NationStates Jolt Archive

Well, I thought this was a great idea brought up by Poly-something or another... I forget his exact name.

Anyhow, (and the purpose of this is to get ideas formulated to create a proposal) the idea is to make all currencies equal in value (1 USD = 1 peso = 1 yen = 1 euro, etc), allowing for easy trade between nations and to stamp out the black market in "currency trading" (converting different kinds of currency to make a profit) and also eliminate the need to continue exchanging currencies whenever one travels internationally.

This would be enforced by a strict monitoring of nations' wealth by the United Nations. Nations would have to regularly print new currency or destroy old currency in order to keep the value of their money equal to every other nation's.

To make nations more willing to go along with it, and to keep with the rule regarding the "proposals can't change game mechanics" every nation can continue calling their currency whatever they want and can still designate whatever it looks like (they are, after all, the ones printing it out)

Anyhow, how do you guys like the concept?

Well, I thought this was a great idea brought up by Poly-something or another... I forget his exact name.

Anyhow, (and the purpose of this is to get ideas formulated to create a proposal) the idea is to make all currencies equal in value (1 USD = 1 peso = 1 yen = 1 euro, etc), allowing for easy trade between nations and to stamp out the black market in "currency trading" (converting different kinds of currency to make a profit) and also eliminate the need to continue exchanging currencies whenever one travels internationally.


We, the people of Waterloovia, support the opening up of the currency trading market, rather than the creation of resolutions to stamp it out.

Well, I thought this was a great idea brought up by Poly-something or another... I forget his exact name.

Not that it matters. Most of the time, I don't even remember the people I've shot down. Just come in, trash their proposal, and move on.

Anyhow, (and the purpose of this is to get ideas formulated to create a proposal) the idea is to make all currencies equal in value (1 USD = 1 peso = 1 yen = 1 euro, etc), allowing for easy trade between nations and to stamp out the black market in "currency trading" (converting different kinds of currency to make a profit) and also eliminate the need to continue exchanging currencies whenever one travels internationally.

Which also is a blow to national pride of many nations and would severely hurt the economies of thousands of nations that are relying on the current system. And it makes several currencies to be half their value or to have an inflated value. The only way you can do this and have it fair to all nations is to make all currency worthless, thus pretty much eliminating currency.

If you wish to do this, establish an official trade currency. USD, being the standard used in economy calculators, seems to be a good idea.

This would be enforced by a strict monitoring of nations' wealth by the United Nations. Nations would have to regularly print new currency or destroy old currency in order to keep the value of their money equal to every other nation's.

Or, they could just stop with the currency. In the end, currency won't be worth the paper it's printed on.

To make nations more willing to go along with it, and to keep with the rule regarding the "proposals can't change game mechanics" every nation can continue calling their currency whatever they want and can still designate whatever it looks like (they are, after all, the ones printing it out)

Which really doesn't help if it's worthless.

Anyhow, how do you guys like the concept?

Hate it.

OOC: So basically, you're proposing a unified currency for the NSUN, like the Euro in RL, except to get past game mechanics, we all get to keep calling it by our own names. _Myopia_ doesn't really care about the independence of its currency as a national symbol (not big on patriotism here, plus we don't think cultures and nations are really defined by petty things like money), so the only real concern is economic costs and benefits. And I don't really know enough about economics to say whether unified currency is a good idea, so I don't consider myself qualified to have an opinion on your concept.

I like the idea as it makes economics and travel alot easier for the common person. Also, it will promote free and open trade. I'm not a big free trade person, but i could go along with this idea. Word it right and make it look professional, and i think i can approve it (I am a UN delegate).

I come from Europe, one of the last countrys that has not joind the tyrant org. that is the E.U. (Thank God) in real life and so I can not agree to this for my country. This looks just like the Euro currency deal when it first came to be. I do not like it. This is my oppinon and so get back to the topic and not try to change my mind or comment on what
I just said.
From your stand point (the author of the act) it is well made, I can see that it might benefit many.

OOC: please forgive any indicators of drunken posting in the following.

Again, a grounding in basic economics would be useful here.

Currencies in the real world are sovereign obligations. The relative value of currencies reflects the responsibility of the governments of each country. The US dollar has dropped 40% in the past few years because the US government has been pursuing irresponsible fiscal policies. Get it?

