch to the euro in 2010. EU officials have said Hungary could lose access to the bloc's infrastructure funding if it fails to take advice on its economy.

    National Bank of Hungary President Zsigmond Jarai said that while it was not impossible to reach the 2010 target date, the 2005-06 state budgets showed no signs that the government was planning essential reforms.

    "I believe we are increasingly headed in the wrong direction," Jarai was quoted as saying by state news agency MTI. "The further we are from the goal, the bigger the task will be and the bigger the needed adjustments."

    The government has announced a 2006 budget gap target of 6.1 percent of gross domestic product, compared with a 3 percent EU limit for countries using the euro. The central bank has estimated a gap of 8.9 of GDP for next year, while the EU forecast is 6.7 percent.

 

18 November 2005.  Korea Exchange Bank Chairman urges Asian Common Currency, among other reforms in "Citibank CEO Warns of 2nd Asian Crisis Due to Slow Reforms"   in Korea Times by Kim

Sung-jin

excerpts....

   Citibank chairman William R. Rhodes Friday advised the Asian economies to resume efforts on reforming the financial sector, warning the slow pace of reforms may trigger another financial crisis in the region....

    Korea Exchange Bank chairman Robert E. Fallon pointed out that Asian savings that flow into bank deposits is an opportunity. This flow will either let bank deposits migrate to mutual funds or compel bank deposits to go from low demand loans to funding enterprises via venture capital, mezzanine finance or private equity...

    Fallon proposed establishing a common currency in the Asian economic bloc, billed an as one solution to fostering the Asian financial market...

    Institute for International Economics senior fellow Edward M. Graham backed Fallon¡'s suggestion.

    Graham said the emergence of a common currency would bring about a positive development in the Asian bond market, which is underdeveloped compared to the European bond market.

 

17 November 2005.  SAARC Business meertings: "Intra-regional trade can touch $14 billion: PM"  from Newindpress.com

Excerpts relating to a regional common currency for the South Asian Association for Regional Cooperation....

   "....NEW DELHI: Interlinkages between the comity of SAARC nations at all levels is of utmost significance to increase intra-regional investment, prime minister Manmohan Singh said while inaugurating the SAARC Business Leaders Conclave organised jointly by FICCI and the SAARC Chamber of Commerce and Industry (SCCI) here on Thursday...

    ...Macky Hashim, president, SAARC Chamber of Commerce and Industry, Sri Lanka, outlined the objective of the conclave and stated that it is to emancipate SAARC of poverty by making it the fastest growing economic region in the world and to prepare member states for a common South Asian Market.

    Among other objectives are to have a common currency, to make a South Asian Union like the EU, to develop an enabling environment for higher intra-regional investment, to promote South Asia as a common investment destination for the rest of the world and to increase employment opportunities within the region."

 

7 November 2005. "Single currency will climax Asia's economic integration" In a column echoing his 25 October speech, below, in Manila,   Haruhiko Kuroda restates his support of an Asian common currency. He is the head of the Asian Development Bank.

Excerpts....

  ...The key to continuing and expanding this growth and lifting more people out of poverty lies in regional cooperation and integration. Only through working together can Asian countries unlock their vast economic potential...
  I have taken a somewhat different view and have argued that our long run objective should be the creation of an Asian monetary union with a single currency.

  I continue to believe that Asia in general, and East Asia in particular, should strive to form a monetary union in the long run.

6 November 2005. "Middle East Takes Center Stage In Currency Markets"

excerpts...

LONDON — The Middle East could set the tone for currencies in 2006 as traders mull what the region will do with the swelling dollar-denominated oil revenues it has accumulated over recent months. 
   Any hint that key accounts in the region could seek to offload dollars and shift into other major currencies like the euro could put the greenback under pressure after its recent bull run....

   The International Monetary Fund's recent semiannual World Economic Outlook Report estimated that Opec's current account surplus could reach $337 billion by 2006, compared with $362 in Asia.

   That firmly puts the Middle East in the same league as Asian central banks - heavy hitters in the currency markets because of their vast dollar holdings. Traders and analysts routinely scrutinise every word from Asian central bank officials for signs of currency skittishness, and the markets can move dramatically on apparent shifts in sentiment.

 

4 November 2005. "IMF Article IV consultation with Estonia."

The report begins with "Background"....

  Estonia has made extraordinary progress following independence. Sound macroeconomic policies and far-reaching structural reforms have resulted in the successful establishment of a market economy and EU membership. The country is witnessing a remarkable convergence in real terms to EU levels, with purchasing power parity per capita income increasing to 46 percent of the EU15 level. Estonia has also achieved significant nominal convergence, meeting all of the Maastricht criteria, save for inflation. Estonia entered ERM II in late June 2004, unilaterally maintaining its peg to the euro with a currency board arrangement, and is aiming at early euro adoption.

 

31 October 2005. "Turkey is close to meeting Maastricht criteria, says report" From Turkish Daily news, online

The article begins...

   Turkey's economy is benefiting from improved financial and political stability and the country is moving towards meeting the Maastricht criteria, the conditions required to join the European Monetary Union, according to a report issued by Morgan Stanley economist Serhan Çevik.

    Along with a 30 percent increase in real GDP in the past four years, Turkey has succeeded in dropping inflation from an average of 77.5 percent in the 1990s to the single digits on a sustainable basis, creating a positive feedback loop to growth dynamics.

 

27 October 2005. "Bernanke on the Record" from Business Week

Excerpt on the Euro...

     Bernanke holds a positive view of the eurozone's experience with a single currency. Look at this from "The Euro" (June, 2004): "... [I]t seems safe to conclude that the common currency has had and will continue to have large benefits for European finance. At a minimum, the single currency eliminates exchange-rate risks that exist when securities are denominated in different currencies. The single unit of account seems also likely to reduce transaction costs and eliminate a portion of the fixed costs involved in issuing similar securities in multiple currencies. These factors are already serving to moderate home bias in borrowing and lending, leading to larger, more liquid, and more diversified financial markets."

 

27 October 2005.  "Diplomatic momentum of the Pacific Island Forum" from "The National", Port Moresby, Papua, New Guinea.

The article begins...

THE Pacific Island Forum (PIF) meeting now underway in Port Moresby denotes the beginning of a more coherent approach to regional integration.
Issues on the table include a Pacific Parliament, common currency, economic integration, a Pacific treaty of compliance to principles and obligations and common defence.

26 October 2005. "Asia should move forward to monetary union: ADB"  from www.xinhuanet.com

  MANILA, Oct. 26 (Xinhuanet) -- Asia should achieve the monetary union with a single currency in long run, Asian Development Bank President Haruhiko Kuroda said Wednesday.

    During a speech at a forum, Kuroda said Asia in general, and East Asia in particular, should strive to form a monetary union in the long run.

    Although as the fastest growing region in the world for several decades, Asia still shows an enormous disparity in income levels, living standards, and socioeconomic conditions as well as homes almost two thirds of the world's poor, Kuroda said.

    "In a region of such dynamic growth, this is simply unacceptable," he added.

    The president said that given the magnitude of intra-regional trade, even small exchange rate misalignments can disturb trade and investment flows and create trade friction among the region's economies. "This indicates the need for intra-regional exchange rate stabilization in the years to come, and ultimately a single currency."

 

20 October 2005. "Estonia's Ansip Says Euro Entry Will Accelerate Economic Growth "   by Alistair Holloway at Forbes.

The article begins...

Oct. 21 (Bloomberg) -- Estonian Prime Minister Andrus Ansip said adopting the euro in 2007 will add 1 percentage point a year to economic growth, spur foreign investment and boost tourism.

The former Soviet republic on the Baltic Sea, which joined the EU in 2004, will switch to Europe's common currency in 14 months with Slovenia and Lithuania. The local currency, the kroon is locked in the exchange-rate mechanism, the system that tests currency stability before the changeover....

 

18 October 2005. What Non-Governmental Organizations can do to change the world: "Group: Chad, Bangladesh are most corrupt" from the Seattle Post-Intelligencer - News of Transparency International

The article begins...

LONDON -- Bangladesh and Chad were ranked most corrupt on a global watchdog group's annual list of corruption levels in 159 nations, released Tuesday. At the other end of the scale, Iceland was ranked least corrupt.

Corruption undermines efforts to eradicate poverty, with graft by public officials hampering attempts to raise the living standards of the poor, Transparency International said.

 

18 October 2005. "Global Power Shift from West to East in Making" by James F. Hoge, in the Seoul Times, reprinted from the magazine, Foreign Affairs.

excerpts...

  Other Southeast Asian states are steadily integrating their economies into a large web through trade and investment treaties. Unlike in the past, however, China — not Japan or the United States — is at the hub.

  The members of the Association of Southeast Asian Nations (ASEAN), finally, are seriously considering a monetary union. The result could be an enormous trade bloc, which would account for much of Asia's — and the world's — economic growth.

[emphasis added]

16 October 2005. Klaus Liebscher: "The European monetary union and the euro - a contribution to international stability"  from the Bank for International Settlements

Excerpt...

The firm commitment of the euro system – as the European Central Bank and the 12 National Central Banks from the Member States of the euro area are called – to pursuing price stability as its main objective remains a key factor behind market confidence in the euro as a global and stable currency. Since the euro system became responsible for monetary policy in 1999, the primary objective of maintaining price stability has been successfully pursued. Inflation volatility has stabilized – the average inflation rate being around 2% over the past years – in spite of major inflationary shocks and although oil prices have quadrupled and the economic environment is difficult right now, inflation expectations still remain low. This reflects the high confidence of the public as well as the financial markets in the euro. European Union in order to ultimately adopt the euro, this has so far led to an impressive record of macroeconomic stability as well as exchange rate stability on their way to EMU.

 

12 October 2005. "From the euro to the globo"  by Hamid Golpira, Tehran Times.

Concerned about privatization of central banks, the article begins...

   Globalization is leading to a global economy with one world currency. It's not clear what the name of this global currency unit will be, but perhaps it will be called the globo.

   The adoption of the euro by 12 European Union states is part of the process of creating the globo. The U.S. dollar and the euro are currently the two strongest hard currencies in the world. They may eventually be merged to create the globo...

 

12 October 2005.  From the United Nations, 2005 World Economic and Social Survey: "UN report says donors should focus on quality of aid to foster development"

Excerpt...

  In addition, international aid donors need to better manage the “strongly cyclical patterns of their financial flows” that can wreak “harmful economic side effects” on developing countries,” and countries should borrow in their own currency so that they won't be adversely affected by huge variances in world currency exchanges, he [Mr. Jose Antonio Ocampo, United Nations Under-Secretary-General for Economic and Social Affairs] added.  [emphasis added by SGCA]

 

5 October 2005. "Campaign for creation of South Asian Economic Union intensified"   from XINHUA.net

Excerpts...

DHAKA, Oct. 4 (Xinhua) -- A number of member states of the South Asian Association for Regional Cooperation (SAARC) will intensify campaign for creation of a South Asian Economic Union in the region during the 13th SAARC summit in Dhaka next month...

  Bangladesh, however, expressed the view that there are certain steps to be implemented before formation of the economic union. Those steps are establishment of a free trade area, customs union, monetary union and a common market...

4 October 2005.  "Renewal of African Financial Systems for Efficiency Recommended " from the Addis Ababa Tribune.

Excerpts...

   The Acting Secretary General of the OAU, Ambassador Lawrence Agubuzu has called for the renewal of African financial systems in order to better mobilize for greater and efficient allocation of financial resources on the continent.

   The Acting Secretary General also stated that the efforts were in conformity with the necessary measures for the establishment of the African Monetary Union which were provided for in the treaty establishing the African Economic Community, and which were further underscored at the extraordinary summit of the Heads of State and government of the OAU held in Sirte, Lybia, last year. The treaty inter-alia called for the establishment of African economic community, the African Monetary Union and the African Central Bank which are expected to underpin the African Union, whose constitutive act was signed during the recent summit in Lome, Togo. ...

 

30 September 2005. Australia's Federal Labour Party announces  "Toward a Pacific Community"  initiative, which includes recommendation for Common Currency: the Australian dollar.

Specifically...

    A regional commitment to inflation targeting, and assistance to

    those Pacific countries that may wish to adopt the Australian

    dollar.
[For another view, see ABC Online, "ALP calls for EU-style Pacific community" with an excerpt...

The paper calls for a treaty, setting up a 'Pacific Community', similar to the European Union, that would include a Pacific Parliament, a special Court, and see the Australian dollar adopted as the common currency for Pacific Island nations.]

29 September 2005.  Letter to Editor, South China Morning Post: "Bermuda Lawn"  by Tony Henderson of Hong Kong.

It's critical of the Single Global Currency, but, Excerpts....

  Now the merits of the single universal currency when paraded for consideration are very clear to the logical mind: no currency speculation, no commissions on currency exchanges, no currency black market, no inflation-deflation worries, steady interest rates. Or so it might seem!

  A further merit of any total monetary union is touted along the lines of the value of the currency being separate from the economic health and governing finances of any one member country and in fact being separate from the general state of world health.

  [The Single Global Currency Assn. responded with a "Letter to the Editor" that begins, "In response to Tony Henderson's 29 September letter about the single global currency, I agree that multiple currencies are charming, but so are the postal stamps of the countries of the world.

The major problem with having multiple currencies is that the system costs the world hundreds of billions of euros a year, and the risks of another regional currency crisis, if not a world currency crisis, loom large."]

29 September 2005.  "A common currency: Maybe now's the time"  by Terence Corcoran in the Financial Post (Canada)

Excerpts....

...  Except, of course, for all the people who are thinking about the stupidity of the impact of our floating exchange rate on the economy. That would include Jim Stanford, chief economist at the Canadian Auto Workers, and a slew of other business people and economists who are pointing to risks of currency-induced economic turmoil....

  ...There is no particular reason people should be laughing at the idea of a common Canada-U.S. currency. The Dutch disease is a product of a separate currency regime and shifting currency values. How to avoid it? A common currency would provide part of the answer....

  ... It would be foolish to minimize the complexity of currency reform and common currency issues. But wild swings in the loonie, recorded in the chart above, point to a currency regime that's as much of a problem as it is a solution. The dollar could crash if energy prices shifted directions next year, forcing another series of dramatic economic adjustments. None of this is funny.

 

28 September 2005. "Credit where credit is due"  by 'Buttonwood', in the Economist.

Interesting article about bond prices and debt in a monetary union, the EMU, whre one paragraph states...

It was not always thus, as the chart below shows. Before monetary union in Europe, the yield on the Italian government's ten-year bonds could be more than 650 basis points higher than that on Germany's, over which the rigorous Bundesbank kept watch. That gap narrowed sharply when currency risk disappeared, a big new euromarket reduced trading costs, a single central bank took charge of interest rates and monetary membership rules promoted unwonted fiscal discipline.

 

27 September 2005. "EA bourse will have to await a common currency"  By ESTHER NAKKAZI in "The East African"

The article begins...

  Plans to set up a regional stock exchange for the three East African countries of Uganda, Kenya and Tanzania by 2007 have been deferred until the region realises a regional monetary currency.

Officials from the Capital Markets Authority in Uganda said last week that the joint stockmarket for the region was unlikely to become operational until the East African Community has a single currency, which is envisaged to be in use by 2010.


24 September 2005.  "US in call for reform of IMF voting"  by Andrew Balls, Financial Times.

The article about allocation of IMF governance begins...

The US on Friday called for reform of the International Monetary Fund's weighted voting system and appeared to hint at the need for a single European Union seat on the IMF's board.

 

22 September 2005. "Is Asian Common Currency Feasible?"  By Yoon Deok-ryong in The Korea Times.

An excerpt reads....

Due to the given restrictions in establishing a regional exchange rate system, an Asian common currency could be another consideration. Though a common currency usually comes at the final stage of financial and monetary cooperation to substitute national currencies, it could be introduced at the beginning of the integration process as a reference money and take the role of numeraire.

19 September 2005. "GCC: Full steam ahead to monetary union"  From AME Info FZ.

The article begins....

The six members of the Gulf Cooperation Council (GCC; consisting of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE)) took a step closer to monetary union last week as central bankers agreed the text associated with fiscal and monetary targets agreed in March.

 

13 September 2005. From Malta - "NECC launch website on changeover to Euro"  by Sarah Suda, Di-Ve News

  VALLETTA, Malta: The National Euro Changeover Committee (NECC) has launched a provisional website with the aim to inform the public about the changeover to Euro.

  This website, is part of the initial stages of the campaign of the NECC to diffuse information on the European Monetary Union and the Euro. The site also contains information on the process leading to the adoption of the euro and the strategy adopted by Malta to reach this goal.

9 September 2005.  Joseph Stiglitz does not support Asian common currency. See article: "Economist warns of slowdown of SE Asian economies as interest rates rise" in Peoples' Daily, Online.

Excerpts...

  ...On the issue of a common currency for Asia, the former World Bank chief economist refused to give support for the idea, but encouraged more monetary cooperation in the region like forming an Asian Monetary Fund.

  "The issue of a common currency requires a lot of similarities between the countries because when you have a common currency, you give up an instrument, you give up an independent monetary policy, " he said, adding that Asia is not ready for it....

 

8 September 2005.  On coordinating fiscal policies within a monetary union: "Eurozone states urged to liaise on budgets" by Ralph Atkins and George Parker, Financial Times.
The article begins...

Eurozone countries could boost the effectiveness of the currency union by unveiling their national budgets around the same date and by using the same economic forecasts, according to a member of the European Central Bank's executive board....

 

8 September 2005. "New GCC common currency on target"

by Tariq Konji, Gulf Daily News, Bahrain

The article begins...

  THE GCC may have a common currency much earlier than the 2010 deadline, according to predictions by a top bank. Calyon Corporate and Investment Bank, part of the Credit Agricole Group, believes the GCC central banks have all the tools in place to let the project move ahead sooner than initially anticipated.

  But the real issue is whether or not the currency will be pegged to the US dollar, according to Gulf capital markets executive director and treasurer Elyas Al Gaseer.

  "We believe that the GCC currency will be launched sooner than initially planned and that the Saudi Arabian Monetary Agency will take the lead because it is the best equipped bank to do so. It has all the supervisory tools in place," he said.

  "We also believe that it would be wrong for the currency to be pegged to the dollar. Instead, the dollar peg should be replaced with a trade-weighted basket of currencies."

6 September 2005. Speech: "Malcolm Knight: Challenges to financial stability in the current global macroeconomic environment " Speech by Malcolm Knight, General Manager of the BIS, at the International Monetary Fund in Washington DC

Excerpt...

  "It is hard to escape the conclusion that the world today is characterised by an unusual, perhaps unprecedented, combination of financial imbalances , both domestic (internal) and international (external). ..

  As to external financial imbalances , the current account deficit of the United States has been trending upwards as a percentage of GDP for over 20 years, and now stands at nearly 6% of GDP. Moreover, the net service account has finally shifted into negative territory, partly reflecting the fact that the United States, the world's richest country, is now also its biggest international debtor....

  But this brings us to the third question. What harm might be done should any or all of these imbalances unwind? One possibility could be a sudden crisis in the financial system, though where and when an overextended system might fail is impossible to predict. I think another possibility is much more likely. If the overseas demand for US dollar assets were to slow markedly, for whatever reason, the US dollar would depreciate, world interest rates would rise, and the prices of a number of classes of financial and real assets would weaken. All these adjustments would likely be highly deflationary at the global level. In this case, an extended period of slow global growth could ensue, reinforced and lengthened by an erosion of the capital of financial institutions and other market participants that would sharply curtail their willingness to supply credit. We have observed such “headwinds” so many times in the past that even an economist would have to admit they are possible...

  What's the bottom line of my luncheon talk? There is no free lunch. Times are good, but they may not “roll on” without encountering some potholes. Acting early to redress the major financial imbalances I have talked about could limit their potential adverse consequences. I, for one, believe this is food for thought."

[In response, the Single Global Currency Association wrote to Mr. Knight an email on 17 September 2005, to recommend the single global currency as the solution to some of the problems he described in his speech.]

 

5 September 2005. "Czech PM Prefers Euro Adoption In 2010 Not 2009"  by Leos Rousek, Dow Jones News

   PRAGUE -(Dow Jones)- Czech Prime Minister Jari Paroubek Monday said the government is likely to adopt the European Union common currency, the euro, in 2010 rather than 2009.

  "I'm thinking that at the meeting of the government likely to be held in November I will support as the date for adopting the euro Jan. 1, 2010," Paroubek said at a news conference after meeting Czech central bank senior officials.

   Paroubek said that adopting the euro in 2010 rather than 2009, which was the earlier target considered, would also fit better with the country's election calendar.

 

5 September 2005. New Zealand Poll Results: "Government urged to balance growth with social goals"   by Brian Fallow, New Zealand Herald

Excerpts..

  Asked whether New Zealand should seek to adopt a common currency with Australia if there is a net economic benefit to New Zealand, 62 per cent said yes, 31 per cent no and 8 per cent were unsure.

   Respondents were split between doing it by adopting the Aussie dollar or having a combined Anzac dollar. Eight per cent held out somewhat quixotically for having the kiwi dollar as the combined currency.

  This is stronger support than the 60 per cent backing a common currency in a mid-year poll by Business New Zealand.

  Of the political parties, Labour, New Zealand First, the Greens, the Progressives and the Maori Party all oppose currency union.

  United Future says yes, but only if the net economic benefit to New Zealand is clear. Act is open to the idea but notes that it would mean giving away having our own monetary policy to manage inflation.

  National says it has no firm policy on this but wants the idea explored.

  Back when the issue was widely debated in 1999/2000, Don Brash, then Governor of the Reserve bank, was on the unenthusiastic side and equivocal about the idea.

  It would reduce transaction costs and reduce uncertainty for companies trading with Australia, but it would not stop the big swings in other exchange rates, he said.

  And it would mean interest rates that were chosen for conditions across the Tasman. "It may well be that that would suit us extremely well, but conversely it may be that it would not suit us at all well."

2 September 2005.  "WAMZ meeting ends in Accra"

The Accra Daily Mail article begins...

