Keith, given what is currently happening to the Euro, how could anyone expect that the development of rock solid world currency would be possible. In signing onto the Euro, the countries of Europe believed that they were sufficiently economically and culturally similar to make a single currency possible without giving up many of their sovereign powers. Given what has happened to Greece, and is likely to happen in other southern European countries, it now looks as though they were wrong. A single currency, to be workable and effective, would require member countries to give up a huge chunk of their sovereign powers and their populations to undergo substantial changes in their expectations.
The countries of the EU are much more economically, culturally and politically similar than the dominant and emerging global economic powers. Could you really expect the US, Brazil, Russia, India and China to give up the huge chunk of sovereign power that would be needed to make a single global currency work? I don't think so. Ed ----- Original Message ----- From: Keith Hudson To: Keith Hudson Sent: Thursday, May 20, 2010 4:33 AM Subject: Good housekeeping out of chaos? Dear Short List, The financial markets panicked on Monday after the Sunday meeting of European finance ministers (and some prime ministers) and their trillion Euro "rescue". The markets panicked again yesterday, after the decision of the German financial regulators to ban short selling of European bonds. European finance ministers (this time with more prime ministers no doubt) are due to meet tomorrow (though with several one-to-ones today one gathers). It's looking to me that there'll be a panic after this one also. And, if the panic gathers pace over the week-end (as the first one did a week ago) then there could well be yet another Sunday meeting reaching into the small hours. If Greece can't be rescued for good and all this time, then it very much looks as though it will have to be released from the European Monetary Union -- with more countries to follow inevitably. If the two chief players of the EMU -- Germany and France -- continue to scrap as they have been doing for the past week then it looks as though the EMU is going to crumble. There's already talk of Germany forming a mini-EMU with some Benelux countries. Chaos? Yes, there would be chaos as national currencies are hastily pulled out of storage and reinstituted. But it might be considerably less than the chaos that is now going on between the US dollar and the EMU euro, the two chief currencies of the world. If the present chaos continues then there can be only one outcome, and that is a deepening of the present credit crunch. If that happens then perhaps America and Europe will be finally forced to the negotiating table by China, India, Brazil, Russia and Middle East countries which say that we need a rock solid world currency. National currencies can then truly measure themselves and governments finally forced into good housekeeping instead of becoming increasingly in debt. Keith Keith Hudson, Saltford, England
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