You cannot peg currencies without removing the ability of the government to default on its debt. Seriously, this is so basic I hardly know how to address the recommendation.

yeah. i hardly know how. please withdraw this proposal and get at least a basic education in economics.

Without getting into whether it was a good idea or not, the process by which the RL European Union (or much of it, at any rate) moved towards currency unification was a very convoluted process that involved a gradual coordination of various economic and budgetary policies in those countries coupled with institutional unification.
Another historical example is the RL United States itself from the time of independence under the Articles of Confederation through the early period of the federal government under the US Constitution.
There's a lot more involved than just setting a currency valuation formula; but I'm open to considering mechanisms that might be legal under the NS formula. Until the last 30 years or so, the RL United States set its currency value against pecious metals (hence, the "gold standard"; and that was the reason for the famous "Cross of Gold" address of William Jennings Bryan in 1896 in support of silver as a benchmark.)
What about setting the value of an artifical currency, say something called the NSuno against a commodity such as a precious metal, and then move the valuation of trade towards that currency? It's just a thought, but it avoids the unworkable mechanism of printing and burning paper notes (after all most currency is symbolic rather than actual paper notes to begin with these days) and if limited to multinational trade, then it would accomplish a more limited objective of standardizing trade between states. Just a thought, mind you.

For illustration:

You want to make your Knish equal in value to my Velo. Uh-huh.

I have a Frightening economy, 0.1% unemployment, average citizen makes the equivalent of $100,000 per year (100,000 Velos)

You have an imploded economy, 90% unemployment, average citizen makes the equivalent of $10 per year (100,000 Knishes)

So, what you're saying, is to let your people take their money to my country and spend it like it were my money. So I should honor your Knishes as if they were Velos, even though they have only a slight percentage of the purchasing power.

Uhm... no. :rolleyes:

We, the people of Waterloovia, support the opening up of the currency trading market, rather than the creation of resolutions to stamp it out.

But currency trading is just a scam. How can that be good for anybody (except the criminal)?

Which also is a blow to national pride of many nations and would severely hurt the economies of thousands of nations that are relying on the current system. And it makes several currencies to be half their value or to have an inflated value. The only way you can do this and have it fair to all nations is to make all currency worthless, thus pretty much eliminating currency.

Well, i don't see how it's a blow to national pride, seeing as you get to keep the aesthetics of your currency however you would like it.

And although I do admit that I don't know too much about economy, my basic (and overly simplified) interpretation goes like this:

The Dominion of Tejasdom has, stored in a national vault somewhere, a whole bunch of gold (or whatever precious metals) worth $5 billion dollars. I have 5 billion dollars in currency circulating in my country (and internationally? Or would that mess things up?), so the value of a 1-dollar bill is equal to 1 dollar. However, if my country suddenly printed up an extra 10 billion dollars in CURRENCY, but my gold stores (i think it's actually called specie?) remained the same $5 billion, then I would have 15 billion in currency circulating around, but only 5 billion in actual wealth to back it. Thus, i would have inflation, and all of my currency would be worth only 1/3 as much.

My proposal for maintaining currency value is a sort of reverse-process of this. If a nation has $5 billion in real wealth and 5 billion in currency, but after a year gains $3 billion in real wealth through a trade surplus, then they will be forced to print out $3 billion currency, to maintain the same value for their currency. Either way, it doesn't affect the actual wealth of the nation, just how much the currency is valued against it.

Now, I realize that it's a very simplistic view of things, but could someone at least explain to me what concept(s) i am missing, instead of just saying, "No, that's just stupid. Anybody with an economic degree will realize that's not going to work." The majority of us here do not have economic degrees, so maybe someone with one would care to explain it to us?

The US dollar has dropped 40% in the past few years because the US government has been pursuing irresponsible fiscal policies. Get it?

Yes, I get that. So in this case, the United States would be forced to take a certain amount of currency out of circulation, however much is needed to restore the value of the US dollar to the standard value.

You cannot peg currencies without removing the ability of the government to default on its debt. Seriously, this is so basic I hardly know how to address the recommendation.

Again, excuse my basic economic understanding. I interpret that to mean that, forcing the value of a currency (basically, eliminating inflation/deflation altogether) will take away the ability of governments to loan money from other nations (as that will cause inflation?)