  The Technical and Convergence Council meeting of the West African Monetary Zone today ends in Accra. Delegates from the five-member countries of the Zone are attending the four-day meeting. Member countries are The Gambia, Ghana, Guinea, Nigeria and Sierra Leone.

  The meeting discusses an Action Plan of the WAMZ work programme, efforts at creating a customs union for the Zone, ratification and domestication of three crucial statutes of the WAMZ and proposals for a more dynamic institutional support to the monetary integration embarked on by the five countries.

Members of the five countries have committed themselves to adopt the Eco as their common currency in 2009.....

1 September 2005. "Hungarian Economy Expected to Expand"

Excerpt from the Forbes Magazine article...

     Hungary, which joined the European Union last year, has targeted 2010 for adopting the EU's common currency, the euro.

 

30 August 2005. "FM sets out its stall"  by Laurence Mackin, Warsaw Business Journal

  Poland will not be able to join the single currency until three years after it joins the eurozone, according to the Finance Ministry.

  The Ministry says it will need six months to prepare for at least two years of mandatory membership in the pre-euro ERM-2 currency regime. It would take another six months for the European Central Bank and the European Commission to assess whether Poland qualified for membership and for the EU finance ministers to decide when it can join the euro area.

  In a document that reviews all technical aspects of Poland's progress towards the euro, it says: "About three years must pass between the strategic decision by national authorities about joining the eurozone and adopting the common currency.

  The outgoing government said Poland should meet all eurozone membership criteria, including the crucial budget-deficit limit of three percent of GDP, in 2007 and that euro adoption would be possible in 2009. But the timetable will depend on the new government formed after elections on September 25 and the Ministry's document gives no specific dates or targets.

  One key decision will be when to peg the zloty to the euro in the ERM-2 grid. Some officials have said it could happen as early as April next year, but several economists and some central bankers are skeptical and say 2007 is the earliest possible date. (Reuters)

 

30 August 2005. "European Meltdown"  by Ross Clark in The Telegraph, U.K

From the conclusion of this article, pessimistic about the euro...

  "...While it won't be this year or next year, it will come as no surprise if, beyond that time frame, withdrawal from the euro becomes a winning election issue."

 

30 August 2005. "Tanzanian business may sue Kenya on customs breach"

Excerpts about monetary union follow....

  DAR ES SALAAM (Reuters) - Tanzania's business community threatened on Monday to sue Kenya for breaking the rules of a customs union reached earlier this year, after Nairobi zero-rated imports of pharmaceutical products.

  The East Africa Community (EAC), made up of Tanzania, Kenya and Uganda, set a common external tariff (CET) in January 2005 with bands of 25 percent on finished goods, 10 percent for semi-processed goods and zero for raw materials.

   The three countries hope to form a common market by the end of 2007 and a monetary union in 2009, but analysts say repeated complaints by various business groups in the region could derail the plans.

 

30 August 2005. "Belarus to further delay introduction of Russian ruble - National Bank"  from Interfax.

  Minsk - Belarus will not enter the Russian ruble into circulation from January 1, 2006 for technical reasons, National Bank Chairman Pyotr Prokopovich told a news conference on Monday.

"This timeframe is unrealistic for technical reasons," Prokopovich said.

  The National Bank chairman also said that the schedule of forming a Belarussian-Russian monetary union depends on the two countries' leaderships. The Belarussian and Russian presidents have reached an agreement under which the formation of the monetary union will be preceded by the adoption of the Union State's constitutional act, the creation of a legal foundation and the evening up of economic conditions for the two countries' companies and citizens.

  The introduction of the Russian ruble in Belarus was initially planned from January 1, 2005, but the date was subsequently put off until January 1, 2006.

20 August 2005.  "Plan must be for Pacific"  by TK Jayaraman [member of the Board of Advisors of the Single Global Currency Assn.] in the Fiji Times.

In this article about Pacific Island cooperation, he wrote about the common island currency....

  Both single market and single currency are advanced concepts for which PICs [Pacific Island Countries] are not ready yet.

Although single market and single currency were adopted as the goals of the CARICOM [Caribbean Community] a long time ago, progress is understandably slow, as they involve sacrifices of some measure of sovereignty. Aside from sovereignty issues, empirical studies on the feasibility of a common currency for PICs, either on their own or by adopting the Australian dollar, have indicated there has been no convergence observed in any economic real variables, such as gross domestic products, inflation and real exchange rates of the PICs and Australia and New Zealand. (Bowman 2004, Jayaraman 2001, 2005b).

  External shocks experienced by PICs and Australia and New Zealand in the past have been asymmetric in nature and hence, they are unsuitable candidates for a common currency at this stage since common fiscal, monetary and exchange rate policies would not be appropriate either for PICs or for the union as a whole. (Bunyaratavej and Jayaraman 2005, Jayaraman 2005a, 2005c, Jayaraman, Ward and Zu 2005).

  Although it could be argued that most of the real economic variables such as real exchange rates are endogenously determined and hence a common currency can be adopted (Duncan 2005), one has to recognise the presence of inherent risks, which are likely to be far greater than the anticipated gains.

  There will be no easy exit from a common currency arrangement once established and it will only be at a very high cost (Worrell 2003, Farrell and Worrell 1994).

  Having been aware of the high risks involved in a currency union, the Heads of Governments of CARICOM did not want to take any chances and they prescribed the pre-union convergence criteria, similar to those imposed by the Maastricht Treaty for adopting the common currency, the Euro.

 

18 August 2005  "Academics Call for East Asian Monetary Union"   at english.chosun.com.

The entire article...

  Academics on Friday called for Asian nations to form a regional cooperative body with feature of the European Union and adopt a common East Asian currency.

  The academics from Korea, China and Japan met in Seoul for an international seminar on exchange-rate cooperation between Korea, China and Japan, which they said was badly needed.

  Uri Party lawmaker Chung Duck-koo, who was head of the organizing team committee said, "The idea of a unified Asian currency is not, in the end, a wild dream... We must hurry discussion on exchange rate cooperation by holding regular meetings of the Korean, Chinese and Japanese finance ministers and central bank governors."

  The director of China's Academy of Social Sciences Institute of World Economics and Politics, Yu Yongding, said, "We must develop cooperation focused on the Chiang Mai Initiative, which allows the ASEAN +3 states to use each other's foreign exchange reserves when shocks like foreign exchange crises strike, and establish an Asian regional body to carry out a role like that played by the European Commission."

   Prof. Kawai Masahiro of Tokyo University, an advisor to the Asia Development Bank president, said there was also a need to invigorate the Asian bond market so Asian nations can use their vast foreign exchange reserves more effectively within the region instead of buying U.S. government bonds.

   An expert with the Korea Institute of Finance (KIF), Choi Gong-pil joined Yoon Deok-ryong of the Korea Institute for International Economic Policy in calling for an "Asia Currency Unit" based on a common basket to stabilize Asian exchange rates and use it in regional trade and asset management.

  Prof. Barry Eichengreen of the University of California at Berkeley proposed Asian nations adopt a dual currency system where they circulate both the national currency and the Asia Currency Unit simultaneously.

 

17 August 2005  "Malawian economists caution on SADC common currency "  from the Chinese News Agency.

Excerpts...

LUSAKA, Aug. 18 (Xinhuanet) -- Malawian economists from various institutions cautioned the government not to rush in endorsing the idea of having a common currency in the Southern Africa Development Community (SADC) region, local newspaper The Malawi Nation reported Thursday on its website....

  Chancellor College head of economics Ephraim Chirwa said a common currency would benefit Malawi since it would help solve thecountry's problem of insufficient foreign exchange when importing goods from other countries like South Africa.

   But he quickly pointed out that whether it was the right time for the implementation was another question.

   "The benefits are there but it's the conditions for the implementation that are not there," said Chirwa. "There is a need for a fully integrated free trade in the region before we can be talking about having a common currency."

 

17 August 2005 Voice of America: Southern African Development Community considers common currency By Ndimyake Mwakalyelye
Excerpts...

Nations of the Southern African Development Community are meeting in summit this week in Gaborone, Botswana, location of SADC headquarters, but the organization is very likely to do all it can to avoid tackling the Zimbabwe crisis, some analysts say...

But the Zimbabwe crisis did not officially figure on the SADC agenda, dominated by the question of how Africa should be represented on the U.N. Security Council, trade, and regional integration, including a proposed common currency for the area.

 

15 August 2005. "Single currency for southern Africa? "  by Claire Bisseker , The Sunday Times, South Africa.

Excerpts...

   Technocrats in back rooms are laying the foundation for a monetary union that aims for the 14 Southern African Development Community (Sadc) countries to adopt a single currency and central bank by 2016.

    Reserve Bank governor Tito Mboweni, as chairman of the Sadc committee of central bank governors (CCBG), has put his considerable energy behind convergence, going so far as to suggest that the single currency should centre on those of the most powerful economies, SA and Botswana...

The timetable for integration has been agreed to by the Sadc council of ministers. It calls for the abolition of tariffs and nontariff barriers by 2008; an SADC-wide customs union by 2010; a common market by 2015; and a single currency and central bank by 2016...

15 August 2005. "Has the euro got a long-term future? Now may be the time to find out" by Brendan Keenan of the Irish Independent.

Excerpts...

It is very strange that the same people will argue for the idea of large "federal" transfers to under-performing economies, while being dead against the idea that the economies concerned raise the funds themselves by running deficits.

Deficits on their own are no solution to the eurozone's problem, which is poor growth and the related loss of confidence.

But they should be part of the solution, giving governments breathing space while they introduce reforms which will improve their countries' potential growth and increase confidence in their long-term financial stability.

The best time to start such a process is when the economy happens to be on a cyclical upturn anyway. Such an upturn may now be under way in the eurozone, although oil prices and currency movements remain a danger to this optimistic view.

If it is, what should be the ECB response? The Bank cannot ignore the changed politics of Europe either.

The project which brought forth the ECB may not survive unless the mood improves among the citizens who use the euro.

The ECB was probably right to refuse to cut rates, which would do little good in present circumstances.

But it might also be right not to raise them as quickly as its models suggest if circumstances improve.

The euro area needs a period of above-average growth if governments are to have any chance of tackling its underlying weaknesses.

9 August 2005. "Asean 38-years-old, and not 'sexy' enough" by ACHARA ASHAYAGACHAT in the Bangkok Post.

  Asean is facing two big challenges, realising a single market and production base by 2012 and making itself known and accepted by the 600 million population of the region, experts said yesterday.

  They were speaking at a seminar to commemorate the founding of the Association of Southeast Asian Nations (Asean) 38 years ago.

  Krirk-krai Jirapaet, former permanent secretary of commerce, said the regional grouping's aim of a single market and production base by 2012 by six of the 10 Asean members could be achieved only through "planned evolution''.

  "To have a real free flow of capital, technology and people, not to mention a common currency, the leaders must have the political will to make it happen, along with liberalisation of the mindset of each country's bureaucrats,'' he said.

 

7 August 2005.  Niall Ferguson considers the possible Italian withdrawal from the euro: " 'Italy despairs of euro' - in normal times, it would be front page news"  from the Daily Telegraph, U.K.  (Published in the Los Angeles Times on 8 August as: "Don't bank on the lira")

Excerpts...

...The Italian turn against the euro does not, it should be stressed, mean that the single currency will fall apart tomorrow, devoutly as some Eurosceptics would wish to see that. Both Maroni and Berlusconi have their eyes on next year's elections, which it is quite possible that their four-party coalition will lose. In any case, there is no exit clause in the treaty of Economic and Monetary Union. Unilateral secession of the sort the Italians seem to be contemplating would have unforeseeable but certainly high costs as investors fled Italian assets and shunned whatever "new lira" the Bank of Italy printed. ...

   How far can this recession legitimately be blamed on the euro? The obvious answer is that Italian exporters have fallen victim to the currency's recent strength. In the two years from February 2002 the euro appreciated by nearly 50 per cent against the dollar; only in the past few months has it shown signs of weakening. Nothing is easier than for Italian politicians to accuse the European Central Bank of being too slow to cut interest rates - especially now that it is run by a Frenchman. Yet this will not quite wash. For one thing, Messrs Maroni and Berlusconi are conveniently forgetting that it was the euro that saved Italy from a looming fiscal crisis. In the mid-1990s Italy's public debt was the highest in Europe at 125 per cent of GDP; interest payments were consuming ever more of the government's budget. Then, at a stroke, EMU cut Italian interest rates by half. That, indeed, was the principal reason the Italians went for the euro in the first place - because it promised to give them German interest rates. And it delivered...

   But if the delightful things about Italy really are to remain unchanged, something more than monetary musical chairs is now needed. To change currency once in the space of six years is unfortunate. To do so twice would look like negligenza.

 

7 August 2005.  From the Pakistan Daily Times: ‘Euro may become top reserve currency by 2022' ]

  Quoting from the National Bureau of Economic Research article, "Will the Euro Eventually Surpass the Dollar as Leading International Reserve Currency?" , the article begins:

  WASHINGTON: The euro could supplant the dollar as the world's dominant reserve currency within 20 years if Britain and other European Union countries adopted the unit and the greenback continues to slide, a recent study showed.
The paper, released by the National Bureau of Economic Research this week, outlined two key criteria for a change of the current status quo — where about two thirds of world's central bank reserves are denominated in the US currency. First was the scope for expansion of the euro zone so that it tops the gross domestic product of the United States and envelops London's dominant international financial center....

4 August 2005. "Editorial View: A common currency will be its own politics" from the Times of India.

  By now, globalisation has become a cliche. But the creation of regional economic blocs is an unmistakable trend, witness the growing numbers coming into existence — the EU, Nafta, Mercosur, Asean, Ecowas, Apec, SADC, GCC, Saarc, to name a few. South Asia is no stranger to this trend. India has already concluded free trade agreements with Sri Lanka, Nepal and Bhutan, and is negotiating one with Bangladesh. Realising the imperatives of regionalisation, the 2004 Islamabad summit committed itself to the creation of a South Asian economic union.
For an economic union to work, a common currency is the logical next step. Europe has the euro, the GCC is negotiating a common currency, many countries peg their currency to the dollar. A common currency reduces transaction costs, removes uncertainty about exchange rates, and promotes pricing transparency. In economic matters, the vision is often the thing. If South Asian governments were to shed their timorousness and raise the bar by promoting a common currency, they would reap a rich harvest in terms of investments and trade throughout the region.
Political union is not of the essence here. Europe was marked by political disunity in the previous century, triggering two devastating world wars. It was precisely to overcome this divisive legacy that its leaders envisioned a new Europe bound together by economic threads, of which a common currency is the logical culmination. The euro may have become a target of temporary populist scapegoating in certain Western European countries that are struggling economically. But they know that the euro is not responsible for their woes, and their economic condition would worsen if they ditched the unifying currency.
To calm the fears of those who consider it too radical a move in the South Asian context, a common currency could be launched initially as a parallel currency, to run concurrently with existing currencies. As its benefits become widely apparent, it could then be adopted as the sole currency.

[For COUNTERVIEW, see "Political union necessary for such a currency"]

[Also, in response to the editorial, the Single Global Curency Assn. wrote a Letter to the Editor of the Times of India in support of the single global currency, as the logical next step with the regional monetary unions.]

 

4 August 2005. Calling for an Asian common currency in "Call for Asian economic bloc" by Susan Tam for the Malaysia Star.

The article begins:

   ASIAN economies will not be able to expand for long and will lag behind bigger players if a strong monetary union or economic bloc is not formed, finance and economics academician Prof Dr S. Ghon Ree said.

  Asian economies tend to operate as isolated markets which are not integrated into global market activities, a trend that is detrimental to Asia.  

  To tackle this issue, Prof Ghon Ree suggests that an Asian common currency and an Asian Bond Bank (ABB) be implemented. 

  “By having a common currency, it eliminates exchange risks and allows for a more liquid and homogenous bond market,” he told reporters after giving a lecture on Asean+3: Asian Bond Market Initiatives yesterday, the first of a lecture series, titled Tun Ismail Mohamed Ali Chair in Investment and Finance, of Universiti Kebangsaan Malaysia. ...

[See also,  "Currency Unification Can Create Bigger And Deeper Bond Mart" , about Prof. Rhee's recommendations, from the Malaysian State News Agency, Bernama.com.]

 

2 August 2005 Common Currency for Asia? See excerpts in "Viet Nam's contribution to ASEAN praised" from Vietnam News Agency.

  Ha Noi (VNA) - Secretary General of the Association of Southeast Asian Nations (ASEAN) Ong Keng Yong spoke highly of Viet Nam's active contributions to ASEAN's principles of equality and fairness after it joined the regional club in July 1995....

  Regarding the prospect of an ASEAN common currency, Ong said: "Common currency is quite difficult, because many of our countries are just newly independent. Even today, we have some problems. Small countries like Cambodia, Brunei, or Singapore want to have their own currencies because this is part of their national development, part of their sovereignty. They will say, well, we are part of ASEAN, but we don't want to use neither Euros nor dollars, we can continue to use our own currencies. Actually in the finance minister's discussion, we have this problem: We have ten different currencies, as strong as each of us, how can we protect ourselves from attacks of other currency traders? Now the finance ministers of ASEAN will come together and make sure there is good financial cooperation. So there's no need for ASEAN to have a single currency."

 

2 August 2005. "INTERVIEW/Eisuke Sakakibara:Is a common Asian currency the goal?"   By MANABU HARA, asahi.com

  China grabbed the world's attention with its decision to revalue the yuan by 2 percent to 8.11 against the U.S. dollar. More importantly, it also ended the currency's peg to the dollar, linking it instead to a basket of currencies presumably including the dollar, yen and euro. In an interview, Eisuke Sakakibara, a Keio University professor who was known as "Mr. Yen" when he served as vice finance minister for international affairs, said the revaluation itself is less significant than the country's move to a managed float. Sakakibara also said that China's move could open the way for Asian countries to create a common currency in the future. ...

 

1 August 2005.  Death of Willem Duisenberg, "First European Bank President" (New York Times obituary)

BERLIN, July 31 - Willem F. Duisenberg, the blunt-spoken Dutch central banker who oversaw the introduction of the euro as the first president of the European Central Bank, was found dead on Sunday in a swimming pool at his villa in the south of France, the French government said. He was 70....

29 July 2005. Chinese official recommends regional monetary union.

In the article, "Asian bloc to promote economic cooperation"  by Susan Tam in the Malaysia Star, excerpts state

  "...China Development Institute president Prof Li Luoli asserted that China was willing to work with other countries and wanted to change the misconception that the country was a threat. 

He also suggested a single common currency be introduced for Asian economies as part of efforts to promote economic integration. 

  'However, this will pose challenges as the different cultures, mindsets and mentalities in the Asian economies are a hindrance to accepting a common currency, unlike countries in Europe.'..." 

 

22 July 2005. "China No Longer to Peg Currency Only to Dollar"

By DAVID BARBOZA and JOSEPH KAHN, New York Times

The article begins...

SHANGHAI, July 21 - After at least two years of resisting intense political and diplomatic pressure from its biggest trading partners, China said on Thursday that it would no longer peg its currency strictly to the dollar, a step that could allow it to rise gradually in value over time....

9 July 2005. "A Single Global Currency? Sure, why not. But, only if it's Gold and Silver Bullion!"  by Alex Wallenwein

The article begins...

  There is a fledgling organization at work whose aim it is to foment a new drive among academics and financiers - and ultimately among politicians and those who elect them - toward the implementation of a single global currency.

  This organization appears to be a private one, founded by a Maine businessman who once ran for that state's legislature in 2002 and lost. This organization holds annual meetings at the Bretton Woods, NH, mountain resort where the precursor to the current dollar reserve system, originally under a dollar-led gold exchange standard, was first formed in 1944. The first meeting of this organization was held last year. The next one is coming up on July 14 and 15.

 

6 July 2005. Martin Wolf of the Financial Times responds to Single Global Currency Assn. question about G-8 conference and planning for the Single Global Currency. (See below for that exchange and subsequent emails.)

  In a July 2 column, Martin Wolf asked for feedback on what the G-8 conference should do, and the single Global Currency Assn sent an EMAIL with the subject: When will the G-8 initiate the planning for a Single Global Currency?

  His July 6 column, "G8: What is it for and how can it help the planet?" carried the question, among others, and he answered:

    "When will the G8 initiate the planning for a single global

      currency? [emphasis added on website]

  I believe a world currency may be a reasonable objective for the very long term. But it is not politically or, in my judgment, economically feasible at present. Monetary sovereignty is too important to too many countries.

  In addition, the changes in relative prices needed to cope with the rise of China, India and other emerging nations are too large without currency flexibility. So, for the moment, we need to make a success of a world of floating exchange rates."

[To which morrison bonpasse, of the Single Global Currency Association responded by EMAIL:]

    "Yes, but for how long must the "at present" or "moment" last? Given the overwhelming propsective benefits to the people of the world which will come from a single global currency, don't the leaders of the world have an obligation to begin planning for its implementation? Shouldn't the welfare of the people of the world be more important than the clinging to the often poorly used power of monetary sovereignty?  While there is currently stress in the eurozone, the addition of ten new countries over the next few years will reinforce the view that countries CAN choose the right monetary goals, i.e. stability over control. 

    A 20-year plan would be reasonable. Just setting the Implementation Date as a Goal would be a major step and would encourage much needed research. Even announcing a goal of 30 or 40 or 50 years would be helpful. 

    Taking the cue from your August 3, 2004 column where you wrote, " But if the global market economy is to thrive over the decades ahead, a global currency seems the logical concomitant," then cannot reasonable people plan for such a "logical concomitant", even if it's for our children and grandchildren? "

[To which Mr. Wolf responded by EMAIL on 6 July with:]

"Half a century perhaps."

[To which morison bonpasse responded by EMAIL on 6 July:]
"Thanks very much.  If you were to request in your column that the leaders of the world should begin planning for a single global currency by the year 2055, that would be very helpful.  By Setting a Date, you would add a touch of reality to the prospects.
Then people could start to analyze the schedule, with such questions as, "What would the Global Central Bank look like, and by what date would it have to be established?" and "What kind of reserves would be needed, if any?" and even "What should be the name of the single global currency?"
It took about 30 years to plan and implement the euro."

