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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