I think you ARE right in that aspect. In that case, and this is how my thinking goes, could you explain what's wrong with this interpretation (not a challenge, actually a request):

Tejasdom and Asshelmetta both have 5 billion in real wealth and 5 billion in currency. Tejasdom loans 3 billion in real wealth from Asshelmetta. When this happens, 3 billion in actual gold is taken from Asshelmetta's vault and placed into Tejasdom's vault. Asshelmetta then takes 3 billion of its currency out of circulation (to equalize the currency with the real wealth), and Tejasdom is then authorized to print 3 billion in currency. Thus, now Tejasdom has 8 billion in real wealth AND currency, and Asshelmetta has 2 billion in real wealth AND currency. Both currencies reflect actual wealth.

Tejasdom uses the extra 3 billion to finance some sort of venture. For example, to build new gold mines (which will domestically lower the cost of gold materials (used in consumer items and industrial machinery)). After this is done, Tejasdom mines 4 billion of gold and puts it in the vault, giving it 9 billion of real wealth (8 billion - 3 billion to build mines + 4 billion harvested from mines). Tejasdom then repays Asshelmetta 5 billion (3 billion that it borrowed + 2 billion interest). Tejasdom ends up with 4 billion and Asshelmetta ends up with 7 billion. (And subsequently, the currency is taken out/added to circulation to reflect that.)

Asshelmetta gets a 2 billion return for its loan to Tejasdom. Tejasdom ends up with LESS real wealth and currency (4 billion compared to the 5 billion before the loan). However, that is OK because, with the increased gold production, the cost of living has been lowered (With more gold available, non-rust gold screws are now dirt cheap, reducing the cost of pipe maintenance by 50%, which is greater than the 20% drop in overall wealth. Thus, the citizens actually have MORE wealth relative to living costs)

Keep in mind that i'm just making the gold stuff as i go along. The money could be used in ANY fashion. It could go toward building new powerplants to reduce the cost of electricity, or more farms to reduce food costs, etc.

I think maybe i'm missing some part where the loans have to be repaid? Anyhow, tell me why my interpretation if flawed.

So, what you're saying, is to let your people take their money to my country and spend it like it were my money. So I should honor your Knishes as if they were Velos, even though they have only a slight percentage of the purchasing power.

Uhm... no.

But see, it's not actually forcing nations to accept currency at the marked value. This basically forces the marked value of currency to reflect the REAL wealth value. So yes, you would exchange knishes for velos, but in this case knishes = velos. The difference is, you with your superb economic state (and assumedly, large real wealth) would have 50 billion velos in circulation to spend or whatever, while my economy, in that torrid state that it's in, would only have 10 billion velos, because i don't have as much real wealth because my economy isn't quite as good.

Hut! Does anyone else get my concept?

I have a Frightening economy, 0.1% unemployment, average citizen makes the equivalent of $100,000 per year (100,000 Velos)

You have an imploded economy, 90% unemployment, average citizen makes the equivalent of $10 per year (100,000 Knishes)


just out of curiosity, do they actually have stats for those? I can see nations' economies, but i didn't know we could find out unemployment rates and GDP too... where do i find that kind of stuff?

Speaking for my people, we do NOT wish to devalue our silver talents in this way, nor do we wish to no longer participate in the money market which has been good for small countries with large banks for many, many years.

While a system of a single unit may be well and good for countries share a single land mass, for our island nation it does not seem prudent.

Thank you.

Okay, to clarify, my definition of the "Currency Trading" market is this:

An individual (or crime organization) trades their 800 US dollars for 1000 Mexican Pesos. Then they trade their 1000 mexican pesos for 600 euros. Then they trade their 600 euros for 900 US dollars.

Thus, they make a profit of 100 US dollars, through basically scamming the currency exchange. The currency exchange loses, and it also has a negative impact on all nations involved.

This is made possible because all nations use different standards. Some nations compare their currency to gold, others to silver, and some compare their currency to other nations' currencies.

When I said currency trading i wasn't in any way referring to nations loaning money to other nations.

But currency trading is just a scam. How can that be good for anybody (except the criminal)?

Banks also do it. So you're telling me that banks are scamming people and are criminals? Boy, most nations on Earth are in for a big shock when they find out about these massive crime syndicates.

Well, i don't see how it's a blow to national pride, seeing as you get to keep the aesthetics of your currency however you would like it.

National pride includes being able to say your currency is better than someone else's.