1 July 2005 "Calling for a Global Currency" by Joan Veon, WorldnetDaily.com

    BASEL, Switzerland – The Bank for International Settlements today released their 75th Annual Report to commemorate its founding in 1930....

   Recommendations include what several academics have suggested by way of establishing a single international currency or perhaps moving to regional currency blocks such as the dollar, euro and renimbi-yen. A year ago, former U.S. Federal Reserve Chairman Paul Volcker told WorldNetDaily: "A new mechanism was needed for the world financial system" and that "in a globalized world, we should have an international currency ."

[See, also, Joan Veon's 16 August 2003 article, "DOES THE GLOBAL ECONOMY NEED A GLOBAL CURRENCY?" at her website.]

30 June 2005. 75th Annual Report of the Bank for International Settlements - notes that a single global currency might solve the world's financial imbalances.

In the "Conclusion, How might imbalances be fixed?"

   "....Several academics have suggested the establishment of a single international currency.  In the context of the impossible trinity, this would imply national authorities relinquishing domestic monetary control and moving away from still existing capital controls. A more realistic recommendation might be to have a small number of more formal currency blocs (say, based on the dollar, euro and renminbi/yen), but clearly they would have to float more freely against each other. Nor would such a system avoid the possibility of excessive capital flows, based on misguided optimism about one currency bloc or another, leading to disruptive exchange rate changes and associated international resource misallocations." (page 151).

 

13 June 2005. Book review of the book about the "Copenhagen Consensus" project from "The Hindu - India's online newspaper": "Economists may have some answers... but not all "

The book, "GLOBAL CRISES, GLOBAL SOLUTIONS : Bjorn Lomborg — Editor; Cambridge University Press" has a section on "financial instability" by Professor Barry Eichengreen of Stanford.

The review states:

"In his chapter on financial instability, Barry Eichengreen considered four proposals: re-imposing capital controls, re-regulating domestic financial markets, creating a single world currency and pursuing a solution to the currency mismatch problem wherein international financial institutions borrow and lend in emerging market currencies. The first two he dismisses as cost-ineffective, the third as desirable but politically unfeasible, and the fourth as the one most likely to succeed. The panel, however, felt the "uncertainties" and "complexities" in the field were too great to endorse any of these proposals. If Nobel laureates could not make up their minds, one wonders what lay bureaucrats and politicians are expected to do."

[emphasis added here in bold]

[To read Professor Barry Eichengreen's entire submission for the Copenhagen Consensus project, see "Financial Instability".  After noting the benefits of a single global currency, he states, "Thus, the lack of a mechanism for political accountability is a serious obstacle to the creation of a single world currency.  This is why many obervres regard this option as politically unrealistic over the timeframe relevant for practical policy making." (page 30)

 

12 June 2005. From the Khaleej Times, a good summary of the work of the GCC (Gulf Cooperation Council), including plans for the 2010 Monetary Union:  "GCC member states need to decide on common currency"

Of the common currency, the article said:

    The formation of the monetary union (MU) itself has both benefits and costs. On the one hand, benefits are mainly presented by the attractive characteristics of the new unified GCC market. The MU would result in a reduction in foreign exchange transaction costs, eliminate exchange rate risk, promote pricing transparency and, consequently, increase competition, thus fostering trade, investment and growth. At micro level, the single currency would have a long-term impact on major regional banks by encouraging more efficient use of cash. The costs of hedging against exchange rate volatility would be reduced.

    The GCC MU would lead to the formation of the largest and most liquid capital market in the Middle East. Portfolio managers and private investors would be able to invest in the region without any fear of additional currency risk. On the other hand, costs of the GCC MU are expressed by the loss of national sovereignty due to relinquishing of independent control over domestic monetary, fiscal and exchange rate policies. There also might be possible net loss in income due to lack of ability to pursue expansionary monetary and fiscal policy during periods of falling oil prices.

    Furthermore, the GCC MU would involve arbitrary restrictions on national budgetary policies, which could be interpreted as a breach on member countries' control over their individual taxation and public spending programs. Nevertheless, such costs are not of much significance when considering the benefits generated by the formation of MU. The GCC countries decided to take necessary actions to form a Gulf Monetary Union (GMU) by 2010. They already have similarities that reinforce this union.

From the economic side, oil exports are the major source of government revenue for these countries. GCC governments emphasize the importance of the diversification of their economies to spur economic performance. Unfortunately, despite members' efforts to align their economic policies over the past years, a large gap still exists among members, mainly in public debt and budget deficits. In addition to what mentioned above, the six countries are neighbors with common borders. More important, the majority of their citizens has the same religion, language and traditions.

    An important issue is addressing to which currency is the GMU going to peg its new currency given that all GCC currencies are pegged to the dollar. The single Gulf currency is argued to either be pegged to the dollar or to a basket of world's leading currencies including dollar and euro.

    Another possibility could be not pegging the currency to any other currencies at all, thus making it float. This last option might be the best choice to reflect market values and be independent in policy making and to avoid being highly affected by the negative performance of other currencies.

 

6 June 2005.  Fiji Times publishes interpretation of EU Constitution votes, by Prof. T.K. Jayaraman (also a presenter at the upcoming 2d Annual Single Global Currency Conference): "Lessons from the EU"

   Of the euro, he wrote:

"The EU and the emergence of the single currency for 13 states in 1999 stands testimony to a great marvel of the new Millennium."

 

5 June 2005.  The New York Times Magazine published an article, "Believing (and Believing and Believing) in Bullion" by Stephen Metcalf

     The article described the world's continuing fascination with gold as a reserve for currencies.  In response, morrison bonpasse of the Single Global Currency Association wrote the following letter:

"To the Editor:

    As the world moves inexorably toward a single global currency, and the sooner the better, gold will likely become less relevant as a reserve for the monetary system.  Instead, units of money used worldwide will become more like units of measurement, (e.g. meters, liters, grams) accepted by all.

    With a single global currency, there will be no fear of national currency crises, nor imbalances of payments, nor currency speculation, nor national manipulation of currency values.   The euro, and the currencies of other monetary unions, have shown the way to the single global currency.  What's needed now is a Bretton Woods-like global financial conference which sets the goal of a single global currency and the timely benchmarks toward implementation.  Why wait for a major currency crisis to show the way?"

 

2 June 2005 (but originally posted on the web on 23 August 2004)  Nouriel Roubini responds to Martin Wolf's article (see 8 August 2004, below) with blog on his website: "A Single Global Currency? Not Any Time Soon Nor in the Long Run in Which We Are All Dead"

In summary, Roubini wrote:

  In summary, not only is the likelihood that we will see a single global currency in our lifetimes slim; it is also a bad idea to begin with. It is still possible that, in 20 to 30 years, the number of national currencies may be significant smaller. If, and that is a big if, the Euro/EMU experiment is successful, most of an integrated greater Europe would eventually be under a single currency. In the Americas, a few more countries (on top of the recently dollarized Ecuador and El Salvador) may also decide to unilaterally dollarize. A NAMU (North American Monetary Union) including the USA, Canada and Mexico would make some economic sense but it is politically unlikely to come alive. So, the process of monetary unification in the Americas will be slow at best and based on unilateral dollarizations rather than formal Monetary Unions as in the EMU. ....

  Thus, while it is not far fetched to believe that in 30 plus or so years, there may be three broad currency blocs with the world, one in the Americas anchored around the US dollar, one in Eurasia anchored around the Euro and one on Asia anchored around the Yen or the Yuan, we could expect, at most three global currencies in our lifetimes, certainly not a single global currency. And even this process towards three main global currencies is likely to be bumpy and highly uncertain: unilateral dollarizations in the Americas may have little appeal to most Latin economies if they do not imply a road to a symmetric monetary union, an idea that is a politically toxic in the US. In Europe, the EMU has still to prove itself before it can become the currency of all the EU 15, now 25 and soon 30-40 plus members. And in Asia, monetary and currency stability may depend on the resolution of the question of who will be the political and economic hegemon of the region: Japan, now China, or maybe India in some future?

  So, for the time being a single global currency in the next two decades? Not a fat chance of that happening and/or being desirable!

 

 

30 May 2005.  Nobel Laureate Robert Mundell intended to deliver a speech in Beijing entitled, "Reason for a World Currency", but, in response to the needs of the day, changed it into "A Great Debate on the Exchange Rate of RMB".  See "Setting limits on China's textiles not in US-EU interests"  (from the Peoples Daily Online)

 

24 May 2005.  "Euro zone may catch dollar deficit disease"   (from Reuters)

Excerpts of the article...

LONDON (Reuters) - Budget and current account deficits have ravaged the dollar in recent times, but they may pose a more damaging long-term threat to the euro....

   The euro zone's current account balance is already flirting with a shortfall. After posting a deficit of 7.9 billion euros in March, the first quarter 2005 balance showed a slim surplus of 8 billion....

    Ratings agency Standard & Poor's warned earlier this year rising healthcare and pension costs could push sovereign ratings on rich nations including France and Germany to junk status in 30 years unless they tighten their fiscal belts.

   "But the euro zone governments can't respond by printing more money, expand money supply and monetise the debt because they don't have their own currencies," Pearson said.

  "They have a common currency controlled by the ECB (European Central Bank). The last resort that sustains sovereign, domestic currency debt ratings in almost all eventualities is not there."

[Interesting short glimpses at the perceived effects of national fiscal problems on the value of a common currency.  The reference to Standard & Poors shows how national indebtedness can affect debt ratings, but the effect on common currency value is still uncertain.   SGCA]

 

24 May 2005.  "Trichet sees 'relatively moderate' euro zone growth in 2005 and 2006 UPDATE"  (from Forbes.com)

Excerpts of the article...

   BRUSSELS (AFX) - European Central Bank president Jean-Claude Trichet said he expects the euro zone to post 'relatively moderate' economic growth this year and next....

   He said all euro zone countries are benefiting from monetary union, including Germany.

   On Friday, German Economy Minister Wolfgang Clement said his country's economy has become an unwitting 'victim' of the ECB, whose inflation-focused monetary policy has contributed to a dampening of growth.

   But Trichet said all euro zone countries, including Germany, are enjoying the lowest level of interest rates that they have experienced since World War II.

24 May 2005.  "Portuguese Deficit to Reach 6.8% of GDP This Year"  (by Jeffrey Lewis, Bloomberg.com)

Excerpts of the article...

   "May 23 (Bloomberg) -- Portugal will have the highest budget deficit of any country using the euro since the common currency was introduced in 1999, the government said today....

   Portugal was the first country to admit breaching the EU deficit limit in 2001. France and Germany have gone over the limit every year since 2002, and the EU's statistics office said today that Italy did so in 2003 and 2004.

   Changing Rules

   Germany, Italy and Greece are also expected to join Portugal in exceeding the deficit limit this year, according to the European Commission.

   Germany and France, the euro area's two biggest economies, in March convinced European finance ministers to loosen the budget rules in certain circumstances that, not coincidentally, affect them."

[A key question remains for supporters of the single global currency, and, in the interim, regional monetary unions: Do political restraints on government fiscal deficits have any real effect on the value on the common currency?  Aren't market forces, which consider total indebtedness and other economic factors, sufficient to deal with the costs of government borrowing? SGCA]

  


23 May 2005.  "GCC monetary union slow progress" (from ameinfo.com, UAE)

    "GCC central banks should be prepared to give up some of their monetary powers to a common monetary authority to make the single currency a success, Central Bank of Kuwait Governor Sheikh Salem Abdulaziz Al Sabah told Kuwaiti daily Al Watan. He said that GCC states have made only modest progress towards laying the ground for a planned single currency by 2010."

 

7 May 2005  "Economic ‘integration of Asia is new key priority’ for ADB"  (from the Gulf Times, Qatar)

Excerpts of the article...

    ISTANBUL: The president of the Asian Development Bank (ADB) closed the organisation's annual conference in Istanbul yesterday with a warning that further economic integration of Asia was essential.
    ADB president Haruhiko Kuroda said that despite rapid economic growth in the region, small and medium-sized countries risk being left behind unless their economies are integrated with Asia's giants....

   Analysts at the conference said, however, that integration would take time and options like a European-style common currency and single market were still very far off.

2 May 2005.  Cyprus, Latvia and Malta join ERM2 (Exchange Rate Mechanism), a key step toward adoption of the euro.  See "Cyprus Takes Big Step towards Joining Euro Zone" in GreekNews, a Greek-American newspaper.

The article, in its entirety...

     Brussels.- Cyprus, Latvia and Malta on Friday joined the Exchange Rate Mechanism (ERM-2), the waiting room for the euro. They have to spend at least two years in the ERM-2 currency regime to show their currencies are stable against the euro within a +/-15 percent band around a fixed parity rate. To adopt the euro they also have to meet criteria on long term interest rate convergence, inflation, public debt and budget deficits as a ratio.

   This, together with the signing of EU accession treaties by Romania and Bulgaria on Monday, is a signal EU integration was moving ahead despite growing market concern about the bloc's ability to organize itself, economists said.

"If we can enlarge the Economic and Monetary Union in the present situation, it's a signal that things are going well," said Lars Christensen, senior analyst at Danske Bank.

 

2 May 2005  Single Global Curency Association responds in Letter to the South China Morning Post to Chief Executive Tsang's comments (See 24 April, below) about an Asian common currency:  "Single Global Currency":

Regarding Chief Executive Tsang's call for an Asian common currency and Jonathan Ishaque's 28 April response, may I suggest that THE answer to the world's currency problems is the Single Global Currency.  If the Europeans can plan and implement a currency within 30 years, why cannot their example be copied by the world in another 20?  The Asian common currency would be an excellent interim step, but the real goal should be a Single Global Currency.

   With a Single Global Currency, the world will save hundreds of billions of dollars/euros annually in avoided transaction costs. (Do the math at one-half percent with $1.8 Trillion traded daily.)  In addition, the world will avoid the risk of currency failures, and the often-cited and bemoaned current account/balance of payments problem.  Do France and Germany now have a Balance of Payments problem?

   Contrary to Mr. Ishaque's view, the Single Global Currency need not be preceded by trade agreements, nor be accompanied by any particular fiscal policy.  With a Single Global Currency, wealth and povery will still co-exist, although having that single currency will assist worldwide comparisons.  Societies and governments will still have to deal with economic growth and disparity. 

   The Single Global Currency Association, www.singleglobalcurrency.org, was established in 2003 to move the world toward that goal, and is hosting the Second Annual Single Global Currency Conference at Bretton Woods, New Hampshire this July 14.

 Sincerely yours,

 morrison bonpasse

President

Single Global Currency Association

Newcastle, ME USA

 

4 May 2005.  Financial Times editorial with good discussion of the dynamics within a currency union: "A currency union needs markets"

Excerpted paragraphs:

    Is it possible to have a monetary union without a political union? This remains a question without a definitive answer. But there is another, more immediate concern. It is whether a currency union can work in countries without a flexible market economy. On this, current European rhetoric and performance begin to raise disturbing doubts....

  Since the launch of the monetary union, Italy's economy has grown almost as slowly as Germany's. But it has failed to use this period to improve its relative position. The government has wasted its opportunities, at least from the point of view of the country if not from that of the prime minister.

    In the old days, Italy would have escaped its trap by devaluing the lira. But those days are gone. What is now required, instead, are years of low inflation and improving competitiveness. Confronted with such a prospect, populist politicians will, inevitably, be tempted by fiscal profligacy. With the credibility of the eurozone's fiscal rules in tatters, that temptation can only grow. Hitherto, markets have treated the debt of member states as if they were almost perfect substitutes. But differences in debt burdens and growth prospects may well call that assumption into question. A failure to ratify the constitution would only reinforce this dangerous tendency.

    Eurozone politicians must explain that a monetary union is not a way to escape the market, but makes responsiveness to market forces even more urgent. The German private sector is equipping the country to cope with the challenges ahead. The same, alas, is far less true of the German government. But it is altogether untrue of Italy's. The only hope for future success is acceleration of market-oriented reforms. Rigid economies will put huge pressure on the monetary union itself. What is at stake in the eurozone's big countries is too important to permit such infantile populism.

 

30 April 2005.  "Asia finance chiefs meet at ADB amid yuan talk" JP Morgan economist predicts monetary unon. 

from Pakistan Times.

   LONDON: Finance officials from Asia, which has two-thirds of the  world's foreign exchange reserves, meet next week as speculation reaches fever pitch about a Chinese currency revaluation that could rock global markets.

   Asian finance ministers and central bank officials will attend the annual Asian Development Bank meeting in Istanbul to discuss the economic outlook, the risks they face and ways to prevent a repetition of the 1997/98 Asian financial crisis.

   Asian central banks have more than $2.5 trillion of reserve assets, an arsenal that has grown rapidly in recent years as they intervened in markets to curb the export-damaging rise of their currencies against the falling dollar. ...

   “It is in their self interest that Asian economies which have some kind of dollar standard move to a more flexible regional arrangement,” said David Fernandez, head of Asian economic and sovereign credit research at JPMorgan in Singapore. “I am a big believer that we are on a path that will take us to cooperative monetary union in Asia.” ...

28 April 2005.  John Nash, Nobel Prize winner, discusses global currencies: "Nobel winner Nash critiques economic theory"

Exerpts from a talk at Brown University, from the Brown Daily Herald.   

Nash's lecture, "Ideal Money and Asymptotically Ideal Money," centered on the connection between fluctuation in inflation and exchange rates and the perceived long-term value of money.

  "Good money," he argued, is money that is expected to maintain its value over time. "Bad money" is expected to lose value over time, as under conditions of inflation.

  .... He proposed that international exchange rates be fixed by pegging the value of each currency to a standardized basket of commodities, called the "industrial consumption price index." Such a policy would curtail the ability of central banks to make monetary policy.

   ....Nash said his system would be more stable and sustainable than the gold standard because exchange rates would not be seriously affected by fluctuations in any one commodity.

   ....Nash responded with caution to the suggestion from an audience member that a system of currencies approaching perfect stability would ultimately produce a system with only one world currency.

   "There's nothing wrong with it," Nash said. But he added, "In practice, I'm a little distrustful of the politicians at the level of the United Nations and elsewhere," who would be in charge of administering a world currency.

 

 

24 April 2005.  Acting Hong Kong Chief Executive, Donald Tsang, talks about Single Asian Currency: "Single Asian currency key to stability"

In excerpts of his speech, he said:

   "....Should there be a single Asian currency?

Before we answer this question, we need to ask: Why do we need a single currency? 

     Single Asian currency can facilitate unity

The simple answer is that if there is a sense of Asian unity, then a single Asian currency can either facilitate that Asian unity or become a common means towards that end....

50 years to achieve a single currency

    Second, Asia is unlike Europe that needed a single currency as part of a political union, and Europe has worked towards political and economic integration for over 50 years before the birth of a single European currency in 2001.

    Even with common objectives, it took half a century to achieve a single currency.

    Third, the rise of the Euro has created a serious alternative to the US dollar, and it is not currently clear whether there is room for a third global currency.

    We must not forget that the Europeans experimented with different currency arrangements, such as the snake or crawling peg, which were subject to many speculative attacks before the Euro was successfully launched.

   Can Asian unity and common understanding withstand such speculative attacks against Asian currencies during this transition?

    Fourth, a single common currency requires deep and robust financial systems and markets, including strong institutional support.

    Asia has just recovered from a crisis of global proportions, in which many domestic weaknesses in our financial systems have been exposed. Is our institutional and market base ready for the launch of such an important and strategic initiative?

    All these are serious questions, requiring serious answers before the way forward is clear. 

    But the benefits of globalisation and Asian economic integration are clearly strong incentives for us to think about whether we should work towards a single Asian currency."

 

14 April 2005.  "East African currency coming"  (News24.com - South Africa)

The article begins:   

"Nairobi - Kenya is pushing ahead with plans for an East African political federation with neighbouring Tanzania and Uganda that would create a common currency and constitution for the three nations by 2010.

Taking the lead on the project, President Mwai Kibaki's government announced late on Wednesday it would take the proposal to the Kenyan public in a bid to win support for expanding a three-way customs union that took effect in January...."

 

14 April 2005.  "Asian bank will issue bonds in local currencies to help markets"  (Financial Times)

Two excerpted paragraphs:

     "The Asian Development Bank will soon issue local currency bonds in Thai baht and Philippine pesos, and a further Malaysian ringgit bond, as part of its drive to promote Asian bond markets, Haruhiko Kuroda, ADB president, said in an interview yesterday. ...

     Mr Kuroda, previously a senior official at the Japanese finance ministry, took over as head of the ADB this year and is eager to push forward financial and economic integration in east Asia.

     Asian finance officials accept that economic disparities between rich and poor nations, as well as a recent upsurge of nationalist feeling in Japan, China and South Korea, make any kind of monetary union impossible in the foreseeable future. Less ambitious forms of financial co-operation and integration, however, have made steady progress....."

 

12 April 2005.  International Herald Tribune.  "The Chinese-Japanese cold war" by William Pesek, Jr. Bloomberg News.

... Cooperation has never been more vital. Asians still ship vast amounts of savings - funds that could be used at home on roads, schools and stimulating entrepreneurship - to the United States, where it is parked in Treasuries. The arrangement keeps U.S. borrowing costs low, though it's not clear how much Asia gets in return, other than slightly cheaper exports.

  Japan, China and South Korea should be mulling ways to bring that money back home. They need to step up efforts to develop Asian bond markets, reduce trade barriers and adopt a common currency....  (emphasis added)

 

10 April 2005.  "Countdown to Monetary Union"

(Allafrica.com)

The article begins:

   IN three months' time the West African Monetary Zone (WAMZ) will launch its monetary union with the commencement of operations of the West African Central Bank (WACB). The West African Monetary Institute (WAMI) is therefore expected in April (this month) to make final assessment of the member countries' readiness for the monetary union....

 

9 April 2005.  Business Week:  "Inflation in Ireland falls to 2.1 percent"

The article begins:

    "APR. 8 8:10 A.M. ET Annual inflation in Ireland fell last month to 2.1 percent, nearly in line with the European average, the government's Central Statistics Office reported Friday.

