NationStates Jolt Archive

befor i make an official proposition i wanted to see what the rest of the UN thinks about it first, so give me some feedback
"the collective right proposes that every memeber of the UN adopt a universal currencey, this will help take down economic differences in countries of the UN and make all equal, as well make us all stronger"

i like the idea. it could work similar to what the European Union is doing. It would have to be a well thought out plan addressing values of the currency and its weigh in against non-UN members.

It won't work.

Maybe in a few decades it will be a good idea but right now:

a) The world economy isn't sufficiently globalized
b) Changing money is easy enough anyways

If you look at the European Union the Euro helped spread teh financial crash bringing alot of other countries down along with Germany.

And Europe is a relatively analogous economy.

Imagine the United States and Burundi using the same currency.

Until the world's economy is more globalized, I predict around 2050 or slightly thereafter, a one-world currency would be suicide.

There are advantages to such a plan, but there are also objections. The two main objections are:
1) Who would regulate the currency? The supply of money is a crucial economic factor; it must increase with increasing production but not increase too much. Part of the reason for the stability of the US dollar is that the supply is closely regulated and manipulated by the Federal Reserve, and underwritten by the FDIC. Making a global currency stable would require centralized control of the world banking system.
2) Fluctuations in currency value moderate the economic cycle somewhat. When a nation suffers a balance of trade deficit, its currency flows into foreign nations, and the increase in supply causes the value of it to drop. This means that its exports are now relatively cheaper, which will help correct the trade deficit.

From a moderator perspective, I see nothing wrong with the proposal. Your best bet would be to call it a "Free Trade" proposal. "Furtherment of Democracy" could work too, but it'd be stretching the point a little based on what you've posted so far.

From a UN Member/Delegate point of view, I would campaign until I was blue in the face for a NO vote on this one.

i would submit it if i could but i need more endorsements, how do i get them, i am new to this

Well, you're in a big enough region which is a good start.

Either ask a couple of friendly-looking neighbours for an endorsement or move to another region where you think you're more likely to get endorsed.

befor i make an official proposition i wanted to see what the rest of the UN thinks about it first, so give me some feedback
"the collective right proposes that every memeber of the UN adopt a universal currencey, this will help take down economic differences in countries of the UN and make all equal, as well make us all stronger"

I'd vote for that. It makes sense, and this sensible suggestion relieves my mind slightly. I was beginning to wonder if every proposal in here was from someone with an IQ of slightly UNDER -200. Thank you for the reassurance.

Catholic Europe would vote against an' universal currency' resolution.

We support the proposal since it would encourage national economies to work more cooperatively, and could help globalize the wage scales which would deter corporations from exporting jobs.

We would vote against such a resolution. Our region (North America) is strong, and we already have a standard currency (the NorAm Dollar) for the most part. If we had to bring other poorer countries in line, it might destabilize our region's economy. As such, the Democratic Nation of Fette would vote no on such a proposal.

What about having richer countries having a 1:1 exchange rate for the switchover, while poorer ones get 1:2 etc. Sort of a way of retaining the current balance of economy, while at the same time ushering in a truly global economy.

/fleeting thought, not an economics major

It won't work.

Maybe in a few decades it will be a good idea but right now:

a) The world economy isn't sufficiently globalized
b) Changing money is easy enough anyways

If you look at the European Union the Euro helped spread teh financial crash bringing alot of other countries down along with Germany.

And Europe is a relatively analogous economy.

Imagine the United States and Burundi using the same currency.

Until the world's economy is more globalized, I predict around 2050 or slightly thereafter, a one-world currency would be suicide.

Huh! American economic arrogance. And Germany wasn't the cause of the crash on its own. There was a crash worldwide.
BTW, Free Outer Eugenia has a puppet called "The Global Slave Market".

What about having richer countries having a 1:1 exchange rate for the switchover, while poorer ones get 1:2 etc. Sort of a way of retaining the current balance of economy, while at the same time ushering in a truly global economy.

/fleeting thought, not an economics major

No matter how you do it, the wealthier countries pay to bring the poorer economies up to snuff. There's really no way around it. For example, when new nations came into the EU, Germany got stuck with the foot of the bill to subsidize their economies. And who is to set the monetary policy for this new currency? In Europe, the ECB (ECB / EZB / BCE / EKT / EKP) is setting the policy, and it's not necessarily a positive thing for all nations. When do you print more currency, and how much? Is inflation something that needs to be stopped dead in its tracks, or do you need to deflate the currency to try to help the poorer nations be able to buy from other nations? Right now, a person farming cocoa in Ghana is unlikely to be able to afford a Dell (Dude, it costs 200 times as much as my house!). Changing to a new currency won't help the cocoa farmer be able to buy stuff from the U.S., unless you say "We're redistributing wealth by adjusting the exchange rates so that the mean income in US$ is the same as the mean income in Chinese RMB(¥). And if you do that, then certainly no country will sign on, as it would mean that its economy would take a dive into the crapper.