And although I do admit that I don't know too much about economy, my basic (and overly simplified) interpretation goes like this:

The Dominion of Tejasdom has, stored in a national vault somewhere, a whole bunch of gold (or whatever precious metals) worth $5 billion dollars. I have 5 billion dollars in currency circulating in my country (and internationally? Or would that mess things up?), so the value of a 1-dollar bill is equal to 1 dollar. However, if my country suddenly printed up an extra 10 billion dollars in CURRENCY, but my gold stores (i think it's actually called specie?) remained the same $5 billion, then I would have 15 billion in currency circulating around, but only 5 billion in actual wealth to back it. Thus, i would have inflation, and all of my currency would be worth only 1/3 as much.

Which is your fault and those of us who keep our currencies at higher values should not be penalized for your mistake.

My proposal for maintaining currency value is a sort of reverse-process of this. If a nation has $5 billion in real wealth and 5 billion in currency, but after a year gains $3 billion in real wealth through a trade surplus, then they will be forced to print out $3 billion currency, to maintain the same value for their currency. Either way, it doesn't affect the actual wealth of the nation, just how much the currency is valued against it.

Your forgetting that some nations don't have anything to back their currency, thus they would have no currency. As that is changing game mechanics, we would instead have to set our currencies as equal to something. Since this calls for all nation currencies to be equal, setting it to the highest value isn't possible. But setting it to the lowest is.

Another problem you have is that different nations have different methods of backing their currency. DLE uses star systems. As star systems are obviously more valuable than even gold, DLE would have to flood the market with trillions of tons of currency (keep in mind how much a dollar bill ways and then think of how many are required for a single ton). The result is economic disaster. Thus, DLE prints far less currency than it can and sets aside systems to not be used for backing currency until a later date.

Now, I realize that it's a very simplistic view of things, but could someone at least explain to me what concept(s) i am missing, instead of just saying, "No, that's just stupid. Anybody with an economic degree will realize that's not going to work." The majority of us here do not have economic degrees, so maybe someone with one would care to explain it to us?

It already has been.

But see, it's not actually forcing nations to accept currency at the marked value. This basically forces the marked value of currency to reflect the REAL wealth value. So yes, you would exchange knishes for velos, but in this case knishes = velos. The difference is, you with your superb economic state (and assumedly, large real wealth) would have 50 billion velos in circulation to spend or whatever, while my economy, in that torrid state that it's in, would only have 10 billion velos, because i don't have as much real wealth because my economy isn't quite as good.

Hut! Does anyone else get my concept?

Yes. It's basically a barter system, except paper that promises goods if redeemed. You do realize money evolved from that system, right? You're basically setting us all back thousands of years in a single move.

Okay, to clarify, my definition of the "Currency Trading" market is this:

An individual (or crime organization) trades their 800 US dollars for 1000 Mexican Pesos. Then they trade their 1000 mexican pesos for 600 euros. Then they trade their 600 euros for 900 US dollars.

Actually, due to the fees involved, they would end up at least $200 less than they started. That's because the bank dealing with the Euros will subtract a fee and the bank dealing in dollars will subtract a fee.

Thus, they make a profit of 100 US dollars, through basically scamming the currency exchange. The currency exchange loses, and it also has a negative impact on all nations involved.

It's been tried already. See above for the results.

This is made possible because all nations use different standards. Some nations compare their currency to gold, others to silver, and some compare their currency to other nations' currencies.

Which still leaves a problem of some nations being economically ruined by this due to what they compare their currency to.

When I said currency trading i wasn't in any way referring to nations loaning money to other nations.

That's actually a part of currency trading.

National pride includes being able to say your currency is better than someone else's.

Thus reason to say To hell with your national pride argument.

Which is your fault and those of us who keep our currencies at higher values should not be penalized for your mistake.

And how is it a penalty to your economy? Enforcing laws against inflation/deflation will actually crack down on fraud with nations that inflate their currency but still try to pass it off as stated value (such as Confederate States in the U.S. Civil War)

Your forgetting that some nations don't have anything to back their currency, thus they would have no currency. As that is changing game mechanics, we would instead have to set our currencies as equal to something. Since this calls for all nation currencies to be equal, setting it to the highest value isn't possible. But setting it to the lowest is.

Every nation backs its currency with something. I just used the gold standard as an example. Some nations (those with poor economies) may not have MUCH to back it with, and in that case, this concept forces their currency amount down to their actual wealth.