    The slight drop from February's rate of 2.2 percent reflected actual price drops for many categories of goods in the Republic of Ireland, one of a dozen countries using the euro common currency. Inflation across the euro-zone averages 1.9 percent."

5 April 2005.  Paktribune.com  "ACD wants common currency, liberal trade"

   " ISLAMABAD: The Asian countries have stressed the need for introducing a common Asian currency, constituting a monitory fund, and liberalizing Asian bonds market and trade.

    At the opening of the High Level Expert Seminar on 'Economic Cooperation in Asia' here in Islamabad on Tuesday, the representatives of Asian countries termed political disputes the biggest irritant in region's economic development and sought any early solution to them for economic progress and stability of entire Asia.

In his address to the gathering as keynote speaker, Khurshid Mehmood Kasuri, the foreign minister, said the emergence of the ACD was a region-wide process reflecting our common desire of self-reliance, consolidation and of building a partnership from the individual strengths of each of Asian states."

 

24 March 2005. U.S., Canada and Mexico Summit.  "North American leaders reach broad agreement on continental co-operation."

   For the Single Global Currency Assn, the news of the conference was what they did NOT discuss:  "[Prime Minister Paul] Martin disputed concerns from critics that the plan would lead to a European Union-style integration with a common currency and customs union."

 

20 March 2005  "EU Clears Hurdle on Euro Stability Reform "  (CBS News)

  The article begins:

(AP)  European Union finance ministers cleared a major hurdle Sunday in efforts to reform the rules underpinning the stability of the euro, meeting German and French demands for room to spend their way out of economic problems, officials said.

   They reported a deal to ease the "Stability and Growth Pact," while retaining its key requirement that a euro-zone nation's annual budget deficit cannot exceed 3 percent of gross domestic product.

   The agreement ended five months of tortuous negotiations during which Germany and France led demands that the stability rules be interpreted less strictly by the European Commission to giving governments space to stoke growth by increasing public spending.

15 March 2005  "Should markets care about the EU budget pact?" (by Jeremy Gaunt)

LONDON (Reuters) - Call it deficit attention disorder.

Financial markets are taking scant notice of the European Union's struggle to revamp its budget rules, dismissing the risk of a fiscal crisis that could rattle ratings, hammer bonds, send interest rates soaring and hit equities.

It is a worst case scenario, to be sure, but some investment strategists see an underlying danger in the rather blase attitude of markets towards deficits and attempts by EU governments to revamp the discredited Stability and Growth Pact.

"Markets don't care. That's a concern," said Andrew Bosomworth, a senior vice president and portfolio manager with U.S. bond fund PIMCO in Munich.

"The bond market is not acting as a warning instrument as it did (with) the 1980s' U.S. budget deficits," he said.

The Stability and Growth Pact, designed to keep EU budget deficits within 3 percent of GDP, essentially blew apart in late 2003 when France and Germany were deemed to have repeatedly broken the rules but no action against them was taken.

Since then, moves have been under way to craft new, looser rules -- to incorporate, for example, a number of generous let-out clauses. But no agreement has been reached, including at an overnight negotiating session last week.....

 

9 March 2005.  "Bankers see hurdles to African monetary union"  (Reuters)

The article begins:

JOHANNESBURG (Reuters) - Southern Africa faces an uphill battle to achieve a proposed monetary union similar to the EU as it battles to emerge from conflict and widespread poverty, regional bankers said on Wednesday.

South African Reserve Bank Governor Tito Mboweni last month announced that the 13-member Southern African Development Community (SADC) was targeting a single currency by 2016.

Mboweni said after a meeting with his southern African counterparts that targets would be set for inflation, budget deficits and foreign exchange reserves, with penalties for countries that did not meet those goals.

 

 

2 March 2005.  "African currency union to miss target"(Financial Times, by David White)

The article begins:

    Plans for a new common currency shared by five West African countries are unlikely to be ready by the targeted July launch date, Charles Soludo, governor of Nigeria's central bank, said on Wednesday.

    Speaking to journalists in London, he was reluctant to prejudge the outcome of a review, due in May, to assess preparedness for the new currency, the Eco.

    But he said the five countries Nigeria, Ghana, Sierra Leone, Guinea and Gambia, with a combined population of 170m would probably have to fix a more credible timetable.

    From all indications, at least from a practical point of view, it doesn't seem you're going to have the Eco by July 1,” he said. The five partners, initially with the addition of Liberia, agreed on the principle of a common currency zone to promote regional trade and growth five years ago, but they missed their original 2003 launch date.

    The ultimate aim of the plan is to merge the new zone with the existing CFA franc monetary union, which embraces eight other, mostly French-speaking, nations of West Africa. The CFA franc is tied to the euro. The details of a combined 13-nation zone have yet to be decided.

    Plans for the new Eco currency are subject to convergence criteria based on the Maastricht treaty macroeconomic targets that were used for launching the euro in 1999.

28 February 2005  "Southern Africa aims for monetary union by 2016"   (from Reuters, South Africa)

The article begins:

CAPE TOWN (Reuters) - Countries within the 13-member Southern African Development Community (SADC) have decided to achieve monetary and economic union by 2016, South Africa's central bank governor Tito Mboweni said on Monday.

"The idea as I said is that by about 2016 there should be a SADC monetary union -- by definition a SADC common currency," Mboweni told reporters in reply to a question.

"What the currency is going to be I don't know -- that will be a subject of negotiation and discussion."

Mboweni was speaking after a meeting of SADC central bank governors in Cape Town, which was also attended by European Central Bank President Jean-Claude Trichet.

[See also Xinhua News:  "S. Africa may introduce single currency by 2016"]

 

25 February 2005.  "Honey, I shrunk the dollar"  (By Thomas Friedman, New York Times)

The column concludes:

    "Why is that sword [of Damocles]getting closer? Because global markets are realizing that we have two major vulnerabilities that this administration doesn't want to address: We are importing too much oil, so the dollar's strength is being sapped as oil prices continue to rise. And we are importing too much capital, because we are saving too little and spending too much, as both a society and a government.

   "When people ask what we are doing about these twin vulnerabilities, they have a hard time coming up with an answer," noted Robert Hormats, the vice chairman of Goldman Sachs International. "There is no energy policy and no real effort to reduce our voracious demand of foreign capital. The U.S. pulled in 80 percent of total world savings last year [largely to finance our consumption]." That's a big reason why some "43 percent of all U.S. Treasury bills, notes and bonds are now held by foreigners," Mr. Hormats said.

    And the foreign holders of all those bonds are listening to our debate. They are listening to a country that is refusing to raise taxes, and an administration talking about borrowing an additional $2 trillion so Americans can invest some of their Social Security money in stocks. If that happened, it would almost certainly weaken the dollar, further depreciating the U.S. Treasury bonds held by all those foreigners.

    On Monday, the Bank of Korea said it planned to diversify more of its reserves into nondollar assets, after years of holding too many low-yielding and depreciating U.S. government securities. The fear that this could become a trend sparked a major sell-off in U.S. equity markets on Tuesday. To calm the markets, the Koreans said the next day that they had no intention of selling their dollars.

    Oh, good. Now I'm relieved.

"These countries don't have to dump dollars - they just have to reduce their purchases of them for the dollar to be severely affected," Mr. Hormats noted. "Korea is the fourth-largest holder of dollar reserves. ... You don't want others to see them diversifying and say, 'We'd better do that, too, so that we're not the last ones out.' Remember, the October 1987 stock market crash began with a currency crisis."

    When a country lives on borrowed time, borrowed money and borrowed energy, it is just begging the markets to discipline it in their own way at their own time. As I said, usually the markets do it in an orderly way - except when they don't.

 

23 February 2005.  "Nursultan Nazarbayev initiates creation of a Union of Central Asian states"   (Kazakh Information Agency kazinform.)

"Astana. February 18.KAZINFORM. \Indira Tulebayeva\- President of Kazakhstan Nursultan Nazarbayev proposed to create a Union of Central Asian states February 18 at the joint session of the Parliament's both Chambers in Astana.
Treaty of everlasting friendship between Kazakhstan, Uzbekistan and Kyrgyzstan may serve a solid base for such a union. Therefore the other states of the region are not excluded. We have common economic interests, cultural and historical roots, language, religion, ecological problems and foreign threat. We have to proceed to close economic integration and move to the common market and common currency.
Integration in Central Asia is a way to stability and progress in the region, its economic and politico- military independence."

 

23 February 2005.  "Skyrocketing Canadian dollar erodes growth, jobs"  (USA Today, by Sue Kirchhoff)

   The article begins:

"HAMILTON, Ontario — As the Canadian "loonie" soared against the U.S. dollar last year, Robert Hattin laid off 30% of the staff at Edson Packaging Machinery, which makes intricate instruments that flip, fold, stuff and glue cardboard cartons ...

...And he wants government officials to protect against future currency volatility.

... Edson's Hattin was one of a group of manufacturers who met with Bank of Canada Governor David Dodge in early January to talk about the loonie. Hattin says that given the diminishing size of the Canadian economy relative to the USA's — despite the North American Free Trade Agreement — means Canada needs to explore a common currency in North America before the Canadian dollar becomes "completely irrelevant." [emphasis added.]

 

22 February 2005.  "Thailand for common currency among ASEAN nations"   (from the Hindu Business Line.)

"GUWAHATI: Thailand is in favour of a common currency among ASEAN countries.

    Mr Tharodol, commercial councillor of the embassy of Thailand in Delhi, said here today that his country would like to have a common currency.....

    According to Mr Tharadol, once other ASEAN countries and India accepted the concept of common currency, it would have an overall positive impact in promoting business and trade in the region. - UNI"

18 February 2005.  "AGCC all set for single currency in five years"

 "DUBAI — Just five years from now, in February 2010, seven Gulf states including Yemen will formally merge their currencies into one, a source said yesterday.

    Speaking to Khaleej Times, a member of Yemen representative in the AGCC Working Committee, said the ministers of finance and economy in the seven Gulf states will meet very soon to decide on the rates at which the currencies of the seven countries will be locked together in the new currency.

   "I was told that all the other six countries are well-prepared for the move except Yemen. We shall definitely do our best to capture the opportunity. We were told to be prepared to pave the way for the new currency zone," he said. ...

   " In my view , these snags won't delay the process. The matter of merging the currencies was discussed several times before Yemen joined the council, and it has been approved by the Supreme Council, it is now in the second stage of technical evaluation, " he said.

   Asked if there will be many obstacles in implementation of the single currency within the scheduled time, the source said," Why should we have problems since our currencies are of the same rates and almost the same denomination of riyal and dirham. The European countries had all the reasons to halt the implementation of single currency, yet they went ahead with determination to become the strongest currency in the world in less than five years."

     Economists say that among the reasons to be cautiously optimistic is the implementation of the customs duty and the similarities of the economic outlook between the six nations. The six Arab Gulf Countries are embarking on the exceptionally difficult job of creating a new currency, but we are quite optimistic and positive, he added. We have no choice but come up with a single currency."....

    "By the year 2010 it will become clearer how successfully the Gulf countries are able to function as one in the Arab and international councils where global monetary and economic policies are decided," he said.

"In fact AGCC states are so close that they are considered by some to be one state. They are all oil-producing countries with the same monetary policies, banking system, the same language, religion and traditions. It is only the bureaucracy that delays the steps needed to be implemented," he said

(Khaleej Times (Business Times), by Salah Eldin Eltayeb)

 

18 February 2005. "Asia's answer to the IMF" New Leader at Asia Monetary Fund, and foundation for eventual monetary union. 

About Asian monetary union, the article noted:

" ASEAN countries have given warm, if qualified, support for monetary union, even awarding the ADB Institute a contract several years ago to conduct regular surveillance of the members' economies, in a pointed intrusion into the IMF's turf.

But as Kuroda has acknowledged, monetary integration is not going to happen overnight, especially as barriers remain at the trading levels through restricted flows of labor, capital and financial services. Liberalization pressures from the World Trade Organization and regional blocs like ASEAN and the Asia Pacific Economic Cooperation are forcing the exports market open, but the deals are still couched in dollars. Neither the yen nor the yuan has the regional recognition as an acceptable alternative; the Chinese currency is directly pegged to the greenback, while the yen's recent history of weakness has hindered East Asian export growth.

While suspicions will linger over Japan's intentions, some analysts believe the debate will eventually come down to a numbers game: unlike the euro zone, Asia simply doesn't have the money on the table to achieve a viable level of currency self-sufficiency. "It is easy to forget that it took two decades or more for the euro zone to come into being, even with the backing of such vibrant economies as Germany, France and the UK. I think they need to develop the swaps arrangement further ... it is going to take at least another US$50 billion to create an effective safety net ," said a European banker. "Japan has its own reasons for keeping the issue alive, but one would have to say it is largely a symbolic exercise at this point in time." "

(Asia Times, by Alan Boyd)

4 February 2005.  "Britain's Money Bad for Tourists" from the Syracuse University "Daily Orange" by Amy McKeever.

This article is about changing exchange rates and the hardships on those who must buy and sell in other currencies - including U.S. Students abroad.  Excerpts include:

   "...From a European perspective, Britain's refusal to completely join the monetary union is selfish and divisive to the fledgling community. From an American perspective, Britain is helping to limit the EU's power thus prevent it from seriously challenging the United States.

   From an American tourist's perspective, though, Britain should probably just switch over to the euro, or, better yet, the dollar. But from a British perspective, the monetary isolationism is just plain smart. Right now the country is experiencing power it hasn't had in a long time and why should it give that up?..."

 

1 February 2005.  from Japan Times, "CHINA-JAPAN MUTUAL TRUST - KEY TO COMMON CURRENCY"

The article begins:

The Economist magazine forecast in a recent issue that a future multiple reserve currency system could include the Chinese yuan: "The world might drift toward a multiple reserve currency system shared by the dollar, the euro and the yen, or indeed the yuan at some time in the future."

Meanwhile, the Nihon Keizai Shimbun reported that 37 percent of the Chinese business executives who responded to a survey believed that the yuan would become a "key currency" by 2020. It may not be surprising, therefore, that a paper outlining a strategy to make the yuan an international key currency was presented at a recent conference of the Chinese Society of World Economy.

As for the yen, the paper said it would remain an international currency but would not become a key currency because Japan (1) is unlikely to possess sufficient national power in terms of politics, the scale of its economy and market size in the years to come; (2) has not succeeded in internationalizing the yen due to a lack of currency strategies; and (3) faces lingering animosities dating back to World War II.

On the other hand, China already has a potential national power advantage, and can strengthen it by maintaining high economic growth and active diplomacy.

The yuan is becoming widely used in China's neighboring countries. As China expands its free trade zone through economic integration with the 10-member Association of Southeast Asian Nations (ASEAN), China should promote wider use of the yuan in the region. At the same time, by cooperating with other Asian countries to set up an Asian currency system, China could create a better environment for making the yuan a key currency.

(By MAMORU ISHIDA)

 

1 February 2005. from Interfax, "Plan to create Russian-Belarussian monetary union approved"

The article begins:

    MINSK. Jan 31 (Interfax) - The top management of the Bank of Russia and the National Bank of Belarus have approved a plan of cooperative measures to provide for the introduction of the Russian ruble as the only legitimate means of payment on Belarussian territory starting January 1, 2006.

    A press release from the Bank of Belarus's press department said that the plan was approved at a session of the two banks' councils on currency on January 28 in Grodno. The Belarussian bank's CEO, Pyotr Prokopovich, and Bank of Russia Chairman Sergei Ignatyev took part in the session, along with other representatives of the two countries' central banks.

 

27 January 2005.  From Bloomberg, "Latvia Is Ready to Link Currency to the Euro, Official Says"

The article by Bryan Bradley begins:

Jan. 26 (Bloomberg) -- Latvia, the European Union's fastest growing economy, is ready to link its currency to the euro in a two-year test period prior to adopting Europe's common currency, a Finance Ministry official said.

Government and central bank officials will tell a team from the European Commission, the EU's Brussels-based executive arm, that the nation can immediately join the exchange-rate mechanism, which tests currency stability before the euro switchover, said Modris Sprudzans, chief adviser to Finance Minister Oskars Sprundzins.

``Latvia is ready to participate in the mechanism and wants to do so as soon as they allow us,'' said Sprudzans in a phone interview from Riga yesterday. ``Our fiscal deficit is the smallest in six years and we're committed to slowing inflation.''

The former Soviet state of 2.4 million people is working to be the fourth of the 10 nations that joined the EU last year to enter the mechanism, following Slovenia, Estonia and Lithuania. Entry would allow it to swap the lat for the euro by 2008, completing the $11 billion economy's integration into Western Europe and reducing exchange-rate risks for companies and banks.

 

21 January 2005.  Senior IMF Economist supports monetary unions.

In a Barbados Advocate article,"US dollar may take over as region's main currency", Delisle Worrell was speaking about further monetary union in the Caribbean, where he was formerly Deputy Director of the Eastern Caribbean Central Bank.

    The surprising ease with which the euro was introduced, and the remarkable early enthusiasm for the new currency, suggests that a common currency may be a powerful instrument of economic integration, creating a sense of common purpose, and a shared economic space, with benefits well beyond the usual calculus of reduced transactions costs arid reserve pooling savings, noted Worrell.

19 January 2005  " W. Africa's new cash making a splash, and it smells good too"   by Laurie Goering, Chicago Tribune

This article about the new currency issued by the West African Central Bank for the West African Franc Zone begins:

   DAKAR, Senegal -- In West Africa, where people are more likely to keep their precious cash tucked in a pocket or the waistband of a pair of pants than stashed in a checking account, money was literally filthy lucre.

   The best of the region's colorful bills were worn thin and faded from being passed continually from hand to hand. The worst emerge from shoes and old pockets damp, limp, reeking and so black and torn they're nearly unrecognizable.

   "Senegalese don't take care of money," complained yellow-robed Massaer Sylla, 26, who works in a cramped storefront money exchange in downtown Dakar. "We get some that are actually black. I can see they're good, but we just can't take them. The next person to come in wouldn't accept them if they can't even see the denomination."

   That all changed at the turn of the year, however, as Senegal and seven of its neighbor states completed the enormous and smelly process of collecting $1.3billion in fetid West African francs and exchanging them for crisp, new, colorful notes.

   `I'm happy now'

    "I'm happy now," said Sylla. "A new bill has such a nice smell."

    Seven French-speaking West African states--Senegal, Ivory Coast, Togo, Benin, Burkina Faso, Mali and Niger--and neighboring former Portuguese colony Guinea-Bissau have for more than two decades shared a common currency. Well before Europe's euro got its start, West African francs, or CFA, were circulating through the region, easing cross-border trade and facilitating commerce.

    The bills--once pegged to France's franc and now to the euro--get around. A Saharan nomad in Niger might hand off a few to a trader from Mali selling transistor radios. The Malian might then buy a few Senegalese shirts, or maybe a load of fish. And the Senegalese businessman might then spring for a cell phone from Ivory Coast.

   In their travels from hand to hand, the bills pick up plenty of character. Green notes gradually turn brown. Red fades to off-pink. Oil stains appear. Gradually the camels and antelope and African masks that grace the notes--even the denomination numbers themselves--become less and less recognizable. By last year, as the former bills hit 12 years old, users were beginning to fear the worst of them as carriers of disease.

    "We'd see them coming out of socks, from inside shorts," said Mbaye Thiam, 28, who runs a cell phone shop from an old container on the streets of downtown Dakar. "But we'd have to take them, no matter what."

   That began to change in September, as the Central Bank of West Africa, based in Dakar, began the long process of exchanging old bills for new. The trading ended Dec. 31, and now, at least for the moment, only fresh new notes are circulating on the region's streets.

19 January 2005  "Dollar's fall hikes cost to eat abroad"   by Saidi Chen, Duke Chronicle (Duke University, U.S.)

The article begins:

     Atkins. South Beach. The Zone. Study abroad? For Junior Christian Bonilla dropping 15 pounds was one of the side effects of spending three months in Florence during a continuing decline in the value of the dollar.

    "Food was a budget casualty for me with exchange rates being what they are now," Bonilla said.  "I spent as little as possible on food so I could maximize my money on travel and things like that."

As the dollar has depreciated about 15 percent in the past three years, tourists and students who travel to Europe now find life a third more expensive than at home. Duke abroad programs have similarly had to stretch their budgets to adapt.

 

17 January 2005 "Most Europeans Pleased With Common Currency "

Angus Reid - CPOD Global Scan) – Many adults in the 12 European Union (EU) countries that use the Euro are comfortable with the common currency, according to the Eurbarometer conducted by EOS Gallup Europe. 52 per cent of respondents say the Euro causes no difficulties.

The Euro has been used in 12 of 15 European Union (EU) countries since Jan. 1, 2002. Sweden, Denmark and Britain were the only EU members that did not adopt the currency.

More than two-thirds of respondents in Ireland, Luxembourg, Greece, Belgium and Portugal report no problems with the common currency. Conversely, less than 50 per cent of respondents in France and Italy concur.

 

17 January 2005  "ECOWAS Authority to fix date for common currency"  

    Accra, Jan. 17, GNA - The ECOWAS Authority would in December 2005 fix a firm date for the introduction of a common sub-regional currency, which would be a merger of CFA and the yet to be introduced ECO Zones. The decision on a common currency for the West Africa Sub-Region was postponed in November 2002, following the decision of the Heads of State of the Second Monetary Zone to defer the launch of the Second Regional Currency until July 2005.

   Speaking at the opening session of the 53rd Meeting of ECOWAS Council of Ministers, Dr Mohamed Ibn Chambas, Executive Secretary of ECOWAS, said a date would be agreed after a detailed appraisal of the performance of the countries of the second monetary zone and evaluation of the level of convergence of the economies of the regions as a whole.

   The two-day session on the theme: "West African Integration Perspectives-Searching for a New Development Model," will consider the annual report of the Executive Secretary, and the report on the status of ratification of the ECOWAS Revised Treaty, Protocols and Conventions. Dr Chambas urged Member States to take additional measures to meet the convergence criteria given the slow and uneven pace of policy convergence.

