luminati Review Magazine
There are many pros and cons against the theory of a single one world currency. Many individuals think it is a very good idea while some feel that a single currency will disadvantage many. In fact, the more you delve on this idea the more confused you tend to become. The following are some the pros and cons of a single world currency:
Advantages of A Single World Currency
1. There are many regions and nations in the world that have already taken a step forward in this direction. Latin America, Europe and Asia have already opted to embrace a regional currency to promote and encourage commerce as well as the economy of scale and its efficiency. The use of a single world currency will also make use of physical proximity when it reduces barriers to trading.
One World Currency
2. A single currency will draw a close to currency speculation. It will be easier for people to travel. They would find it very convenient and streamlined to move from one place to another without the bother of exchanging currency of another nation.
3. The International Monetary Fund or the IMF already uses a new form of single currency in its SDR’s or special drawing rights. This is not real currency but a unique type of currencies that are used by members of the IMF. These currencies can be converted into any type of currency the borrower needs.
4. Multiple currencies have a number of associated problems and they lead to imbalances in the global economy, huge volatile capital flows, pressures on exchange rates and an increasing growing excess of reserves that has the potential to lead to a global crisis
5. Small and vulnerable nations will gain a lot from a single world currency. One world currency will give these nations more stability and certainty.
Disadvantages Of A Single World Currency
1. With the introduction of a single world currency in many different nations there will be the rise of divergent economies. Some countries will be doing well and some nations will not be doing well however they will be protecting their individual interests with the same currency. The early phase will be very painful with the loss of some national fiscal tools. There will also be the risk of many nations failing to pay their existing debts. This is one of the present issues the Euro is facing. However with a single currency the results may be different.
2. The introduction of a single world currency may affect national sovereignty to a large extent. Nations would need supreme trust amongst one another to support single currency in the world. The Government would require accepting the loss of certain monetary controls in such environments.
3. The dollar of the USA is losing most of its power as a major global currency in the world. China is not very confident about US ( they hold most of the debts of the nation) printing too much of cash that is in turn reducing the significance of the dollar. It is too early to say if this is one of the prime reasons for the globe to shift to one currency. There are several economists that find a number of currencies more viable than a single currency for the benefit of the world.
4. Presently traders are able to choose the currency they wish to do trading in. This results in competition in currency. With the introduction of a single world currency there will be no competition and an effective monopoly will prevail in society. This is a major cause of concern as a small minority group will land up controlling the whole economy.