Another problem you have is that different nations have different methods of backing their currency. DLE uses star systems. As star systems are obviously more valuable than even gold, DLE would have to flood the market with trillions of tons of currency (keep in mind how much a dollar bill ways and then think of how many are required for a single ton). The result is economic disaster. Thus, DLE prints far less currency than it can and sets aside systems to not be used for backing currency until a later date

For a nation that backs its arguments with imaginary technology on-the-spot, i would think that you could come up with a solution to "my money weighs too much"

Yes. It's basically a barter system, except paper that promises goods if redeemed. You do realize money evolved from that system, right? You're basically setting us all back thousands of years in a single move.

No, kid. The barter system was the trading of one good for another good. A standard currency was created within societies as a standard to compare goods too. A currency system is in place for individual societies/nations, but global society picture is still very much in a barter system. You have a bunch of nations bartering one's currency for another's currency, with the value fluctuating constantly based on specie and what one nation is willing to pay. The proposal advances the GLOBAL society past this type of barter system.

Heh, didn't really bother to read the whole thing, did you?

Thus reason to say To hell with your national pride argument.

So you have no pride in your nation?

And how is it a penalty to your economy? Enforcing laws against inflation/deflation will actually crack down on fraud with nations that inflate their currency but still try to pass it off as stated value (such as Confederate States in the U.S. Civil War)

Which won't be served by an official trade currency how?

Every nation backs its currency with something. I just used the gold standard as an example. Some nations (those with poor economies) may not have MUCH to back it with, and in that case, this concept forces their currency amount down to their actual wealth.

Which cannot be solved with an official trade currency how?

For a nation that backs its arguments with imaginary technology on-the-spot, i would think that you could come up with a solution to "my money weighs too much"

For someone who pretends to bother having evidence to back up his arguements with, one would think you would actually check out the links in my signature, which have been there since before you started posting on this forum, instead of spouting nonsense not backed up by anyone who bothers to take ten minutes to read a couple of topics. If you want additional research, look up the Siesatia store and the Klonor Store for Young Nations.

In other words, get some facts to back up your claim there instead of making wild and unsupported accusations.

No, kid. The barter system was the trading of one good for another good. A standard currency was created within societies as a standard to compare goods too. A currency system is in place for individual societies/nations, but global society picture is still very much in a barter system. You have a bunch of nations bartering one's currency for another's currency, with the value fluctuating constantly based on specie and what one nation is willing to pay. The proposal advances the GLOBAL society past this type of barter system.

Irony: You embarass yourself by not bothering to do any research on the person you are talking to when making a claim about what them making up technology on the spot, and yet you accuse me of being a kid.

Quick question: If currency was creating for something to compare goods to, then why was there such a fuss over the gold standard vs. the silver standard so recently in human history in the US? Or, maybe this is a case of the currency representing one good and the other goods being compared to that good. And wouldn't it make sense for nations to back their currency with what they hold as valuable to them, instead of something that might be totally worthless?

Heh, didn't really bother to read the whole thing, did you?

Didn't bother to actually do any research on who you are talking to or read the entirety of my posts, did you?

just out of curiosity, do they actually have stats for those? I can see nations' economies, but i didn't know we could find out unemployment rates and GDP too... where do i find that kind of stuff?

Here's a calculator that does it (http://nseconomy.thirdgeek.com/) though its not "manditory". There are also unseen variables in your national stats which alter things, but only the moderators know all of those.

Think about it, if a unified world currency was such a great thing, why hasn't it been done in real life?

Yes, there are multinational currencies. The most well-known one is the Euro, obviously. But if you care to read the news, you'll see how countries like Britain and the Scandinavian nations don't want to use the Euro, while the Euro-using countries demand big-time banking and economic reforms from those who want to join the Eurozone.

That's the whole problem with a single currency - different nations have different economic needs. The Euro is workable because European economies are of similar development levels and strength. There isn't a big economic gap between, say, France and Spain, or between Italy and Belguim.

But we're talking the whole world here, and to complicate matters, it's NSWorld, which, as a glance at the other forums will reveal, is completely insane. Well okay, your proposal will only affect the UN, but I'm pretty sure it's a representative sample. So you're going to impose a single currency on capitalist nations, communist nations, and everyone in between. That alone tells you how much of a problem this is.