   The convergence criteria include single digit inflation, foreign reserves equivalent to at least three months of imports, limitation on government borrowing and a budget deficit/GDP of four per cent. Dr Kofi Konadu Apraku, Chairman of Council of Ministers of ECOWAS (Economic Community of West African States), said the five countries involved in the second monetary zone needed to make greater efforts to harmonise both monetary and fiscal policy.

   He lauded the efforts at monetary integration saying that it would help to address the high level of unemployment and high inflation, which had been the bane of the small and fragile economies of the countries in the Sub-Region.

 

16 January 2005.  On Micro-credit in the West African Monetary Union:  "Time to go beyond rhetoric"

The article begins:

The International Year of Microcredit will see the United Nations Development Program (UNDP) focusing on the role of sustainable microfi nance for the very poor in achieving the Millennium Development Goals, especially that of cutting absolute poverty in half by 2015. Although the world is getting giddy over the idea, in Africa, this “poor-credit and self-employment” rhetoric does not sound new. In many African countries, microcredit facilities have been in place for decades, ranging from traditional group-based schemes to specialised lending institutions - all under the banner of enhancing the quality of life of Africa's millions of poor people. In the Union Monetaires Ouest Africaine (UMOA) a 32- year-old monetary union of eight West African francophone countries, the concept of microcredit has been around for close to 30 years. UMOA, which is comprised of Burkina Faso, Cote d'Ivoire, Guinea Bissau, Mali, Niger, Senegal, Togo and Benin, boasts 470 institutions that have microcredit on their daily menu. Microfi nance institutions (MFIs) in the region serve about 4.5 million people.

(from www.businessinafrica.net)

 

12 January 2005.  "EU official: Monetary union with Israel possible"

    EU Commissioner for Industry Guenter Veheugen has come out in favor of stronger ties between Israel and the EU, and does not rule out Israel joining the euro bloc.

In an article for German monthly "Internationale Politik", Veheugen wrote that he could "imagine Israel being widely integrated into the European economic structures", and "being a full participant in the internal market." He added that he would "not even rule out monetary union" with Israel in the long term.

This is the first time that a senior European commissioner has spoken out in favor of Israel one day joining the monetary union. Until now, the EU has scrupulously avoided statements on the subject.

[Perhaps more important than the issue of whether Israel should join the EMU is the question of whether non-European countries can join.  As the enlargement of existing monetary unions around the world is a realistic route toward the single global currency, the Single Global Currency Association supports every such enlargement.  Such enlargement may come through full "accession" to an economic union, but also the short-cut way through the mechanism we call "ization" as in dollarization and euroization and West African francization.]

 

11 January 2005.  "Lahore Chamber favours common currency in South Asian region"

   [World News]: Mumbai, Jan 11 : Pakistani businessmen today favoured a common currency in the South Asian region and said that trade between India and Pakistan has the potential to reach 10 billion dollar in five years from the present one billion.

   "A common currency in the South Asian region on the lines of euro can bring enormous benefits in the region," Senior Vice President of the Lahore Chamber of Commerce & Industry and leader of the visiting eight-member business delegation Sohail Lashari said at an Indian Merchants' Chamber meeting here.

10 January 2005.  "A victory for stability as the euro grows up".

       On the occasion of the 6th "birthday" of the euro, the founding chair of the European Central Bank, Willem Duisenberg, wrote about the common currency's first five years; and pronounced them a success.  He felt the currency fulfilled one major goal and wrote, "...we remained clearly focused on the mandate of price stability."  A major indicator of the success of the euro is that many central banks around the world increased the proportion of their foreign reserves held in euros.

(Bangkok Post)

9 January 2005 "Dollar's drop hits prices, economies"  by William Freebairn of the Springfield (Massachusetts, USA) Republican

This article begins:

   Customers of Grapevine Liquors in Springfield have seen the effects of the decline in the value of the dollar in the last year without knowing it.

   An $11 bottle of French wine goes up to $13 from one week to the next. Cheese prices have crept upwards steadily, as have the prices of almost all foods from Europe.

   "People have noticed some price increases and wonder why," said Ralph Capua, general manager of the Main Street emporium. He said he is trying to add new wines that are a better deal, but that is becoming more difficult.

   Customers and merchants are seeing prices of European goods rise due to the decline in the dollar. However, some manufacturers are seeing an increase in sales to those countries as their prices seem low to foreigners.

   The dollar's decline relative to European and Asian currencies has made imports from those countries more expensive in dollar terms. But the flip side is that U.S.-made products are cheaper and thus more competitive when sold overseas.

The full effect of the slide of the dollar has yet to be felt by many retailers of foreign-made goods.

9 January 2005.  Sixty-two percent of polled residents of proposed East Africa Federation countries (Kenya, Tanzania & Uganda) support a common currency among them.

   In a poll conducted by Steadman Research Services and Gallup International, over 6,000 residents of the three countries were polled.   The questions about currency were among many questions about greater political and economic unity.

(from article in the "New Vision", Uganda's leading newspaper)

5 January 2005.  "'Currency swap in African countries went well' " as 8 countries in the West African Economic and Monetary Union swapped old bills for new bills.

DAKAR - Eight countries in the West African Economic and Monetary Union (UEMOA) have mainly succeeded in a bid to replace an estimated 850 billion CFA francs (1.7 billion dollars) in worn bills for new, more secure banknotes, banks reported.

    The Dakar-based central bank of the nations concerned in September set out to remove the 1992 series of bills from circulation in Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo before December 31.

Yesterday, four days later, banks responsible for the common currency pool, which represents half of the money changing hands in west Africa, were stating that the campaign had gone so well that the general rate of old notes handed in was more than 90% and sometimes up to 99%.

     CFA francs are used both in west and central Africa. Formerly pegged to the French franc, and now to the euro, the currency was devalued in January 1994 in an attempt to reduce its value, which economists had criticised as too high and thus benefiting the urban elite.

 

2 January 2005.   East African Common Currency anticipated by 2010.  From www.news24.com "One customs union for E Africa"

   Nairobi - A treaty designed to to free up trade and harmonise tariffs on goods entering Kenya, Uganda and Tanzania, came into force on Saturday, marking a key step towards the region's integration, leaders said.

    The East Africa Community (EAC) Customs Union treaty, which was signed last March, "will enable businessmen to freely access an enlarged market of over 90 million people and a combined GDP (gross domestic product) of $30b," he added.

    "It will also enable investors in the region to enjoy economies of scale and reduce costs of production. Furthermore, the union will enhance the competitiveness of our products in international markets," Kibaki said.

     Presidents Kibaki, Yoweri Museveni of Uganda and Benjamin Mkapa of Tanzania signed the protocol on the Customs Union in the northern Tanzanian town of Arusha last March.

     A common currency and bank are due to be installed before 2010, as part of a process which will eventually culminate in political integration......

 

2004

7 December 2004.  "Japan's anxiety increases over flagging dollar"

The article begins.

"TOKYO — Japanese exporters, policymakers and investors aren't panicking yet about the dollar's swan dive in international currency markets. They have, after all, seen the dollar plunge to considerably lower depths against the Japanese yen in the not-too-distant past.

But their nervousness, and their need for reassurance from Washington, grows every day the buck sinks further. The dollar has weakened nearly 8% to 103.23 yen since early October..."

(by Paul Wiseman, USA Today)

5 December 2004.  "Why has FX trading surged? Explaining the 2004 triennial survey - BIS Quarterly Review, December 2004"

    This article from the Bank of International Settlements and it notes that the average daily foreign exchange turnover was $1.9 trillion during April, 2004. 

 

26 November 2004  Single Global Currency Assn. writes Letter to Editor, New York Times in response to Stephen Roach's Op-Ed about the declining Dollar.

Stephen Roach argued (11/29, "When Weakness Is a Strength") that a weaker dollar is not a major problem and hedged his bet by concluding, "If the world can manage the dollar's decline wisely...."  That's a big "if", and there will continue to be a lot of big "if's" as long as the world continues to use currencies backed by national governments.

    Europe is showing the world how a stable currency can be managed without reference to the fiscal management of the governments of individual countries.  Ironically, the biggest problem with the euro is the fluctuating value of the U.S. dollar. 

    While the world obviously must manage its way through the current problems caused by the United States' fiscal recklessness, it would do well to begin planning for a single global currency where there would be no balance of payments problems and no risk of currencies collapsing and no currency speculation and no currency fluctuations against other currencies.   As Paul Volcker has written, "A global economy requires a global currency."

12 November 2004.  "Asia's Single Currency - a Dream or a Vision?"  This is the title of the third section of a speech given by Toshihiko Fukui, Governor of the Bank of Japan, at a synmposium in Tokyo on the impact of the euro on Asi "The Euro-Dollar Regime and the Role of the Yen: Their Impact on Asia"

Regarding an Asian single Currency, Mr. Fukui said:

  "If the yen could play a larger role in the global economy, does it mean that Asia would become an "yen economic area?" More generally, could there emerge a currency that becomes an anchor in the region? Furthermore, could we see a common currency area in Asia?

  For the near future, you would agree that this is quite unlikely. Economic structures of Asian economies are not only diverse but also ever-changing. Against this background, foreign exchange regimes vary greatly.

  Without a convergence of economic conditions, it would be most inappropriate to lose flexibility through the adoption of an artificial framework, be it a currency peg or a single currency. Such an adventure could lead to an accumulation of imbalances within the system. Looking back on Japan's experience, such imbalances would always be corrected with a vengeance. This is a lesson that we should never forget.

  Even if we concur that currency integration in Asia is probably a dream in the short term, could it be a vision in the medium to long term? In Europe, it took about 50 years before the euro was introduced. My Chinese friends often tell me that 50 years is just a blink of the eye in their four-thousand-year history. Nevertheless, in this rapidly changing global economy, Asia could have a single currency 50 years from now.

  If this vision is to be realized, economies of the region must pass a few tests.

  First, we need to see further deepening of Asian countries' mutual dependence through division of labor. In this process, Asia would become more important in the global economy.

  Second, we need the development of vibrant financial markets, capital markets in particular, in yen and other Asian currencies. In this context, liberalization of cross-border capital flows within the region is a key element.

  Last but not least, we need to build both domestic and global confidence towards economic policies of Asian economies.

Already, I see encouraging developments in this direction. With regard to the first point, we are seeing a significant strengthening of economic linkages between Asian economies through trade and direct investment. For example, Asia's share in Japan's trade increased to around 45% in 2003 from around 30% in the first half of the 1990's. For the second point, cooperative efforts to develop regional financial markets are beginning to bear fruits. An example is the Asian Bond Fund II project, being developed by the 11 central banks of EMEAP economies, where EMEAP central banks will jointly invest in local currency denominated funds. As regards the third point, central banks in the region are now firmly focused on price stability and there is considerable progress in financial system reforms in each economy.

  These encouraging signals are, if anything, rather endogenous and market driven in their nature.

Yet, if we are to seriously explore the possibility of a single Asian currency, strong political will is going to be essential at some stage.

  This is because, if the Asian economies are to achieve convergence at a high level, rather painful reforms are indispensable. This is obvious if we look how difficult it is in Europe to comply with the Stability and Growth pact.

The introduction of a single currency by itself does not solve problems in each economy. Neither does it yield economic growth. The full potential of a common currency can only be realized in so far as respective economies tackle structural problems in the process of achieving a monetary union.

Asian economies would experience significant dislocations if they were to form a monetary union without disciplined economic policies. In this context, we are paying attention to see if Europe could succeed in advancing structural reform and achieve stronger growth by exploiting the heightened economic potential brought about by the introduction of the euro.

  Before I finish, I would like to emphasize that Asian integration would probably be soft-structured. Each Asian economy should endeavor to increase the attractiveness of their economy and currency for the time being. Initially, this would mean additional flexibility. We can then share our experiences. At the same time, we should ensure that cultural diversities in the region would be translated into creative energy, and not clashes of culture. Only then would we realize stable regional currencies, and the dream of a single currency would become a vision."

October-November 2004. "Elements of global financial stability" in Journal of Multinational Financial Management by Fariborz Moshirian, University of New South Wales, Australia. (and presenter at 2004 Single Global Currency Conference)

Abstract:

The purpose of this paper is to discuss the processes of financial and economic unification that led to the emergence of the Greenback, as the single currency of the US , and the Euro as the single currency in the European Union. It will then discuss the issues related to a single global currency in the context of the IMF's promotion of global financial stability as one of the key global public goods. The conditions associated with the theory of the "optimum currency area" including asymmetric shocks and the mobility of capital and labor are analysed in the context of the processes of globalisation and international security. The paper indicates that the mobility of capital, active participation of MNCs and institutional foreign shareholding have created a global economy in which capital now meets labor rather than, as in earlier decades, labor migrating to locations offering employment, which in turn has significant implications for the conditions attached to a global single currency.

July/August 2004. "Beyond Kyoto" in Foreign Affairs, by John Browne, Chairman of BP Inc.

Speaking of the single global currency in passing, he wrote...

  "...Emissions trading systems need not be indentical in every country, nor be applied universally from day one. The political reality is that we are unlikely to see the sudden emergence of a single regime; in scope and ambition, that would be comparable to the emergence of a single global currency....

 

April 2004.  Announcing a Global Currency Design Competition

    The company, Incide, which is proposing the name "ONLY" for the future Single Global Currency, is sponsoring a graphic design contest for the notes of that currency.  For more information click on Competiton.  A principal in the company, Allard Marx, will be addressing the Single Global Currency Conference on July 9. 

15 February 2004 - Malaysia to have chapter of Single Global Currency Association. 

Ariivazhagan Supramaniam, of Kuala Lumpur is starting a chapter in Malaysia.  He is a futures trader and formerly traded in currencies.  Please contact Ari by email

10 October 2004.   "MUNDELL: A WORLD CURRENCY IN THE LONG RUN"

    From an Italian News service, "AGI Online" comes this article:

(AGI) - Florence, Italy, Oct.11 - Nobel prize winner Robert Mundell reckons that the "long-term goal is world currency", and proposed to call it "Intoro". That's what he said at the international congress of financial directors in Florence. Intoro stands for "oro internazionale, international gold", because the new currency "should be based on the only international metal system, which is gold. The mechanism is similar to the one of the Breton Woods agreement, and is to involve the IMF, perhaps with an initial agreement between the 3 main currencies, euro, US dollar and yen. The following step would be a temporary currency named 'dey' (dollar, euro, yen), and it could then include the pound sterling and the yuan. Such a monetary reform would then lead to the brand new international currency, Intoro". (AGI) -

 

"Is the Euro Good for Europe? "  by Peter Gumbel, Time Magazine, Europe.

Subtitle: "It's the coin of the realm in 12 European countries. But has the euro accomplished its goals? TIME puts the single currency to the test"
    This thorough review of the effects of the euro paints a balanced picture. Six criteria were evaluated: Economic Growth, Prices, Inflation, Impact of Business, Trade, and International Acceptance.

     It was noted that if, or when, the U.K. joins the euro, the international acceptance will increase.  Also, intra-Europe trade and investment has increased partly due to the elimination of the previously existing currency risk.  However, the currency risk with international trade continues, as the euro fluctuated dramatically against the dollar. (Time Magazine, Europe,  4 October, Vol 164, No. 13)

[See, too, the "Letter to the Editor of Time-Europe" from the Single Global Currency Association where we pointed out that the euro is pioneering the path to the Single Global Currency.]

"The Esperanto of Money" by David R. Francis in the Christian Science Monitor.  (12 August 2004)

       After noting the advantages and disadvantages of monetary unions and a Single Global Currency, the article concluded:

      "Proponents are pushing for more. Last month, Robert Mundell, a Columbia University economist and Nobel laureate, and a small group of economists and officials considered plans for a world currency at his personal conference center in Siena, Italy. It is Mr. Mundell, famed for his supply-side economic theories, who talks of the "dey."

     Also last month, the Single Global Currency Association held a conference on a world currency. It attracted only eight speakers and three attendees, says Morrison Bonpasse, who sold his temp agency last year to form the group. His timetable for a world currency: 2024."

[This article also now appears on MSN MoneyCentral as "Are you ready for a global currency?"]

12 August 2004.  "LETTERS TO THE EDITOR [of the Financial Times]: America's twin deficits may not be all bad news"   by A. Edward Gottesman, New York

Excerpts from the letter...

   Sir, There is a striking - and somewhat alarming - congruence between two letters that appeared side-by-side on August 5. The eminent Cambridge economist Wynne Godley correctly points out that the US government cannot effectively reduce its budget deficit while the large external current account outflow persists and private sector income remains at about the same level as private expenditure....

   Maybe those twin deficits are not so bad after all. In a world with a single global currency, as Martin Wolf suggested a few days ago, the deficits would not matter.

6 August 2004. "LETTERS TO THE EDITOR [of the Financial Times]: Even without a global currency, measures can be taken to guard against threat of instability"   by Jerome Booth.

The letter begins...

   Sir, I sympathise with Martin Wolf's endorsement of Robert Mundell's vision of a single global currency but also share his realism that this is not likely in the foreseeable future ("A global market economy needs a global currency", August 4). In its absence, there are other policy avenues that can help encourage capital flows to developing countries while reducing the disruption of currency shocks. [emphasis added on website]

"Global currency is the answer to unstable world economy"

     Writing in the Financial Times (but this web copy comes from "the Straits Times"), Martin Wolf writes, "But a bigger question needs to be addressed - whether floating exchange rates have proved to be the ideal replacement for the unsustainable adjustable exchange-rate pegs of the Bretton Woods monetary regime. The answer is: no....

      A world in which borrowing abroad is hugely dangerous for most relatively poor countries is undesirable. A world that compels the anchor currency country to run huge current account deficits looks unstable. We should seek to lift these constraints. The simplest way to do so would be to add a global currency to a global economy. [emphasis added] For emerging market economies, this would be a huge boon.

      I am well aware of the economic and political objections to this idea. But if the global market economy is to thrive in the decades ahead, a global currency seems the logical concomitant. In its absence, the world of free capital flows will never work as well as it might. This is a world I am unlikely ever to see. But maybe my children or grandchildren will do so."  (8 August 2004, originally 4 August in Financial Times)

 

Euro Turns Five Years Old - A report from the European Commission.

      "Amidst little fanfare but plenty of ritual back-slapping, the European Commission published a report on economic and monetary union (EMU) 5 years on from the adoption of the euro as the single European currency. Praising the euro's positive impact on macroeconomic stability and economic integration, the report does little to hide dissatisfaction with the slow pace of economic reforms in the member states."

    Click for full Report.

Comments on the Growth and Stability Pact in the Eurozone

    Is it necessary? Shoult it be enforced?

   (From the Economist. 7/20/04)

 

"COMMENT:Indo-Pak peace process and the principal party by Hamid Bashani"

   This column is primarily about India-Pakistan relations, but it mentions, in passing, the proposal for a monetary union of the two countries, If India and Pakistan are serious about the 2015 agenda of common currency, soft borders and free flow of goods and services an independent Kashmir may not be the most acceptable solution.

( 19 July 2004The Daily Times, online news and commentary for Pakistan)

"Tukur Canvasses Single Currency for Africa"

     "President of the Africa Business Round Table (ABR), Alhaji Bamanga Tukur yesterday opened private sector's campaign for a single currency for Africa saying, the continent's economy would do better under a single currency.

      Tukur, however, said the first step towards achieving the dream of Africa's business leaders in that direction was to begin with the West African Monetary Zone(WAMZ) as proposed by the Economic Community of West African States.

      Under the proposal already ratified by the of Heads of States and Governments, the West African common currency - ECO - would come into operation throughout the sub-region on July 1, 2005."
(This Day online, news from Nigeria, From Cletus Akwaya in Abuja)

Annual Report of the Eastern Caribbean Central Bank and Monetary Union  by Sir K. Dwight Venner, 21 June 2004

     This report gives background information about the monetary union and shows how a monetary union is managed.  It manages the stable, E.C. dollar without a Growth and Stability Pact among the participating countries, thus showing that the route to the euro is not the only route to the Single Global Currency.

"With Euro as a model, group pushes global currency"

      This article is about the First Annual Single Global Currency Conference on Friday, July 9.   The article began, Sixty years after the greatest financial minds of the times came to Bretton Woods to establish a monetary system in the aftermath of World War II, there was another meeting in the mountains this weekend to discuss modernizing the way the world exchanges its money."

(New Hampshire Sunday News, 040711, by Lorna Colquhoun)

" Global currency supporters to meet"
     BRETTON WOODS, N.H. (AP) -- Sixty years after the Bretton Woods International Monetary Conference, supporters of establishing a single global currency are gathering Friday at New Hampshire's Mount Washington Hotel.

      Back in 1944, delegates from 44 nations met at the hotel to establish the World Bank and International Monetary Fund.

     Now, the hotel will be the host of the Single Global Currency Association's first convention. Led by Morrison Bonpasse of Newcastle, Maine, the group says switching to one currency around the world would save hundreds of billions of dollar each year.

    Bonpasse says the change would eliminate currency trading and currency-related investment risks. (WMTW-TV, Portland, Maine 040709)

 

"Naira to remain after introduction of ECOWAS single currency"

     CHIEF Mao Ohabunwa,  the treasurer of the West African Parliament, has given assurance of the continued use of the naira even after next July's introduction of the common West African currency, the Eco.  (Vanguard Media, 040711)

"Indiana Jones and the China crusade" by Nils Pratley

  This article is about Jim Rogers who was the co-founder, with George Soros, of the Quantum Fund.  The article begins, " The American dollar is a flawed currency and will collapse in value before the end of the decade, taking with it the prosperity of the American nation....

      His bearishness on the US dollar is predicated on economic fundamentals, notably the balance of payments. Alan Greenspan, the chairman of the Federal Reserve and Rogers' bogeyman-in-chief, has been printing money on an unprecedented scale and President George Bush has been spending it just as rapidly.

'The US owes the world $8 trillion,' he argues. 'We are the world's largest debtor nation by a factor of many times and our foreign debts are increasing by $1 trillion every 21 months. That's terrifying.

