Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Investing in the METAVERSE Stocks Universe - 8th Dec 21
Stock Market Sentiment Speaks: I Expect 15-20% Returns For 2022 - 8th Dec 21
US Dollar Still Has the Green Light - 8th Dec 21
Stock Market Topping Process Roadmap - 8th Dec 21
The Lithium Breakthrough That Could Transform The Mining Industry - 8th Dec 21
VR and Gaming Becomes the Metaverse - 7th Dec 21
How to Read Your Smart Meter - Economy 7, Day and Night Rate Readings SMETS2 EDF - 7th Dec 21
For Profit or for Loss: 4 Tips for Selling ASX Shares - 7th Dec 21
INTEL Bargain Teck Stocks Trading at 15.5% Discount Sale - 7th Dec 21
US Bonds Yield Curve is not currently an inflationist’s friend - 7th Dec 21
Omicron COVID Variant-Possible Strong Stock Market INDU & TRAN Rally - 7th Dec 21
The New Tech That Could Take Tesla To $2 Trillion - 7th Dec 21
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Lack of a Credible Alternative Global Currency to the U.S. Dollar

Currencies / Fiat Currency May 23, 2009 - 03:21 AM GMT

By: Pravda

Currencies

A crisis is not a good time for seeking alternatives to the US dollar. Most likely, the dreams about new regional currencies will be put aside. The countries, which originally supported those ideas, gradually change their minds. The United Arab Emirates refused to participate in the Arab currency union. The expansion of the euro zone is not likely to happen in the nearest future. The Russian ruble is no longer ambitious either.


The subject of new alternative reserve currencies appeared when the crisis was gathering pace. Numerous publications reported about the possible introduction of the new currency in North America, the Amero. The Russian government put forward the idea to make the Russian ruble become a regional reserve currency too.

It seems that the subject of new currencies has been pushed into the background now. Many experts said that it would be extremely difficult and even impossible to launch such massive projects during the time of the crisis.

Official spokespeople for the foreign ministry of United Arab Emirates stated Wednesday that the nation would not be a part of the currency union in the Gulf, RIA Novosti news agency reports.

The decision to establish the Arab currency zone was made several years ago by Saudi Arabia, the United Arab Emirates, Kuwait, Bahrain, Qatar and Oman. Oman has already pulled out from the agreement. The UAE’s refusal to participate in the currency union of the Persian Gulf weakens the monetary unity of the Arab countries of the region.

The decision is based on purely economic reasons for there are no political differences between the countries. The refusal to take part in the union is most likely connected with the economic crisis. It is worthy of note that many key issues – the budget deficit restriction, the inflation rate and many other macroeconomic indexes - remain unsolved.

The euro, for example, retains its current position owing to the fiscal discipline of the members of the European monetary union. The countries of the euro zone observe the stability and development agreement, which restricts budget deficits (three percent of the GDP is the maximum) and sovereign debts (60 percent of the GDP) of the members of the currency bloc. That is why the present members of the euro zone were highly skeptical about the expansion of the European Union under the conditions of the crisis.

The euro was introduced to simplify the turnover of commodities between the European states: together these countries make a self-sufficient region. Unlike Europe, the Arab states are focused on the export of their products to the West and to Asia. Therefore, the introduction of the joint currency may not produce the desired effect.

Darya Yurischeva
Bigness.Ru

Pravda.ru

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Pravda Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Morrison Bonpasse
23 May 09, 10:00
Time to Research and Plan for a Single Global Currency

The world has changed a lot since the U.S. Dollar became the global reserve currency, and now is the time to plan for a Single Global Currency, managed by a Global Central Bank within a Global Monetary Union. Such a Single Global Currency will provide what the people of the world

want - stable money.

The success of the euro has shown the benefits of monetary union, but the primary problem for the euro and every regional monetary union today is that they must still exist in the multicurrency world where the value of its currency will fluctuate against other currencies.

If 16 countries can use the same currency, why not the 192 U.N. members? Those 192 countries now use 141 currencies and the number is dropping annually. The euro is definitely a harbinger of the future, and soon all 25 EU members will be part of the EMU, and by then, there will be more EU members to add. Several of the remaining non-euro EU members are now seeking admission as soon as possible. The IMF has even urged several EU members to "euroize" even before completing the standard accession

process.

In addition to eliminating currency fluctuations, the use of a Single Global Currency would eliminate the current foreign exchange trading expense of $400 billion annually, eliminate currency risk, eliminate current account imbalances, eliminate the need for foreign exchange

reserves (now totaling more than $6 trillion); and bring other benefits worth trillions, such as reducing the impact of global financial turmoil such as we are now experiencing.

The Single Global Currency Assn. (www.singleglobalcurrency.org)

promotes the implementation of a Single Global Currency by 2024, the 80th anniversary of the 1944 conference. That’s only 15 years away.

The world is moving toward a Single Global Currency through the creation, expansion and merger of regional monetary unions. Another route is through international monetary conferences proposals and agreements, such as were seen at Bretton Woods. The merger of the eurozone with one or two other currencies is one possible route to a

Single Global Currency.

The next major realignment of the world's major currencies should be to a common currency managed by a monetary union central bank. When such

a currency supports countries with 40-50% of the world's GDP, that currency will become the defacto Single Global Currency, and the "tipping point" momentum will favor its continued growth, until it supports all the countries of the world.

The challenge now is to reach that goal deliberately, as soon as possible, with as little cost and as few crises as possible. If the eurozone were to merge with the U.S. dollar of the yen, or if the yen and the U.S. dollar were to form a monetary union, the road to a Single

Global Currency would be clear.

The only remaining questions about implementation of a Single Global Currency are: when? and how much cost and turmoil will the world endure before that implementation.

See the book, "The Single Global Currency - Common Cents for the World."

Morrison Bonpasse

Single Global Currency Assn.

Newcastle, Maine, United States


Post Comment

Only logged in users are allowed to post comments. Register/ Log in