Someone else has already pointed out the basic problem with a poverty-stricken and a strong economy having the same currency. Now here's another problem, and it's part of the reason why some countries don't want to be in the Eurozone, and that's, it causes nations to lose economic sovereignity. Now before you recoil at that word, think of the different approaches to economic management. Some governments want a completely planned economy, some want a complete free-for-all, most want differing degrees of both.

Managing your currency is part of that. If you rely on exports, you want your currency weak. If you import a lot, you want it strong. Then you have things like inflation and what level you should aim for, since too little and too much is both bad. Then you have whether your government should run deficits, and if so how much. What to put in reserve, how much to put in circulation, devaluating, and that's just off the top of my head.

Within one country, you'll have a tug-of-war of several different economists, governments (think Clinton vs. Reagan/Bush), etc. etc. etc. But put in a single currency and you have the whole damn UN tugging and pulling at this, and that UN includes nations all over the economic spectrum, both in terms of development and prosperity and in ideology, over all those factors, and I think without being pessimistic I can say that you're not ever going to get any kind of agreement on that.

And if all countries retain control over design, name and printing, you have the danger that some nations will suffer economic collapse and catastrophic inflation... which wouldn't be a problem, except that since the whole UN uses the same currency, about 1/3 of the world is affected. Even without a single currency an economic collapse in one nation can wreak havoc - like the 1999 Asian crisis, where collapse in Thailand led to a loss of confidence in the whole region and took out Indonesia, South Korea, and Hong Kong, among others, as well. And if you have one country which decides to print money without backing, you get global inflation.

Okay, to clarify, my definition of the "Currency Trading" market is this:

An individual (or crime organization) trades their 800 US dollars for 1000 Mexican Pesos. Then they trade their 1000 mexican pesos for 600 euros. Then they trade their 600 euros for 900 US dollars.

Thus, they make a profit of 100 US dollars, through basically scamming the currency exchange. The currency exchange loses, and it also has a negative impact on all nations involved.

This is made possible because all nations use different standards. Some nations compare their currency to gold, others to silver, and some compare their currency to other nations' currencies.

When I said currency trading i wasn't in any way referring to nations loaning money to other nations.

Yes, it's called arbitrage (http://www.wikipedia.com/wiki/Arbitrage). It's how currencies find their equilibrium. There is no scam, just an inbalance being corrected. It's Adam Smith's invisible hand of the market.

Well, I thought this was a great idea brought up by Poly-something or another... I forget his exact name.

Anyhow, (and the purpose of this is to get ideas formulated to create a proposal) the idea is to make all currencies equal in value (1 USD = 1 peso = 1 yen = 1 euro, etc), allowing for easy trade between nations and to stamp out the black market in "currency trading" (converting different kinds of currency to make a profit) and also eliminate the need to continue exchanging currencies whenever one travels internationally.

This would be enforced by a strict monitoring of nations' wealth by the United Nations. Nations would have to regularly print new currency or destroy old currency in order to keep the value of their money equal to every other nation's.

To make nations more willing to go along with it, and to keep with the rule regarding the "proposals can't change game mechanics" every nation can continue calling their currency whatever they want and can still designate whatever it looks like (they are, after all, the ones printing it out)

Anyhow, how do you guys like the concept?

Disagree, Currency value differences are due to the comodity backing the currency of the nation, and/or its trade value.

This proposal seeks to destroy the trading power of economically powerful nations.

Think about it, if a unified world currency was such a great thing, why hasn't it been done in real life?[quote]

I guess because of constant infighting and nations not wanting to be controlled by some all powerful "Inflation Manager" organization. Was hoping to find a way around that, but I guess there are more economic intricacies than simply specie value/currency value.

[quote]But we're talking the whole world here, and to complicate matters, it's NSWorld, which, as a glance at the other forums will reveal, is completely insane. Well okay, your proposal will only affect the UN, but I'm pretty sure it's a representative sample. So you're going to impose a single currency on capitalist nations, communist nations, and everyone in between. That alone tells you how much of a problem this is.

Someone else has already pointed out the basic problem with a poverty-stricken and a strong economy having the same currency. Now here's another problem, and it's part of the reason why some countries don't want to be in the Eurozone, and that's, it causes nations to lose economic sovereignity. Now before you recoil at that word, think of the different approaches to economic management. Some governments want a completely planned economy, some want a complete free-for-all, most want differing degrees of both.