People need to understand about this major change in the world and about the demise of the US dollar. The US dollar is going the way that sterling went as it lost its place as the world's reserve currency. I suspect there will be exchange controls in the US in the foreseeable future. It will be a complicated and difficult currency.' "

(The Guardian, 040703 by Nils Pratley)
[These fears would be assuaged if the world adopted a single global currency, which is why such articles are posted here.  There is considerable risk in the current system of multiple currencies.]

British Economist recommends against monetary union of Australia and New Zealand.

   The article, "Economist Examines New Zealand Economy", stated, "Patrick Minford, a founding member of the so-called 'Seven Wise Men' - a group of economic advisers to Britain's Chancellor of the Exchequer in the 1990s - said the benefits of a common currency would be negligible for New Zealand and the costs potentially very high.

      'You don't want to do this,' he said."

(Forbes Magazine, 040701, from the Associated Press)

 

Single Global Currency Conference

      The Manchester Union Leader previewed the conference in a Monday, June 28 article by Bill Regan, the Business Editor. 

"Parliamentarians hold workshop on ECO"

     Ghanians are working toward the planned July 1, 2005 implementation of the second West African Monetary Zone.

(GhanaHomePage at Ghanaweb.com, 040628)

Standard and Poors comments on ABC Hotline - Inside Business on Currency Risk in Eurozone

      "DAVID BLITZER: I think it will change. In the European markets, continental Europe, where the euro currency has eliminated currency risk from country to country, it has very much become a regional point of view and sectors have become far more important over the last few years."

     David Blitzer, the head of Standard & Poor's index committee, spoke with Andy Kohler of ABC  (040627)     

"Estonia, Lithuania, Slovenia join pre-euro system"

     These three of the 10 new EU members have joined the ERMII (Exchange Rate Mechanism II) process, which commits them to keep their currencies within a 15% up or down bandwith from the agreed upon values at a recent meeting. 

     "Along with Cyprus, Estonia, Lithuania and Slovenia are hoping to join the eurozone in 2007.

      At the meeting, their finance ministers promised to pursue 'sound fiscal policies' to keep their budgets in order so that the currencies do not come under strain on the foreign exchange markets, an EU statement said."  (Servihoo.com, Brussels (AFP) 040627)

"Give your adviser a foreign investing test"  by Bill Carrigan, Toronto Star

     There are many, many descriptions of the hazards of currency fluctuation, but this article says it better than most.   After describing a financial adviser's possible approach, the article continues, "So far there is no reason to fire the adviser, unless he or she omits telling you about the currency risks associated with foreign investing. Most industry professionals know that currency fluctuations are the major factor in dictating your foreign returns....

         When you invest in foreign stock markets you are basically placing a bet on their currency."  (Toronto Star, 040627)

 

"Minister pans PRC currency plan" - to leverage a monetary union of sorts. 

     A plan was floated whereby the Peoples Republic of China would require that its substantial trade with Taiwan be conducted not in dollars but in the PRC currency, the Renimbi.   Such a plan would ostensibly give the PRC some control over Taiwan's currency.  [included her to show the growing understanding of the power of types of monetary union.] (TaiwanNews.com 040626)

Four Commonwealth of Independent States: Belarus, Kazakstan, Russia and Ukraine consider common currency.

      "MINSK, June 24 (Itar-Tass) - Belarus, Kazakstan, Russia, and Ukraine are pondering the possibility of a single currency that will be legal tender on the territory of the Common Economic Area they are creating, a senior official at the Belarussian National Bank told a news conference Thursday.

In most likelihood, there will be some kind of a new currency of the four nations, not the Russian ruble, said Nikolai Luzgin, deputy president of the bank....

        Commissioning of the new single currency by the four countries will be the next step after the introduction of the Russian ruble in Belarus.

       “This, however, is a somewhat remote prospect, and it would be too early now to make any forecasts,” Luzgin said." 

Former Prime Minister of India, Atal Behari Vajpayee, supports Southern Asian economic unity and a common currency.

    In a commentary, "Economics Beats Politics", it was noted that the Kashmir dispute has, so far, blocked reasonable trade and economic relations between India and Pakistan, and that the former prime minister had predicted a future Sough Asian common market and a common currency.  (Navind Times, 23 June 04)

Russia seeks closer economic ties with Eurasian neighbors including the use of the ruble as a common currency.

    In the article "WITH EYE ON US, RUSSIA BOLSTERS CENTRAL ASIA PRESENCE", in Eurasia.net, funded by the Open Society Institute, Sergei Blagov notes that the Russian neighbors to the south are not agreed about the common currency, but it IS perceived as a major part of closer economic cooperation.  (Eurasianet.org, by Sergei Blagov, 22 June 04)

"Does a common currency lead to (more) price equalization? The role of psychological pricing points "

     This article in "Economics letters", by Professors Richard Friberg and Thomas Matha, considers the effect of monetary union on prices.  (Economics Letters, Volume 84, Issue 2, August 2004, pages 281-287)

United States "Current Account Deficit Grew to a Record in the First Quarter"

    "The current account deficit widened to a record $144.9 billion in the first quarter as companies imported more to meet the demands of a stronger economy, the Commerce Department said in Washington yesterday."

    'Over time there may be a lack of confidence on the part of foreigners that the U.S. will be able to pay back these ever-widening deficits,' said John Shin, an economist at Lehman Brothers in New York. Until then, 'the U.S. is still widely perceived as the place to invest, and there isn't much competition from the rest of the world.'

Economists had forecast   (New York Times, from Bloomberg News, 040619)  [With a Single Global Currency, there will be zero current account deficits, as it's essentially a measurement of the imbalance of currency accounts.]

"Do Exchange Rates Matter" by the Conference Board, New York.

     In a survey of 400 CEO's and CFO's, it was found that the existence of exchange rate risk was a factor, but not the most important factor, in making foreign investment decisions. 

     [by SGCA.  However, perhaps future surveys can ask if these executives would prefer a world where there was zero exchange rate risk?]

(press release, 040617, the Conference Board)

"The Role of Mass Media in Promoting the WAMZ Programme for a Better Sensitisation of the Population"

   This is an article about how to persuade the people in the planned West African Monetary Zone that the planned common currency is to be trusted.  (by Seyddou Sylla, The Independent (Banjul) 040621)

Proposed new Constitution for Europe modifies Growth & Stability Pact's enforcement provisions.

       "The ministers reached an agreement on the Stability and Growth Pact, the accord that guarantees the stability of Europe's common currency, the euro. Currently, the European Commission has the direct power to take legal action against member states who violate the 3 percent deficit spending cap set in the pact. In the future, the Commission can recommend that action be taken, but such action requires the approval of a qualified majority of EU countries representing three-fifths of the EU's population in the Council of Ministers."  (Deutsche-welle, 040621)

[This proposal reinforces the view that the value of the euro is increasingly separated from the fiscal health of individual governments of the Eurozone.  Indeed that is one of the virtues of any monetary union.  Ideally the health of any member government should be no more important to the value of a common currency than the fiscal health of a similarly sized corporation within the monetary union area.]

"Currency Substitution and money demand in Euroland"  by Miguel Lebre de Freitas.

     Assistant Professor de Freitas, at the Universidade de Aveiro, Portugal, concludes that the goal of a single global currency is the hidden message of this article about currency substitution.   Although a supporter of the single global currency he doubts the political will to accomplish such a step.

Is the Euro a cause of European integration or an effect?

   As with many "cause and effect" considerations, it's both.  See the Asashi Shimbun editorial, "The EU constitution" which stated within its comments on the proposed new EU Constitution,  "The people's lives in the EU are growing steadily more interlocked in various fields due to its introductioin of the euro as its common currency."

(Asashi Shimbun, affiliated with the International Herald Tribune, 040620)

Goal of a larger Caribbean monetary Union

      "Governor of the Central Bank of Barbados, Dr. Marion Williams, says while a common Caribbean currency is one of the ultimate goals of the Caribbean Single Market and Economy, the economic union can be implemented without it."  (Barbados Advocate, 17 June 2004)

"The Islamic gold dinar"

     This article by Raidan Al-Saqqaf supports the use of a Malaysian-based Islamic dinar, backed up by gold deposited in a central bank.  Such a currency, the article noted, might assist trade among Islamic countries.  (Yemen Times, 15 June 2004)

Manila Times Column about Single Asian Currency

    Edgardo Espiritu wrote "A Single Asian Currency" and opened with, "One can imagine being able to buy household items in Binondo, or the latest electronic gadgets in Tokyo, or a dinner in Hong Kong, and so on, using the same “Asian Dollar” as the means of payment. Well, this is hardly unimaginable, now that the Europeans are doing it everyday with the Euro."

    Espiritu reasoned that it would take several decades for the Asian countries to prepare for a Single Asian Currency, but the Single Global Currency Association wrote an email to the Manila Times to make the point that not all monetary unions need be created alike and that other monetary unions need not be as rigorous as the Europeans.  (Manila Times, 16 June 2004)

Larry Elliott in the Guardian summarizes the roles of monetary and fiscal policy in a monetary union.

    In analyzing the issue of slow economic growth within the eurozone, Elliott writes: 

    "The second point is that even if monetary policy is effective in a common currency area there needs to be a greater role for fiscal policy in smoothing out differences in performance between parts of the zone that are booming and those that are struggling. If monetary policy is not as effective as it should be, there is an even stronger case for fiscal policy playing a more active role."

(The Guardian, 14 June 2004)

U.N. Secretary General Kofi Annan laments the problems caused by the limitations of the multi-currency monetary system in talk in Brazil.

    "Debt crises have revealed serious weaknesses in the international financial architecture," Annan said. "Too many developing countries remain dependent on the export of primary commodities for all or most of their foreign currency earnings, leaving them vulnerable to price declines and volatility."

( BEIJING, June 14 (Xinhuanet))

Stable vs. Floating Exchange Rate on the 60th Anniversaryt of the Bretton Woods System

     Speaking to an anniversary conference sponsored by the Bank of Spain, Ruogu Li of the People's Bank of China spoke of the original goal of the IMF which was that a "stable exchange rate would benefit the world as a whole".  Inspired by the sucess of the euro, Li noted that "Asian monetary cooperation has started."  Most importantly, he said that "a global currency arrangement might be a solution."  (14 June 2004)

From the BBC, an  interview with Nick Ogden, founder of WorldPay, where he predicts U.K. to join Eurozone.

       "However, I do suspect it is inevitable the UK will become a fully integral part of the eurozone as common currency pricing makes it easier to understand and to judge competitive quotations."

(BBC, Sunday 13 June 2004)

"West African Monetary Institute concerned about members' inability to achieve common currency "

       West African Monetary Institute (WAMI) Director-General Michael Ojo has expressed concern over member countries' inability to meet their financial obligations to the realization of a common currency by July 1, 2005.

        The criteria are budgetary discipline, reduced inflationary financing, price stability and healthy reserves position.

         He said a minimum of 75 percent of the Stabilization and Cooperation Fund (SCF) estimated at 50 million dollars was required for the eco's take-off, but less than 50 percent of the fund had been contributed by four of the five member countries.

        The director-general also expressed concern over the inability of member countries to meet their financial obligation to the start of operation of the West African Central Bank (WACB) on the same day with the eco.

        It is envisaged that the successful launching of the second monetary zone would facilitate the merger with the CFA zone to usher in the Economic Community of West African States (ECOWAS) single currency by 2008.

        The CFA zone, also known as the first monetary zone, is made up of French-speaking member countries of the ECOWAS, a 15-member grouping established in 1975 to promote regional integration in west Africa.

"An Asian Euro" REVIEW and OUTLOOK, WSJ

   This editorial begins, "One reason for the strength of the current global expansion is renewed growth in Asia. With China helping to pull Japan out of its 10-year doldrums, the region is getting its groove back. So it's worth paying attention when the region's economic leaders start exploring a common Asian currency." (Wall Street Journal, 8 June 2004, Editorial)

Presidents Putin of Russia and Lukashenko of Belarus Discuss Common Currency

     "Vladimir Putin and Alexander Lukashenko discussed the introduction of a common currency for the Russia-Belarus Union and relations in the gas sphere in Sochi (a resort on the Black Sea) on September 15, 2003. 

      Vladimir Putin said that the ruble introduction in Belarus entails no special guarantees because 'it has nothing to do with the sovereignty of Belarus'.  

      Mr. Putin gave the euro zone as an example. 'As you know, in the euro zone that common currency operates without diminishing the sovereignty of France, Germany or other countries. On the contrary, it has become stronger and more solid. This is why their economies have only gained from the introduction of a common currency', the Russian president said.

     'It can be said that there are special conditions there and something is balancing something else. Recent history can provide more examples, such as Benelux. As we know, Luxembourg used the Belgian currency which has not harmed its sovereignty. It is an economically stable state, small but respected in Europe and the world', Mr. Putin said.  (Pravda, 5 June 04)

"The Case for Monetary Union"  for Asia:  REVIEW and OUTLOOK from the Wall Street Journal

     Building upon Mr. Chino's article below, the Journal editorialized, 

"The solution would clearly seem to be a single Asian currency. Even seen from the outside, monetary union would be ideal. A common Asian currency would join the dollar and the euro in anchoring the world's financial system, even if the three were not interlocked. Minnow currencies would dart here and there beneath the Big Three, but their movements would pose no danger to global monetary stability." (Wall Street Journal 1 June 04)

"Consider a Single Asian Currency" by Tadao Chino

    The head of the Asian Development Bank writes about how a single Asian currency will foster stability and development, and concludes, "Achieving monetary union would require greatly improved policy coordination, stronger regional institutions, and political consensus across countries. It will also be important to ensure that region-level efforts at monetary and financial integration complement, and do not compete with, global and national initiatives.

Europe's experience shows that creating a regional currency is a massive and slow job. However, East Asia has the advantage of learning from Europe and shortening the process of monetary integration. East Asia's economic dynamism will further help accelerate the process." (Wall Street Journal, 1 June 04)

"West Africa move to common currency"

ABUJA, June 1 (Xinhuanet) -- Five west African states have agreed to take urgent and decisive actions to introduce a common currencyby next July 1, an official statement released in the Nigerian capital said Tuesday.

The currency with the name of "eco" was billed to have been introduced to the states of Nigeria, Ghana, Guinea, Sierra Leone and Gambia by Jan. 1, 2003, but the date was shifted due to the countries' inability to meet four convergence criteria.

The criteria are budgetary discipline, reduced inflationary financing, price stability and healthy reserves position.

A statement issued by the Accra-based West African Monetary Institute in Abuja said Tuesday the five countries have decided toimprove compliance with the convergence criteria and ratification of all signed statutes promptly.

"They agreed to put in place the essential policy and institutional frameworks for the common central banks," said the statement.

The eco will be a prelude to the introduction of a single currency in the west African sub-region. However, like the birth of the euro, it has been dogged with problems.

"In 2003, all countries had inflation rates in double digits ranging from 11.3 percent in Sierra Leone to 23.8 percent in Nigeria," said the statement, attributing the situation to the surge of oil price, high monetary growth rates and supply constraints.

Last year, only Nigeria recorded fiscal deficit below the criterion of 4 percent of Gross Domestic Product while only Ghana satisfied the criterion on central financing of budget deficit.  [Also, see below, April 22, 2004 article about the 'eco'.]  (Xinhuanet, 6/1/04)

"CES [Common Economic Space] may have common currency in 3 years"

      Minsk. (Interfax-West) - Belarussian National Bank Chairman Pyotr Prokopovich thinks that in two or three years, the Common Economic Space may introduce a common legal tender.

"Everything will depend on the speed of integration of the two [Russia and Belarus] and the four [Belarus, Russia, Ukraine and Kazakhstan]," Prokopovich told reporters in Minsk on Wednesday.

"Today, the efforts of the four countries to form the Common Economic Space are very important," he said. If they provide for effective results in two or three years, conditions will appear for establishing a monetary union of four, not two countries, he said."

(via Interfax, 5/3/04)

 

"Nobel laureate warns of risks of RMB appreciation"and discusses 'Asian common currency'.

     Professor Mundell encouraged China to say "no" to the appreciation of the Chinese currency Renminbi (RMB) at a forum on the global economy and China. 

     Also, the article continued, "As for the 'Asian Dollar', the 'father of the euro' said it is difficult to tell the possibility and timetable of a unitary Asiancurrency, which has high requirements for regional economic integration, while for the euro zone, such objective is likely to be achieved in the next 10 to 15 years." (XINHUA online, 5/31/04)

"All-Ireland currency would benefit border region - SF"

     This article shows how interesting the efforts for currency unification can become, as advocates have emerged for making the euro the currency of Northern Ireland, the section of the island of Ireland which is part of the United Kingdom, which uses the Pound.  The larger, southern section of the Island, governed by the government of Ireland, uses the euro now. (from PoliticsNI.com 5/26/04, by Ian Parsley)

"UK 'has lost investment by staying out of eurozone' "

    From the Financial Times comes the analysis that joining the euro would have been good for investment in the U.K.  The article begins, "Investment into Britain will more than double next year but staying outside the eurozone has lost the nation market share and will cost it one-third of potential annual inflows, according to a report from the Economist Intelligence Unit."  (Financial Times, 5/18/04)

"An idea whose time is definitely coming"

      The article by Anthony Rowley begins, "Now that Asean+3 is committed to exploring formal policy dialogues on monetary cooperation, some experts believe the road will lead on inevitably to full monetary union one day. The spectre or promise of a common currency will not go away.

      'There are those who argue that a single currency is not needed or is even harmful for East Asia,' noted Japan's former vice-finance minister for international affairs, Haruhiko Kuroda (now a special adviser to Prime Minister Junichiro Koizumi), in Jeju.

       'I would argue that East Asian economies are well integrated, so that even small intra-regional exchange rate misalignments can disturb trade and investment flows, and create potential friction among regional economies.' This, he added, 'indicates the need for intra-regional exchange rate stabilisation and ultimately a single currency in East Asia'. " (The Business Times, Singapore 5/20/04)

 

"EC states discuss plans this week for common currency"

  In a move to expand the size of the existing 8-country Eastern Caribbean Monetary Union, "leaders from the Organisation of Eastern Caribbean States meet this week to discuss plans for a common currency."  (Jamaica Times, 5/19/04)


Gulf Cooperation Council Ministers reaffirm 2010 Common Currency Goal

    At their upcoming trade negotiations with the European Union, the GCC Foreign Ministers are expected to stick with the goals of a common market by 2007 and a common currency by 2010.  In 2003, they established a customs union.  (eubusiness, 10 May 2004)

"Tokyo holds out hope for regional currency"

      The article begins, " WITH economic integration in East Asia speeding up through a series of free trade and investment agreements, the question of a common currency for the region could arise in the future, Japan's Finance Minister Sadakazu Tanigaki said yesterday."  (Anthony Rowley in The Business Times, Singapore, 17 May 2004)

"Ministers Pledge Monetary Cooperation in Northeast Asia"

    The article begins, "Top economic policymakers from South Korea, Japan and China agreed on Sunday to enhance monetary cooperation as a preliminary step to introduce a single currency in Asia, the Ministry of Finance and Economy (MOFE) said on Sunday."

(Korea Times, 5/16/04, by Kim Jae-kyoung)

"N.Z. Business Supports Common Dollar With Australia, Paper Says " 

     The New Zealand Sunday Star-Times reported that "about three-quarters of the 200 companies that responded to a poll last week supported a common currency, corporate tax rate and business regulatory framework with Australia..."  (reported by Bloomberg, 5/17/04)

"Is Asian Monetary Union Pipe Dream"

    Christopher Lingle notes the increased interest in an Asian common currency, as inspired by the euro and being urged by Nobel Laureate Robert Mundell.  Lingle notes the benefits of a single currency but then argues against it.  (Korea Times, 5 May 2004)

"Commentary: Is a single East Asian currency just a pipe dream?"

    Andy Mukherjee, of Bloomberg News, concludes that "The Asian dollar may not be here soon. But to say it will never arrive is to underestimate the power of progress. (International Herald Tribune 11 May 2004)

New Zealand and Australia:  "Trans-Tasman forum to discuss stronger ties" including a common curency

(New Zealand Herald, 11 May 2004)  and another article

"Common currency push to win Kiwis" in "The Autralian".

 

"The world needs a single global currency"

     This Op-Ed, "Guest Commentary" in the 1 May 2004 Manchester (New Hampshire) Union Leader by morrison bonpasse, presents the case for a Single Global Currency.  It noted the importance of such a stable currency to the people of New Hampshire, and all states, and mentions the upcoming Single Global Currency Conference in Bretton Woods, New Hampshire on July 9, 2004.

"When will 'Asian Dollar' come into being?"

     This article from the Xinhua News Agency covered the Boao Forum for Asia 2004 Conference.   Several participants discussed the need for an Asian regional currency, informally dubbed the "Asian Dollar".  The call by Robert Mundell, "father of the Euro", for such a common currency was cited.  (Xinhua News Agency, 26 April 2004)

George Soros has advice for "Accession" countries joining euro.

"Prospects of euro entry distant as ever"

      George Soros recommends that Poland and Hungary (and other Accession countries) join the "Exchange Rate Mechanism" (ERM2) as a transitional step on the way to joining the euro.   Such a mechanism would reduce harmful speculation.   [The remainder of the article had various viewpoints on how long it will take for the Accession countries to join the eurozone.] (Warsaw Business Journal, by Aleksander Nowacki, 4/26/04)

23 April 2004.  Testimony before Australian Legislative committee supports Single Global Currency. 

    Dr Geoff Pain, on behalf of Scientists for Labor, testified to the Joint Standing Committee on Treaties at its meeting in Perth:

  "... But something this Committee might like to consider in terms of improving Australia's trade position is my proposal for a single global currency.

    Many of Australia's problems come from the absurd obsession with the “value” of the dollar against various currencies. A single global currency would end unproductive gambling through hedging and futures markets.

    The focus should shift to real wealth generation...."

 

New West African Monetary Union:  "Public educated on the second single currency"

      Five West African countries are planning a new West African Monetary zone with a common currency to be called the "Eco".  The five countries are:  Ghana, the Gambia, Sierra Leone, Guinea and Nigeria, and the Central Bank, to begin operations on July 1, 2005, would be in Accra, Ghana. 

