Keith:
> But little bit by little bit I am becoming increasingly convinced that we
> will see the emergence of a single universal currency. Whether this will
> come about via some new grouping of large companies starting an
> asset-backed bank (probably e-money via the Internet), or the sole
survivor
> of the continuing contest between the official currencies I don't know.
> Either way, there will be immense benefits to all countries, businesses
and
> organisations.
I believe we're pretty close to a single currency now. It's the Almighty US
$$. The US would never accept a currency which it does not control. The
reason that countries like Canada keep their own currency is because it
permits them some control over domestic monetary affairs, even if the
international value of their currency is determined by what happens to the
Greenback.
>
> As some FWers will know I have been a critic of official currencies
because
> they are not backed by value and can thus be be manipulated by governments
> and currency speculators. However, the criticism largely falls if there is
> a single official currency because its value would be self-correcting via
> the interest rate. I say "largely" because printed banknotes can still be
> forged (as the US$ is in vast quantities) and then laundered.
I'm not with you here Keith because I don't believe there is anything that
has absolute value. Or if there is, it's something that lies outside of the
economic sphere and perhaps in the moral one, like human life or the things
that are in the UN Charter of Human Rights (which no one pays much attention
to). National currencies have a given value as long as governments and
central banks can maintain it. When I was in Russia a few years ago the
value of the rouble had fallen from an artificially maintained approximate
parity with the US$ to virtual worthlessness. The government and the
Russian banking system had simply not done their job. Everybody wanted US$s
because their value held. What I'm saying is that it's all relative; there
are no absolutes.
Ed Weick