I get how these countries would USE the currency differently. But concerning international trade, what's the difference between 20 bills worth $20 or 40 inflated bills still worth $20?

Managing your currency is part of that. If you rely on exports, you want your currency weak. If you import a lot, you want it strong. Then you have things like inflation and what level you should aim for, since too little and too much is both bad. Then you have whether your government should run deficits, and if so how much. What to put in reserve, how much to put in circulation, devaluating, and that's just off the top of my head.

Okay... so the way i'm interpreting this. When countries export, they GAIN real wealth (they are losing whatever commodity in return for real wealth.) Therefore, their currency will deflate, and therefore it is a good idea to have an inflated ("weak?") to begin with, so that it will be more normal in the end. Is that interpretation correct?

And also, a hypothetical question: Say, person A begins with $100 in currency, which is worth $100 in real wealth. Through trade export, the real value of the currency rises, so his $100 currency is actually worth $150 in real wealth. After this happens, seeing the inflation, if $50 in currency was printed and issued to person A, giving him $150 in currency, wouldn't everything be normalized? He would have more money (reflecting the increase in real wealth) but the currency would remain the same.

Within one country, you'll have a tug-of-war of several different economists, governments (think Clinton vs. Reagan/Bush), etc. etc. etc. But put in a single currency and you have the whole damn UN tugging and pulling at this, and that UN includes nations all over the economic spectrum, both in terms of development and prosperity and in ideology, over all those factors, and I think without being pessimistic I can say that you're not ever going to get any kind of agreement on that.

Hrmm. Yeah, I get that now... It probably would be impossible to get every single nation to submit under an all-powerful inflation monitoring organization.

Anyhow, thanks for the input.

Printing more money = currency devaluation = forced lowering of the people's savings and accounts = theft.


You sir, are a thief.

...one would think you would actually check out the links in my signature

uh, links in your signature?
i don't see any signatures on anybody's posts.

oh, nevermind. a profile settings thingy.
odd that .sigs are off by default.

hmmm... now i'm going to have to cook up a .sig for myself...

But currency trading is just a scam. How can that be good for anybody (except the criminal)?

Currency trading is not a scam - there are frictional costs associated with currency conversion.
Even within a country, there are costs involved in moving money from one place to another.
When you're talking about changing money between two currencies, there are a whole slew of further risks involved. Holding the currency that you received is a huge risk. More than a risk, it's a cost. If the interest rates are higher in great britain than in the us, for instance, you lose money by keeping dollars rather than pounds.
Beyond the direct cost, there is risk. What protection do I have if I'm holding pounds and george soros decides to break the bank of england again because their monetary policies are insustainable? No protection, that's what I have.

So... you think currency traders should assume these costs and risks out of the goodness of their hearts, and not charge a premium for the service they're providing. Right. Lots of luck changing money, then.



Well, i don't see how it's a blow to national pride, seeing as you get to keep the aesthetics of your currency however you would like it.

Ooh, we get to keep the illuminati pyramid on our paper money? Thanks so much overlord Tejasdom!
Oh wait, we can't print any unless you say so.
And we can't issue short-term debt to meet our daily funding obligations.
And we can't adjust interest rates to stimulate our economy or prevent inflation.

In fact, our national government can't do much of anything without your approval, can it? But no, you're right. That's not castrating at all.



And although I do admit that I don't know too much about economy, my basic (and overly simplified) interpretation goes like this:
*convoluted explanation of what seems like it might be a currency board deleted because... well, because it didn't make much sense.*

The majority of us here do not have economic degrees, so maybe someone with one would care to explain it to us?

Leaving aside the non-relativistic viewpoint (you have some outside viewpoint with which you can value the commodities relative to the amount of currency printed), the logical fallacy here is in the valuation. You talk about X billion worth of gold. That's a gold standard. Oh, but it can be anything. OK, but my economy isn't primarily commodity-based.

What is the real value of the services in my economy? What about the patents? Do I get to include the value of patents registered in my country, or only those invented in my country, or only those invented by my citizens?

No, maybe I can explain it to you sticking with gold. If I claim to have $10 billion in gold waiting to be mined in my country, is that part of the equation? Or what if I use my superior technology to filter trace amounts of gold from the ocean currents within my territorial waters? Sure, I'm mining it within my territory, but won't other countries argue that the ocean water is a shared resource and that gold would have flowed to them if I hadn't stolen it?