     This monetary union would be the second in the area as it's preceded by the CFA zone of those French-speaking ECOWAS countries using the West African franc. 

     Proponents of the new "Eco" anticipate that an eventual merger of the two monetary unions would be desirable.  (Accra Daily Mail , 4/22/04)

"A remedy for financial turbulence?"

    Beginning a series of articles about advancing global welfare, this article focused on the "severity and frequency of financial crises, especially the combined curency and banking collapses of the past decade."

     The article relies primarily upon the paper written by Barry Eichengreen of the University of California, Berkeley, who estimates that these crises cost the world approximately $107 billion per year.

     Identifying the primary problem as unstable local currencies, "possible solutions follow naturally:  either create a common world currency, used by rich and poor alike, or invent a liquid, international market for bonds denominated in the pesos, bahts and rupiahs that emerging markets are obliged to used.  The first solution even if it were desirable, is politically impossible; the second is merely very difficult."  (the Economist, April 17, 2004, p. 76) [Of course, the Single Global Currency Association believes that the single global currency is not "politically impossible"; it just requires vision, thinking, planning and implementation.  With the implementation and expansion of the euro, it takes even less vision and thinking.]

"Russia/Ukraine: Common Ground Reached On Border Agreements"

    Among other agreements, the two countries are exploring a common currency.  (Radio Free Europe, by Askold Krushelnycky, 4/21/04)

"The unstoppable, surging yen"

  Despite the Bank of Japan's spending of billions of dollars in foreign exchange reserves to depress the value of the yen, it still rose to 105 to the dollar and is moving toward the magical 100 mark.

In March alone, $45.2 billion was spent in order hold down the value of the yen.  [Yet another example of the wastefulness of the current, multiple-currency system.] (The Economist, 1 April 2004)

23 March 2004.  United Kingdom still committed to joining Euro, but not yet.

    A New York Times article stated that Tony Blair was committed to joining the euro, but only under the "right economic conditions" [quote from the aritlce, and not necessarily his words].  The article continued, "Mr. Blair suggested that Britain might be more willing to adopt the euro if the existing euo zone members overhauled their economies."  (New York Times, 23 March 2004, page W1)

 

27 January 2004 - Weak Dollar Helps U.S. Firms, for Now

The subtitle of this article is "Long Term Effects Worry Economists", as well they should.  While the decline of the dollar has been orderly, the scary danger is that "...a rout on the currency markets could be disastrous to the international economy's psyche."

The article summarizes the good effects on exporters from the U.S. and negative effects on importers, but does not discuss the effect on asset values - i.e. the greater ability of Europeans, for example to purchase assets in the U.S.  (Washington Post, 1/27/04, by Jonathan Weisman)

27 January 2004 - Rising Rand Takes A Toll on Gold Earnings

As has been seen with other aspects of the economy, the mining of gold in South Africa has been affected by the fluctuating values of the rand and the dollar.  Manufacturers and others have had to work hard to compensate for the exchange rate changes.  It's all such obsolete effort, which would be eliminated by the implementation of a single global currency. 

  Here are representative quotes, "Both quarters were battered by the two-year advance in the rand..... Miners or precious metals, who sell their product in dollars but count costs in rand, have been hit by the strength of the currency.... But the rand's volatility - it was down as much as 10 percent earlier this month - makes planning difficult. ..... But the rand outperformed other currencies as well [as the dollar], rising against the euro and sterling as well....South Africa's gold companies are looking to reduce their exposure to the countr's volatile currency by expanding abroad."   (New York Times, 1/27/04, World Business, page W1, by Nicole Itano)

 

"Warren Buffett keeps out of the depreciating dollar"

    This online article from The Guardian, states that Warren Buffett, "the second wealthiest man in the world, continued to bet against the dollar last year, increasing his company's [Berkshire Hathaway] ownership of foreign currencies to $12bn.....

      Berkshire Hathaway reluctantly entered the foreign currency for the first time in 2002 and Mr Buffett said it had enlarged its position last year, increasing its holdings in five unnamed currencies. He put the blame on the ballooning US trade deficit. He said that in late 2002 foreign investors began 'choking' on the flood of dollars.

'As an American, I hope there is a benign ending to this problem,' he said, though he warned that the situation was unlikely to improve. 'Whether foreign investors like it or not, they will continue to be flooded with dollars. The consequences of this are anybody's guess. They could, however, be troublesome - and reach, in fact, well beyond currency markets.' "  (The Guardian Online, by David Teather, 040308)

"Lawmaker Seeks Support for ECOWAS Currency"

     A regional Nigerian legislator, Hon. Irem Ibom, noted that even though there would be an introductory "shock", and the value of the existing Nigerian currency, the naira would decline; the planned June 2005 implementation of the ECOWAS should proceed.

     He compared Nigeria's role with the ECOWAS to the role played by Germany with its support of the euro.   (ThisDayOnline.com 040307)

"Economic Focus - Wirtschaftsblunder" - the reasons for the slow growth of the German economy

While this website is not usually about the status of one economy, this Economist article is interesting in that it does NOT point to the high value of the euro as a reason for the slow growth of the German economy.  Rather, it's the highly regulated capital and labor markets. (Economist, 2/21/04)

Currency Hedging "Holding back the flood"

This article contends that the large amount of currency hedging by corporations is slowing the effects of the fundamentals which are driving the value of the dollar down.  (the Economist, 2/19/04)

"The latest G7 meeting has changed little"

The Economist reports on the inability of the G-7 countries to resolve the problems of the dollar and the yuan and their effects on the euro.  [by SCGA:  All told, we are in a risky situation.  Why not announce that the world is moving toward a Single Global Currency and begin planning for it?]  (The Economist, 2/12/04)

 

Cheapening the Dollar - How Main Street and Wall St. Will Feel As the Greenback Is Allowed to Plunge. 

One more article about the dangers of Washington's intentional lowering of the value of the dollar.  [Note by SGCA:  The exchange rate system is dangerous. Will it take a currency crisis to convince the world to go to a Single Global Currency?] (by Edmund Andrews, New York Times, page A5, 2/9/04)

 

G-7 Statement Signals Worry About Dollar

    The article begins, "Hoping to assuage widespread international alarm about the sinking value of the American dollar...."

    "Global currency markets are unlikely to be impressed, because American officials provided no hint that they are about to prevent a further gradual decline in the dollar...."

     "The policies of Asian governments, particularly China and Japan, loomed over all discussions this weekend. Both countries have made huge purchases of American Treasury securities and dollars to try to restrain their currencies from rising too much against the dollar. The Bank of Japan bought about $175 billion in American securities in 2003, then $67 billion more in January 2004 alone"

(New York Times, Sunday, 2/8/04, by Edmund Andrews)

Getting off exchange-rate roller coaster

Economist Charles Lawton explains the down-to-earth realities of the impact of the current exchange rate system on the State of Maine in the United States.  He notes that the Single Global Currency Association "has an answer - establish a single global currency standard," and concludes, "The collective self-interest of all the world's hotel owners, lumberyards and other internationally involved businesses may one day outweigh such parochial concepts as monetary sovereignty." (Portland Press Herald, Sunday 2/1/04)

"Mondo Euro?", Tech Central Station, by Jeremy Slater

Commenting on a recent speech by Robert Mundell where he supported the single global currency, the article noted some of the difficulties with the high value of the euro.  [The SGCA's view of the problems with the euro, is that the euro is fine and the real problems wih the euro are problems with the dollar and other currencies, such as the yuan.]  The article concludes "Who knows whether we will be using mondos or globos in 50 years' time?"

(1/20/04)

15 January 2004 - Struggling With the Falling Dollar

This article focuses on those who import European goods and parts for manufacturing or resale, and who thus must cope with the large increase in the value of the euro relative to the dollar.  On the other hand, exporters are assisted by the change in values.  [Once again, it's a story of business people coping with a system which is wasteful of time and money.]  (New York Times, by Mark Stein, 1/15/04)

January 2004.   "The Euro and Prices, Two Years On"  by the Deutsche Bundesbank

Excerpts...

   "The official statistics did, in fact show that prices had gone up in connection with the introduction of euro cash but not nearly to the extent perceived by the general public. Many of the price increases were not connectd with the introduction of the euro banknotes and coinsw but were due instead to other factors, such as very cold winter weather as well as higher taxes on energy,tobacco products and insurance....

   In the two years following the changeover to the euro, it is noticeable that price structures have, by and large, returned to normal in many sectors.

2003

27 December 2003 - Boston Globe

In an unlikely spot at the bottom of the first page of the "Living/Arts" section, the Globe had a section "in & out - week of December 21 - 27" and a whimsical paragraph:

                    "THE DOLLAR - It keeps falling against

                    just about every other currency out

                    there.  Maybe it's time to think about

                    converting to the Euro."

Maybe the writer is onto more than s/he realized.

 

9 October 2003 - Currency Rumors in China Shake Hong Kong

 This is an extraordinary New York Times article about how small changes in value of one currency, the Hong Kong dollar, can cause financial havoc. Traders in currencies, including speculators, had apparently assumed that the Hong Kong dollar would deflate due to a slumping Hong Kong economy. However, due to the downward trend for the U.S. dollar, to which the Hong Kong Monetary Authority has pegged the Hong Kong dollar (at 7.8 to the $ U.S.), the traders and speculators lost an estimated $250 million over the past two weeks as the Hong Kong dollar has increased in value above the 7.8 mark.

 

Some people have thought that eventually the Hong Kong dollar (now at 7.8 to the USD) might be merged with the Chinese yuan (now at 8.28 to the USD), but the official message is that the two currencies function in different economies, even though Hong Kong is now part of China. [Note by SGCA: This article shows the enormous, obsolete and wasted, effort that must be spent by legitimate companies to maintain the vaue of their currency holdings, often resulting in losses. Also, it shows the effect of speculators on currency values. We say "obsolete" and "wasted" because the use of a single global currency would eliminate these reported currency transactions. ] (New York Times, World Business, page W1) 

 

 

7 October 2003 - Singapore and Thailand Urge Region to Integrate

 Singapore and Thailand urged the other 8 countries of ASEAN to work with them to form a Common Market by the year 2020. The other countries are: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines and Vietnam.

 

The Prime Minsiter of Thailand, Thaksin Shinawatra urged the group to follow the example of Europe and move together toward economic unity. He said that Thailand and Singapore would strart the union alone if the other countries did not participate.

 (New York Times, World Business)

 

 

 

6 October 2003 - Nintendo Co. "Loss is Expected for First Half On Foreign-Exchange Setback"

 Nintendo estimated a loss of 3 billion yen ($27 million, computed at 111.11 yen to the dollar), which was its first loss since its shares were first listed in 1962. The primary reason for the loss was its booking of a 40 billion yen loss ($360 million,or 7.2%) due to foreign exchange changes. The problem was that Nintendo had approximately $5 billion in cash deposits in the U.S., and a drop in the value of the dollar caused the loss. (Wall Street Journal, page B3)

 

 

 

[Note by SGCA: Such financial results have nothing to do with the productive health of the company and they would not occur in a single world currency world. SGCA sent the letter below to the Wall Street Journal:

 

To the Editor, Wall Stret Journal:

 

The report showing a loss of 3 billion yen ($27 million) due to a 40 billion yen loss ($360 million) shows the uselessness of the current foreign exchange system. Reports of corporations should show their real value, as a product of their workers and technology. They should not be hostage to the whims of the exchange rate. In August, Nestle reported that its profits were hurt by the high value of the Swiss Franc. Nintendo and Nestle should both support the implementation of a single global currency, which would eliminate such artificial measurements.]

 

 

 6 October 2003 - "Japan Defends Its Methods for Supporting Yen"

 Finance Minister Sadakazu Tanigaki said "There are various methods that can be used in intervention."

 

Tuesday's intervention, by selling yen, was the first clear effort in several weeks, and the Finance Minister's announcement of the intervention was unusual. It accomplished the selling through its account at the Federal Reserve. The Finance Minister explained the intervention not as a means of keeping the yen low against the dollar, but as an effort to stabilize the yen in the foreign exchange market, "when speculative moves make the market disorderly, we must take firm action." [Note by SGCA: A single global currency would make such interventions unnecessary.] (Wall Street Journal)

 

 

 2 October 2003 - "China's Exchange Rate Regime and its Effects on the U.S. Economy", Testimony by John B. Taylor, Under Secretary of the Treasury for International Affairs

 

In this testimony before the Subcommittee on Domestic and International Monetary Policy, Trade and Technology, of the House Committee on Financial Services. Mr. Taylor described the overall international economy and the effects of China's efforts to keep the yuan at a low value relative to the dollar. China's foreign reserves have increased massively since 2001, from $153 billion to $360 billion, primarily through the purchase of U.S. Treasury bonds to keep the yuan low. This, of course, has helped the U.S. float its huge budget deficit. Mr. Taylor was encouraged by promises from China to move toward a floating exchange rate system. [Note by SGCA: Alan Greenspan has said that one of the two ways to eliminate the foreign exchange reserve problem is to implement a single global currency. See this website at What governments say about the single global currency.] (Press Release from the U.S. Dept. of Treasury.)

 

 

24 Sept 2003 - Strong Dollar, Weak Dollar: Anyone Have a Scorecard?

 This New York Times article sorts out the plusses and minuses of a "strong" or "weak" dollar, with the added message that moving fast in any direction is also hazardous. [Note by SGCA: Of course, all these very, very expensive and hazardous shifts would be unnecessary and unheard of when the single global currency is implemented.] (New York Times, by Edmund Andrews, page C1, Business Day)

 

 

 23 Sept 2003 - Stocks Sour on cheap dollar

 "Stock prices tumbled yesterday around the world as investors worried that a new round of curency moves aimed at weakening the dollar could spell mroe trouble for the U.S. ecnomy at home than it would stimulate demand for US goods abroad." [The people of the world want stable currencies and as that is not possible under the existing exchange rate system, the people of the world should be given a stable single global currency.]

 (Boston Globe, by Stephen J. Glain, Business, page D1)

 

 

 

23 Sept 2003 - Yen Surges on Statement by Ministers

 The New York Times reported that the yen rose to 33 month high, which was nearly a 45 increase from the previous few days. This was considered to be a direct result of the G-7 Communique which encouraged floating exchange rates and which discouraged the Japanese Central Bank from its previously massive currency interventions to keep the value of the yen low, relative to the dollar.

 

The article cited HSBC Securities for the view that "a 10 percent rise in the yen shaves about half a percentage point off Japan's economy over a two-year period." (NewYoirk Times, World Business, by Ken Belson, Page W1)

 

"World Needs a Single Global Currency"  by morrison bonpasse, President, Single Global Currency Assn.

     The Op-Ed begins, "Taking a cue from the successful implementation of the euro, the world should now proceed to the next level of currency consolidation: a single global currency, to be managed by an international central bank.

      Such a single global currency would eliminate worldwide currency trading costs and eliminate currency-related investment risks."  (Portland Press Herald, U.S., 9/23/03)

 

20 Sept 2003 - Statement of G7 Finance Ministers and Central Bank Governors at Dubai Conference.

Among other statements, the Finance Ministers stated: "We reaffirm that exchange rates should reflect economic fundamentals.  We continue to monitor exchange markets closely and cooperate as appropriate. In this context, we emphasize that more flexibility in  exchange rates is desirable for major countries or economic areas to promote smooth and widespread adjustments in the international financial system, based on market mechanisms."  (Statement from U.S. Treasury Press Release)

20 Sept 2003 - U.S. to Ask Group of 7 to Shift Its Policy on Exchange Rates by Bloomberg News

"Treasury Secretary John W. Snow said yesterday that he would ask the Group of 7 industrialized nations to change its policy for the first time in more than six years and back "flexible" currency exchange rates.

Mr. Snow will use six hours of talks on the global economy this weekend in Dubai to seek support for his campaign against governments that manipulate the value of their currencies to bolster growth, like China and Japan. The United States wants the idea that markets should determine exchange rates mentioned in the group's post-meeting statement.

"The world trading system works best under a regime of market-based exchange rates," Mr. Snow told reporters as he left Pakistan for the United Arab Emirates. "It would be useful if the communiqué expressed support for flexible exchange rates."

While Mr. Snow said he was not asking the ministers to "single out" specific nations for criticism, analysts said his sights were focused on China's eight-year-old currency peg to the dollar and Japan's recent record sales of yen..... " (In New York Times, 20 Sep 2003)

31 August 2003 - New Political Party Established in India with single global currency in platform.

The new party is called the Lovers' Green-Globalist God-free-Humanist Party of India and membership is open only to those who are married or are considering it.  It has a number of unorthodox goals, but the history of democracies have shown how the marginal issues of some parties have come to the fore in subsequent elections. Often thoe issues are then claimed by other parties. The article stated, "Some revolutionary aims of the party are working towards a world government, elimination of national armies, integration of national economies into a global economy with a single global currency 'Globo' on the model of 'Euro'."  (The Sunday Tribune, Chandigarh, India)

 

27 August 2003 - Japan spends Billions to Reduce Yen

Japan has intervened in the international currency markets by spending over $75 billion (9 trillion yen) to buy dollars which has the effect of depressing the value of the yen relative to the dollar.  In the previous three years, Japan spent 10 trillion yen for the same reasons and with the same effect. (New York Times, 27 August 2003, by Jonathan Feurbringer)

The article cites estimates that without the intervention the value of the yen would rise from it current 117.26 to the dollar about 12 percent to 105 to the dollar.  This suppression of the yen has the effect of increasing exports to the U.S. and decreasing imports from the U.S. (New York Times, World Business, 8/27/03, by Jonathan Feurbringer)

21 August 2003 - Swiss Franc Value Hurts Nestle Profits 

Nestle, the world's largest food company, headquartered in Zurich, announced that its profits for the first half of 2003 fell by half from a year-ago, hurt by a strong Swiss franc.  (New York Times, "World Business", "Strong Franc Helps Reduce Nestlé's Profit", page W1, 8/21/03).  Such a report will become obsolete after the implementation of the Single Global Currency, as there will be no gains or losses due to changes in currency exchange rates. 

"Stemming Job Losses", Washington Post, by David Broder

This article does not mention the Single Global Currency, but it should as it's about how manufacturing jobs have moved from the U.S. to China and other countries, partly because of the undervaluing of non-U.S. currencies.  The cost of labor and production will be lower than in the U.S. or in Europe for a long time worldwide living standards become more equal, but the fluctuation of currency values need not worsen the situation.

(Washington Post, Sunday, August 31, 2003; Page B07)

"World Money at the Palazzo Mundell", Wall Street Journal, by Robert Bartley
In his "Thinking Things Over" column, Robert Bartley describes this year's gathering of leaders of our financial world at Professor Robert Mundell's castle near Sienna, Italy.  The article cites the support of Paul Volcker for the single global currency as well as that of the host, a Nobel Economics Prize winner.   Bartley reported that Professor Mundell plans to raise the issue of a single global currency at the September meeting of the IMF in Dubai.) 6/30/2003

 

14 June 2003.  "A single world currency? " by John Roberts in Vanguard Online.

Excerpts:

"... There has recently been some suggestion of the need for a global currency, and the discussion that ensued seemed to show certain difficulties in coming to grips with the question...

   The lessons of the European Union, where after thirty years of groping for a closer union and a more equal sharing of wealth, the move to a common currency is still not assured, are instructive. Clearly the world as a whole is far less united and far less politically ready for a similar change. So it is likely that a world currency, with its concomitants of greater economic and financial equality, will be the last stage in the process of global unity, not one of the first.

 

"Bush's Dollar Gamble", Washington Post, by Robert Samuelson

Samuelson explains the great risks in permitting the dollar to drop in its value against other currencies, such as the euro.  One such risk is that foreign investors will reduce their purchases of U.S. stocks and U.S. Treasury notes.   (Washington Post, 21 May 2003)

"Britain, Europe & the Euro - 2003"

by A. Caversham

"...It is a step towards the inevitability of a single global currency. It is preferable to be prepared for the inevitable in good time rather than have it forced upon one at the last minute. Leading IT business consultant Robin Bloor predicts that 'ultimately, there is room only for a single world currency.... If there is any attempt to impose more than one, then the more stable currency will drive out the less stable. A national currency will come to be seen as a tax on international transactions and where tax can be avoided, it will.' " (web article, May, 2003, with pro and con arguments for the euro, including this paragraph)

 

2002

"SHOULD THE U.S. EXCHANGE THE DOLLAR FOR THE EURODOLLAR" by Adrian Taylor, Voter News Network

"......A Single Currency Increases Economic Efficiency

First, a single currency reduces the transaction costs of selling and buying goods because you do not have to convert money from one currency to another. Multinational corporations would see a dramatic reduction in the costs of managing operating revenues.

Second, a single currency increases the transparency of prices. For an example: Each state in the United States operates under a single currency, (the U.S. dollar). Therefore, whether you buy or sell goods in Alabama or New York, consumers can compare prices in the United States in a single currency.

Compare that with Europe, which until recently, if some consumer wanted to compare prices, he would have to compare prices in fourteen different currencies.

Third, a single currency would eliminate exchange rate risk. Foreign exchange risks and the costs of hedging these risks are a major concern of multinational corporations. Having a single currency can eliminate foreign exchange risk.

Fourth, moving to a single currency would also create the need for a Global Central Bank not controlled by any single government. The Global Central Bank would oversee the currency union. Such a central bank could easier focus on controlling prices and fighting inflation.

When a currency union exists, countries can no longer use devaluations as part of their economic policy to gain an advantage over other countries...." (From the ARCHIVES, August 2002 Volume 2 Issue 8)

28 June 2002.   Obituary for Pierre Werner, "The man who dreamed up the euro"  The Guardian, U.K. 

Excerpts:

  "... It was the Werner report, adopted by the leaders of the then six member states in 1971, that proposed a three-stage process towards economic and monetary union and a single currency, to be completed by 1980. Euro-sceptics who claim Britain was always misled about the nature and evolution of the common market should note that the plan was devised, and there for all to see, two years before Britain even joined...

   But the eventual development of the euro in the 1990s, culminating in last January's introduction of notes and coins in 12 of the now 15 member states, was largely foreshadowed by Werner. He even called the putative currency "the euror"...

