I like the idea of local currencies. They seem to work, for a time, at the local level but there seems to be a problem of exchange once they are taken out of the local (trusted) area. arthur
________________________________ From: [EMAIL PROTECTED] on behalf of Charles Brass Sent: Thu 10/9/2008 7:56 AM To: [EMAIL PROTECTED] Subject: Re: [Futurework] Will Justin Yifu Lin be the person? Arthur You seem to consider that only global trust can be trusted. In fact, people trust those close to them more than they trust those they don't know. Hence, the push by many (including me) for a system of local currencies backing up a global currency. A local currency relies only on the trust of those who use it, and hence it hardly ever collapses. Provided the participants in such a network of local currencies could exchange them with each other as people move around (just as we now do with national currencies at every airport in the world) such a system would be much more stable than a system based on a global currency (which as we have seen is subject to abuse by the powerful) regards Charles Brass Chair futures foundation www.futuresfoundation.org.au phone: 03 9459 0244 fax: 03 9459 0344 From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED] On Behalf Of [EMAIL PROTECTED] Sent: Thursday, 9 October 2008 10:35 PM To: [EMAIL PROTECTED]; [EMAIL PROTECTED] Subject: Re: [Futurework] Will Justin Yifu Lin be the person? I don't see the advantage of having flexible McDollars. Either there is a universal currency with fixed terms, interest rates, etc. or there is an array of national currencies. Flexible McDollars means that the value inherent in the brand can't be trusted: the trust that adheres or is associated with a strong reserve currency as the pound or dollar (at least that is the way it used to be) Constructing a new universal currency seems an interesting idea, but allowing local changes to suit local conditions seems to rob the brand of its strength which in the end is : Trust and confidence. It is as though McDonald's around the world could make changes at will to suit local conditions: What then is a McDonald's? (I realize that McDonald's does make changes locally but these are well thought out and ((I would imagine)) are made in ways that don't threaten the brand.) arthur ________________________________ From: [EMAIL PROTECTED] on behalf of Keith Hudson Sent: Thu 10/9/2008 3:20 AM To: futurework Subject: Re: [Futurework] Will Justin Yifu Lin be the person? Arthur, At 11:59 08/10/2008 -0400, you wrote: Subject: RE: [Futurework] Will Justin Yifu Lin be the person? Keith, How have things worked with the Euro? My understanding is that it takes away from individual countries the power to set interest rates appropriate to economic conditions. National currencies at least offered the power to devalue, revalue, raise or lower interest rates, etc. A universal currency means that nations have to move in concert no matter conditions locally. Arthur Very true, concerning the Euro. But I'm envisaging that a future world currency would be issued by a retail universal bank, not the World Bank as presently constituted (that is, as a consortium of central banks). Let me call it a Universal Bank. It could be franchised to any retail bank, business, pension fund or individuals which/who would initially pay for the franchise in their own national currencies but then operate individually with their new currency, and setting their own interest rates according to local, regional, national circumstances. Each franchisee would sink or swim according to the skill and competence of their own organisations and the world currency would operate in the market place side by side with national currencies in a similar sort of way that the world population is becoming bilingual -- English and Another. I believe that something like a new world currency will be forced into existence because the retail banks and central banks are losing their original primacy in the scheme of things. Retail banks are no longer the main source of capital for new economically-important ideas (which need relatively large amounts of investment) and are increasingly confined to lending to individuals and existing types of local and middle-sized businesses. (Large businesses now increasingly issue bonds when they want capital.) Central banks are reaching the limits of the amount of cash they can print because (developed) governments are reaching the end of their borrowing ability -- that is, taxation powers (of both their own population and of sizeable commercial operations, legal and illegal, that operate in and out of their national boundaries). There will always be a role for retail banks and central banks (using national currencies) as we know them because of the mass of circular financial activities and economic transactions going on within a population. But there is now an increasing need for international payments systems both for individual customers (catered for at present by credit cards) on the one hand, and on the other for very large businesses which would welcome a stable currency for their international transactions without having to hedge their contracts against currency speculators. Keith Keith Hudson, 6 Upper Camden Place, Bath BA1 5HX (044 1225 311636 or 312622)
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