What you're trying to propose seems like a currency board, but without and benchmark currencies. Go and google "currency board" and you'll see what I mean. OK?


Again, excuse my basic economic understanding. I interpret that to mean that, forcing the value of a currency (basically, eliminating inflation/deflation altogether) will take away the ability of governments to loan money from other nations (as that will cause inflation?)

I think you ARE right in that aspect. In that case, and this is how my thinking goes, could you explain what's wrong with this interpretation (not a challenge, actually a request):

*another long and needlessly complicated example deleted.*

I think maybe i'm missing some part where the loans have to be repaid? Anyhow, tell me why my interpretation if flawed.

1a. Countries are not companies. :headbang:
1b. Companies are not countries.

Countries don't generally loan money to other countries. In the real world, I mean. Your example treated the countries involved as nothing more than corporations.

Look, nations are sovereign. People form a government, and that government is responsible to its people. A big part of that responsibility is in managing trade within the country's borders. The mechanism for doing that is the nation's currency. Once you delegate that responsibility, you're not so much a country anymore.

My wife is calling. Gotta run. Hope this helped.

Countries don't generally loan money to other countries. In the real world, I mean. Your example treated the countries involved as nothing more than corporations.

Look, nations are sovereign. People form a government, and that government is responsible to its people. A big part of that responsibility is in managing trade within the country's borders. The mechanism for doing that is the nation's currency. Once you delegate that responsibility, you're not so much a country anymore.

My wife is calling. Gotta run. Hope this helped.

Countries do loan money to other countries. Treasury bonds are just one means by which this is done. And herein lies another arguement for why this proposal is felgercarb:

I buy 100,000 Krelbs for 10 Velos. This proposal passes. I now sell my 100,000 Krelbs for 100,000 Velos, because all are now equal. Nothing else changed - just a 1:1 law moved in.

This proposal is an attempt to socialize the world. Denied, denied, denied. We like our economy and do not wish to become the welfare mother of the world.

Read "Atlas Shrugged" by Ayn Rand for more opinions on this.

By making all currency of equal value, you cause monetary destabalization. Prices will flutuate rapidly.... The economies of nations, and consumer confidence will crash, revolutions will rise, wars will be fought... And you, sir, will be the first against the wall...

By making all currency of equal value, you cause monetary destabalization. Prices will flutuate rapidly.... The economies of nations, and consumer confidence will crash, revolutions will rise, wars will be fought... And you, sir, will be the first against the wall...

Last. I want him to get to watch the whole thing.

And you, sir, will be the first against the wall...

By "wall" I assume you mean "airlock door in a ship in high orbit over Earth."

Read "Atlas Shrugged" by Ayn Rand for more opinions on this.

I regret every one of the 131 pages I read before the 5th or 6th completely ridiculous strawman argument combined with a flat-out biased left-wing caricature made me sigh and start using it as a coaster.

I buy 100,000 Krelbs for 10 Velos. This proposal passes. I now sell my 100,000 Krelbs for 100,000 Velos, because all are now equal. Nothing else changed - just a 1:1 law moved in.

I'm pretty sure that if this did somehow pass (and if it does, God help us all) you'd organise things like how the Euro was done - all the member countries had their existing currencies pegged at different rates and then converted. You probably wouldn't have that situation.

EDIT: 1:1 was written in. Sorry about that. This only gets worse.

That said, I too am not keen on nicely backing the Kelssek dollar with lots of reserves only to have some desperate government with a financial crisis decide to solve their problems by printing more money and undercutting my currency's value. Or on having anything remotely equivalent to the RL World Bank or IMF around. Can't we learn from real-world mistakes here?

Countries do loan money to other countries. Treasury bonds are just one means by which this is done.

Not so much, no.
Foreign Central banks hold large amounts of treasuries because we buy so much of their stuff, and pay for it with dollars. Them holding onto it instead of repatriating it is primarily a way to keep their currencies from getting so strong they can't sell to us anymore. For many countries, a large USD holding is also a bulwark against currency manipulation by their rich citizens and people like George Soros.

And once they have all these dollars, they've got to do something with them, right? So they buy treasuries in the secondary market.

No country directly loans money to the United States.
In fact, it's pretty rare for any country to loan money to any other country.

That's the job of the World Bank and the IMF.