Why not apply a idea that Hayek once proposed? That all countries allow their citizens to use whatever currency that they want. The market would then decide what currencies stay or go. This seems to be more flexable than imposing a universal currency on all nations.

Why not apply a idea that Hayek once proposed? That all countries allow their citizens to use whatever currency that they want. The market would then decide what currencies stay or go. This seems to be more flexable than imposing a universal currency on all nations.

That's actually not that bad of an idea.

You might have a temporary situation of economic chaos, but after it is sorted out in a few months the end product will be tres bien.

How do we establish exchange rates?

I think it gets into shady areas if we attempt this. We could all come together and crush a country's economy by simply saying that their currency is worthless.

How about instead of having a global currency that is used by everyone, instead we create an "international" currency that is only used for exchanges between nations?

Here is how it would work: Each nation would continue to use its own currency internally and set its own monetary policy, but the "international" currency would be declared to be legal tender in all nations. This means that, for example, a tourist could use this currency and be assured that it will be accepted anywhere that he goes. Likewise, international trade would be conducted in this currency. The "international" currency would also provide an objective yardstick against which to measure each nation economically.

Currency exchange rates would be set in relation to this "international" currency rather than having direct exchange between currency A and B. Instead, a party desiring some of currency B would convert to international currency, then to currency B (the details of broker commissions will have to be worked out later). Exchange rates would not be at a permanantly fixed value, but rather would be allowed to float as usual--if currency X is in demand, then its value will rise in the market.

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I predict around 2050 or slightly thereafter, a one-world currency would be suicide.


And just what is your prediction based on?

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The Holy Republic of Eredron refuses to support the idea of a universal currency, and will vote against any such UN resolution.

It won't work.

Maybe in a few decades it will be a good idea but right now:

a) The world economy isn't sufficiently globalized
b) Changing money is easy enough anyways

If you look at the European Union the Euro helped spread teh financial crash bringing alot of other countries down along with Germany.

And Europe is a relatively analogous economy.

Imagine the United States and Burundi using the same currency.

Until the world's economy is more globalized, I predict around 2050 or slightly thereafter, a one-world currency would be suicide.

Huh! American economic arrogance. And Germany wasn't the cause of the crash on its own. There was a crash worldwide.
BTW, Free Outer Eugenia has a puppet called "The Global Slave Market".

It is true that the initial causes of Germany's failing economy were probably mostly symptomatic of the global slump, but the agreements that Germany enterred into as terms of joining the EU made it impossible for them to employ the sort policies that would generally be recomended for combatting their particular obstacles - in particular, they were prohibited from raising interest rates under terms of their EU membership, which has exacerbated their problems considerably. I totally agree with whoever made the earlier comment to the effect of that the global economy must become more fluid (they used "globalized") before the many benefits of a universal currency could be realized. As long as economies are as geographically discrete as they are today, it is advantageous for everyone to permit individual countries to pursue monetary/fiscal policies appropriate to their geography, and a universal currency would make this impossible.

How about instead of having a global currency that is used by everyone, instead we create an "international" currency that is only used for exchanges between nations?

Here is how it would work: Each nation would continue to use its own currency internally and set its own monetary policy, but the "international" currency would be declared to be legal tender in all nations. This means that, for example, a tourist could use this currency and be assured that it will be accepted anywhere that he goes. Likewise, international trade would be conducted in this currency. The "international" currency would also provide an objective yardstick against which to measure each nation economically.

Currency exchange rates would be set in relation to this "international" currency rather than having direct exchange between currency A and B. Instead, a party desiring some of currency B would convert to international currency, then to currency B (the details of broker commissions will have to be worked out later). Exchange rates would not be at a permanantly fixed value, but rather would be allowed to float as usual--if currency X is in demand, then its value will rise in the market.

Great idea, Kitashima! Most of the benefits, none of the shortcomings. I think we'd be wise to adopt this, especially as an alternative to the current proposal.

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I fail to see how such a currency would work. As it stands now, currencies can be arbitrarily valued just because some people say so.