    The Werner report, commissioned with the agreement of France and Germany in 1970 following a period of exchange rate turbulence and devaluations, proposed gradual, institutional reform leading to the irrevocable fixing of exchange rates and the adoption of a single currency within a decade, though it did not re-commend the establishment of a central bank. The plan was scuppered, first, by internal political disagreements, mainly in France, and then by the oil crisis, but the blueprint was in place when the single currency idea was revived in the late 1980s.

    Werner, who retired from politics in 1984 to chair the Luxembourg telecommunications company and latterly the Société Européenne des Satellites, was thrilled to see his brainchild come to fruition 42 years after he first proposed it. But, for him, the euro was not enough. He foresaw the creation of a single world currency, too, suggesting it might be called the "mondo"....

After the Euro, why not a ‘global’ currency?

by Satya Prakash Singh, Panjab University, Chandigarh, India.

   Written shortly after the last stage of the introduction of the euro, the article concludes, " Finally, the optimists who dream of a single economic order for the world should take what happened on January 1, 2002 as an indication for the mankind moving towards the realisation of that dream. Should the world, have a single world currency? That could be named ‘global'.  (The Tribune, Chandigarh, India, 020202)

A conversation with John Micklethwait and Adrian Wooldridge, authors of A FUTURE PERFECT: The Challenge and Hidden Promise of Globalization

"....Will we ever have a single global currency? Would it be a good idea to have one?

The idea of a single international currency was actually discussed prior to the post-World War II Bretton Woods conference. In theory, it would put an end to capital flights, competitive devaluation and inflation; above all it would make it more difficult for governments to intervene in business people's lives. But the problem lies with the practicality of this solution. It has taken Europe centuries to produce a single currency. And it is hard to see countries at different stages of development and different positions in the economic cycle converging on the same currency. It is much more likely that the world will develop into three regional currency blocks – a dollar zone, a yen zone and the Euro zone. " (The date of this interview was not given on the web site, but is presumed to be 2000 because of the reference to the U.S. presidential election and the 1999 Seattle WTO meeting.)

10 January 2002. China Peoples' Daily: "Nobel Prize Winner Proposes New Currency -- 'intor' "

    An international currency, which can be called "intor," should be created in order to keep the stability of the international financial system, a Nobel Prize winner economist said in Shanghai Saturday.
    The mainstream of the world economy is now dominated by the three largest currency areas, the dollar, euro and yen areas, which have become three "islands of stability" of the world's financial situation, said Robert Mundell, a Nobel Prize winner in economics in 1999.

  In his written speech delivered at the CEO Summit of the Asia- Pacific Economic Cooperation (APEC), Mundell noted that "it is a much better situation that existed in the 1970s when the dollar was the sole large currency area and it had succumbed to inflationary tendencies."

  "Nevertheless, it should not be thought that the present international monetary arrangements are close to optimal. The biggest threat to prosperity is the high degree of instability of the major exchange rates."

  Mundell, a professor at the Columbia University in the United States , stressed that the instability of the yen-dollar and dollar- euro rates pose "a major problem" for the dollar, euro and yen areas and "at least great a problem for the rest of the world."

  A G-3 monetary union, based on fixed rates between the dollar, euro and yen, could be used as a platform on which to build a much- needed world currency, Mundell said.

  "The model would be the EMU (European Monetary Unit) as it now exists, before national currencies have been replaced," he said.

  "Once that three-currency monetary union is brought into being, the Board of Governors of the International Monetary Fund ( IMF ) could establish an international currency -- call it the 'intor' -- equivalent to a unit of the three-currency union."

  "Initially it would probably be best to make the intor equivalent to the dollar because the dollar is the most widely- used international unit of account," Mundell added.

2001

30 November 2001. Speech by Alan Greenspan: "The euro as an international currency"  to the Euro 50 Group Roundtable, Washington, D.C.

Excerpts....

   ...An international currency emerges because it is a solution to an economic problem....

   ...When the volume of transactions in a given currency is large, however, the waiting time between buy and sell orders for the currency will typically be shorter, and smaller stocks of the currency can be held. Thus, there are efficiency gains to channeling international transactions through a single currency, ...

  ... Because the attractiveness of any vehicle currency grows as its liquidity increases, an international currency has a tendency to become a natural monopoly....

   This point brings us to the question: How does a currency become an international currency? The question is particularly intriguing because, in the reign of fiat currencies, its answer is unlike the explanation of how a currency becomes dominant within a country...

   ...In the international arena, however, no overarching sovereign exists to decree what is money. Instead, a myriad of private agents must somehow reach agreement on which currency to use as an international currency.

In the modern world of fiat currencies, a number of factors can enhance the attractiveness of a currency to private agents, making it easier for them to settle on an international currency. First and foremost, an international currency must be perceived as sound. To be acceptable, market participants must be willing to hold it as a store of value....

   ...Having endeavored to forecast exchange rates for more than half a century, I have understandably developed significant humility about my ability in this area, a sentiment that I suspect many in this room share.

 

"A Dialogue on Global Currency" In an interview in a J.P. Morgan/Chase magazine, the bank's chief economist, John Lipsky, states his own preference for a single global currency.   The magazine also interviewed Robert Mundell, who was then advocating the interim step of linking the world's major currencies.  Lipsky stated, "If well-managed a single global currency could promote credible long-term price stability, improving the global economy's efficiency and productivity."  (from J.P. Morgan Chase's "Thought" Magazine, Fall, 2001)

Malaysian Prime Minister Supports Single Global Currency

"TOKYO (Nikkei)--Malaysian Prime Minister Mahathir Mohamad on Friday proposed the creation of a single international currency that would anchor global trade.

The currency, in which banking reserves would be held, should belong 'to no one country,' Mahathir said in a speech here at the Future of Asia conference sponsored by Nihon Keizai Shimbun Inc." (9 June 2001, Nikkei Net)

Australian Labor Magazine Article Supports SGC
Article in Australian Online Magazine for labor movement, "WorkerNet" discussing need for single global currency, and noting that the U.S. dollar is a likely choice; but doubting that the U.S. government would accede to world demands for a shared management of the dollar. ("Currency Unification: Dollarize or Die?" Worker Online, 27 April 2001)

One U.S. Congressman sees Single Global Currency in World's Future
U.S. Congressman Robert Paul stated, "There is nothing to fear from globalism, free trade, and and a single worldwide currency."  (Congressional Record, 13 March 2001)

World Economic Forum on whether world needs a Global Currency
Annual meeting of the world economic forum, featuring Robert Mundell and Jacob Frankel. Mundell speaks for uniting the dollar, euro and yen as the single global currency.

2000

9 November 2000.  "Nobel-winning economist pitches world currency" in the Toronto Globe and Mail.

The article begins...

     A Nobel-prize winning economist on Wednesday sketched out a rough blueprint for an effective single world currency encompassing the U.S. dollar, Europe's single currency and Japan's Yen, saying there was no major obstacle to its management.

     While the idea may seem bizarre to many — given politics, national pride, the fledgling euro's clumsy first steps, Japan's sluggish economy and America's paternal protectiveness of its monetary policy — to Robert Mundell the plan is as simple as one, two, three.

    The Columbia University economics professor, who once styled himself the "godfather of the euro", laid out his plan at an economic forum at the International Monetary Fund.

1 November 2000.  "Uniting as one" , by John Costello, CFO Magazine, Australia.

An excerpt reads:

 ".... And that leads us, dear reader, to the nub of the current discussion on globalisation. Should we have a common world currency? After all, we've standardised on a single system of weights and measures (apart from the US, which sticks resolutely to miles, inches, gallons and pounds). We're already seeing moves by major stock exchanges to merge on a global scale. So why not a single global currency? They've got a single currency in Europe with the euro, after all. Several Latin American countries have indicated they will abandon their local currency and switch to the US dollar. For us in Australia, a single currency would certainly solve the problem of what to do when you find a New Zealand coin in your loose change. The argument I've heard most recently is that rather than a single world currency, we have several according to groups of major trading nations. This would see North and South America tied to the US dollar. Of course, it would then be simply known as the dollar. The Europeans already have the euro. A related currency to the euro would be the afro, naturally. So where would that leave us? Well, we could tie ourselves to the Japanese yen and rename it the aspac...."

4 September 2000.  "What's wrong with one world currency?" by Larry Elliott, the Guardian, U.K.

Excerpts...

   So what is to be done? One long-term answer could be to put the euro out of its misery altogether and decide that monetary union in Europe is merely a stepping stone to global monetary union with the dollar as the single currency. Inadvertently perhaps, the justification for such a move was provided by a recent pamphlet produced by Britain in Europe, the lobby group that favours sterling's entry into the single currency.

  The report, quite fairly, does not pretend that euroland has a better job creation record than the UK (which it does not) and concedes that there are risks involved in both joining the euro and in staying out. But, interestingly, the reasons that it says tip the balance in its favour - the ability of businesses to sell more widely, achieving the "massive economies of scale seen in America", removing the barriers to trade represented by "separate currencies", limiting currency fluctuations, and having greater influence in decision-making would all seem to be arguments in favour of one world currency.

   If the name of the game is removing barriers then why stop at Europe? The inexorable logic of the BiE report is that making life easier for business will lead to higher growth and hence all of us will reap the trickle-down benefits of higher living standards. So, in classic Thatcherite fashion, the more barriers that can be removed the better, and given that more than 60% of world trade and inward investment are between North America, Western Europe and Japan, this ought to mean just one big currency. Indeed, two of the people responsible for the BiE paper, Robert Mundell and Willem Buiter, are supporters of a world currency....

17 January 2000.  "Continental Drift - World government is coming. Deal with it."  by Robin Wright in the New Republic.

Excerpts...

   With transnational commerce growing, all of Europe's national currencies became a bother. There was costly currency conversion and uncertainty about exchange rates. So the EU opted for a single currency. And one currency meant one central bank; each nation lost its autonomous central bank and, at a more symbolic level, its currency (or, as they aptly say in Britain, its sovereign). At this point-with nations surrendering control over their monetary po1icy--the line between a loose association of nations and an outright confederacy has arguably been crossed.

    As Europe was unifying its currencies, The Economist published an article called "One World, One Money," noting the analogously powerful logic behind global monetary union. The article stressed the political difficulty of such a goal, and some economists doubt its economic wisdom as well.

1999

U.S. Treasury Sees SGC in Long Term Future
Remarks by Edwin Truman, Assistant Secretary of the U.S. Treasury, at a conference in Japan, where he noted that a single global currency may well come in the 21st century, but not soon. (From the office of Public Affairs, U.S. Department of the Treasury, 6 December 1999.)

 

The 'End of Economics'? It's Not That Simple

MONEY  By Reginald Dale

"....The two tendencies will both continue in the years ahead. Pressures on people to assert their local identities will grow as economic blocs expand further and more and more countries join currency unions. Some people, such as the 1999 Nobel economics prizewinner, Robert Mundell, are already talking happily of a single global currency and central bank.

That is a non-starter for now. Just think of the United States allowing its interest rates to be set by a bank, chaired by a foreigner, of which more than 200 other countries were members. But it is a fair bet that the number of world currencies will decline in the years ahead and that further progress will be made toward global free trade." (International Herald Tribune, 3 December 1999)

 

14 June 1999.  "A new merger: the dollar, yen, and euro?" by David Francis, Christian Science Monitor.

Abstract:

Presents a discussion by finance experts on why a single
world currency would be beneficial. Why Harvard University economist Richard Cooper believes a single currency would deal with the fragility of financial markets; Advantages such as the elimination of foreign-exchange volatility; Nations that are discussing a dollar-based currency.

 

16 April 1999.  "Monomoney Mania: Why fewer currencies aren't necessarily better" by Paul Krugman on Slate.msn.com

Excerpts..

  At first sight, it might seem obvious that the fewer currencies there are, the better. After all, a proliferation of national moneys means more hassle and expense, because you keep on having to change money and to pay the associated commissions. It also means more uncertainty, because you are never quite sure what foreign goods are going to cost or what foreign customers will be willing to pay. And as globalization proceeds--as the volume of international transactions rises, both absolutely and relative to world output--the cost of having many currencies also rises. So why not have fewer--maybe only one? ...

   There's also the matter of speculation. The financial crises that have shaken much of the world all started, at least in the first instance, with investors betting that the currency of the afflicted nation would fall in value against harder currencies such as the dollar. Why not spoil the speculators' game by giving them nothing to speculate about ...

   But not so fast. There are still some very good arguments for maintaining separate national currencies ...

   So let's recognize this current enthusiasm for currency unification as what it is: an intellectual fad, not a deep insight. I say let a hundred currencies bloom. Well, maybe 20 or 30.

[Now, (4 Aug 2005), six years later, the 10 Accession countries will bring the euro to 22 countries.  The six Persian Gulf Countries plan a common curency by 2010.  The Eastern Caribbean Monetary Unon has existed since 1983.  Perhaps Mr. Krugman will soon be willing to write again about monetary unions?] 

1 February 1999.  "A Monetary Fable" by Paul Krugman. 

This satirical essay about a single global currency begins:

Once upon a time, the world had a single currency, the globo. It was generally well managed: the Global Reserve Bank (popularly known as the Glob), under its chairman Alan Globespan, did a pretty good job of increasing the global money supply when the world threatened to slide into recession, trimming it when there were indications of inflation. Indeed, in later years some would remember the reign of the globo as a golden age....

 

The Bahai faith supports a Single Global Currency

The article states, "A single currency would in some respects be like a world language, improving communications around the globe. It would eliminate the present problems of speculation, instability and uncertainty and would provide a strong foundation for the growing world economy. It would reduce a significant cost and risk of doing business internationally."  ("One World, One Currency", in "One Country", the Online Newsletter of the Bahai faith. Jan-March, 1999)

 

1998

December 1998.  "The IMF, Now More than Ever: The Case for Financial Peacekeeping" by David D. Hale in Foreign Affairs.

Summary:

Global economic chaos has made the International Monetary Fund a popular scapegoat, but the crisis shows just why the world needs a financial peacekeeper.

Excerpt:

... evolved into an institution that assumes some basic functions of a global central bank without provoking needless debate about whether the world needs a global currency or political union.

 

23 September 1998.  "Needed: A Fed for the World "  by Jeffrey E. Garten , Dean of the Yale School of Management and former Assistant Secretary of Commerce, in a New York Times Op-Ed.

"...This is what now must occur on a global scale. The world needs an institution that has a hand on the economic rudder when the seas become stormy. It needs a global central bank....

    Effective collaboration among finance ministries and treasuries is also unlikely to materialize. These agencies are responsible to elected legislatures, and politics in the industrial countries is more preoccupied with internal events than with international stability.

An independent central bank with responsibility for maintaining global financial stability is the only way out. No one else can do what is needed: inject more money into the system to spur growth, reduce the sky-high debts of emerging markets, and oversee the operations of shaky financial institutions. ..."

 

"One World, One Money" The Economist (pdf)
Wrote the Economist, "A global currency is not a new idea, but it may soon get a new lease on life." (The Economist, Sept 1998)

ECONOMICS MADE EASY Capital controls, interventions and what they mean to free markets", by Tim Healy

In an article following the East Asia financial crisis, explains how it developed. At the end, he wrote, "Until the day a single global currency takes root (unlikely anytime soon, mostly for nationalistic reasons) currency markets remain the best early-warning systems available to alert governments of economic weaknesses that need attention. "
(Asia Week, 18 September 1998)

Future of finance is real eye-opener

"....Barclays has commissioned the Henley Centre for Forecasting, the think-tank, to produce a report entitled 2020 Vision, a prediction of life in the year 2020. It forecasts not a single European currency, but a single global currency, or at least the planning of one. Graeme Leach, a director at Henley, says: "We have taken the clear trends visible today and projected them into the future, and we think they have a high level of validity. The single currency is one...."  (Financial Times, London, 4/26/98)

 

6 March 2000.   "Hard Times: A Letter From 2035" an essay from Fortune Magazine by Bruce Sterling.

Excerpt:

   "... But then came the introduction of our single world currency, the globo. It was based on the success of the euro, which had done so much to render modern Europe peaceful and boring. The globo put a swift end to those wild, unpredictable currency fluctuations and the tribes of speculative bandits who used to bankrupt Indonesia overnight.
From the point of view of the IMF, WTO, and MAI, the globo was terrific. Nowadays your cash is good anywhere. Thanks to the Web and the globo, no place on earth is left to lag and fester in forgotten underdevelopment.  Every government in the world has open books, transparency, more or less exactly the same economic policy. No trade barriers, no offshore tax shelters, no money laundries, no flimflam, no peanut shells, and, at the
bottom line, no real variety. We don't even have inflation. The world economy is everywhere, so there's no place left to hide. A downturn anywhere is a downturn everywhere in the world. Weep and the world weeps with you, laugh and you laugh alone....
"

1999

16 February 1999.  "THINKING AHEAD : New Currency Ideas Miss the Point" by Reginald Dale, International Herald Tribune.

While seeking to dampen the parade, the column does paint a solid picture for a single global currency.

  Suddenly, national currencies are no longer sacred. Argentina is thinking of replacing its peso with the U.S. dollar, while a Canadian historian predicts that Canada's dollar "will disappear in our lifetime."

  Europeans in 11 countries are trading in their once-cherished national moneys for the euro, and others around the world are wondering whether to follow in their footsteps.

  There is talk of a South American single currency, even of "dollarizing" the entire Western hemisphere. Serious people have given thought to a euro-like Asian single currency based on the yen.

  In France, Germany and Japan, government officials want to "stabilize" exchange rates among the dollar, the euro and yen, in a kind of global managed float. Idealists talk of a single world currency one day.

  Such fanciful ideas are not all new. French economists proposed a common European currency in something like its modern form in the mid-19th century, and Panama adopted the dollar in 1904. Dollars are already accepted for ordinary purchases at airports, and in quite a few countries, around the world.

  But two recent developments - the birth of the euro and the Asian financial crisis - have helped to shake up old ways of thinking. The successful debut of the euro at the beginning of this year has broken a number of national psychological taboos.

  Many Germans once deeply attached to their beloved Deutsche mark are now demanding that the introduction of euro bills and coins be accelerated; Swedes and Danes, who chose to stay out, are having second thoughts.

  At the same time, the Asian crisis and its ramifications have destroyed many people's faith in national currencies that previously seemed relatively stable.

  In a world in which huge capital flows can surge freely across frontiers, many are wondering whether their currencies are not too small to be defensible by themselves.

  The crisis has discredited attempts by many Asian countries, as well as Russia and Brazil, to keep their currencies pegged to the dollar without formally guaranteeing the exchange rate through such means as the currency boards employed, for instance, by Argentina and Hong Kong.

  The arrangements that seem to work best in the Global Age are either fixed exchange rates, such as those ensured by monetary unions or currency boards, or completely free floats — not half-baked schemes in between.

  Currency pegs can actually be dangerous when, as in the case of Thailand and Brazil, governments try to make the exchange rate the prime instrument for combating inflation without implementing the necessary domestic reforms to back it up.

  But many of the proposed solutions are unrealistic. Most of those who glibly call for regional imitations of the euro fail to understand the depth and complexity of the foundations on which the new European currency was built.

  The euro would not have been possible without years of painstaking economic convergence between like-minded countries, trading predominantly with each other and committed to pooling sovereignty in some form of political union. Nowhere else in the world do those conditions exist.

  Closer links among the euro, the yen and the dollar fall into the difficult middle ground between fixed and floating exchange rates. The idea is quite rightly opposed by Washington on the grounds that participants would often shrink from the necessary steps to align their currencies - for example, raising interest rates in a recession.

  But the broader lesson of recent events is that countries should beware of trying to treat the symptoms of a sick economy, weak exchange rates, rather than the sickness itself.

  If they want stable currencies, governments should concentrate on medicines that are known to work - such as good fiscal discipline and the establishment of strong and independent central banks. If domestic policies are right, exchange rates should be better able to take care of themselves.

1998

26 September 1998  "One World One Money" from the Economist.

Excerpts from the article.....

    ...So here is an idea: global currency union. Let nobody call it boringly feasible, or politically expedient. Yet, like all the best unthinkable ideas, it has more going for it than you might think-in principle, at least. The idea is not new. Richard Cooper of Harvard University proposed a single world currency in Foreign Affairs in 1984, and he was not the first to think of it. It seemed an outlandish idea, and still does. But much has happened lately to make it worth a moment's thought...

     ...Unfortunately, EMU is a somewhat flawed test as well. It is a political project as much as an economic one, so it will not reveal everything about how well a currency union among independent nation states might work. But it will reveal a lot, and its symbolic importance will be immense. If it fails, not only will that cause enormous political harm to the European Union, but the pressure for global financial barriers will be greatly strengthened. If it succeeds, the case for a global currency union will seem much more interesting.

  Fine, you say, but how would the world ever get from here to there? Hard to say, admittedly. Find the answer to that and the idea would be thinkable.

1997

21 October 1997.  Recommendation for Single global currency in "When Money Usurps Economy, Something Is Seriously Wrong" by David Morris in the St. Paul, Minnesota Pioneer Press.

Excerpts...

  ...In the early 1970s, the link between money and the creation of real wealth began to weaken. Governments allowed previously fixed exchange rates to float. Nations allowed domestic capital to roam at will. Computers allowed brokers to aggregate millions of individual accounts into a raging torrent of money that could profitably be "invested" in any one currency for just a few hours.

  The result? The speculative economy now dwarfs the real economy. As much as 98 percent of all foreign exchange transactions involve currency speculation. Money, a device first invented to enable trade has now become by far the largest component of trade. ..

  ...What can be done to safeguard our economies from the predations of rootless speculators?...

  • Resurrect John Maynard Keynes' proposal, overruled by the United States 50 years ago, for a single global currency against which all others would be measured.

[ David Morris is vice-president of the Institute for Local Self-Reliance, from whose website this article comes.]

 

 

 

1988

9 January 1988.   "GET READY FOR A WORLD CURRENCY"   Cover Story in The Economist. 

The article begins:

THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let's say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today's national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century.