While a world currency may be a good idea in theory–it will eliminate the exchange rate risk–I don’t think that it is feasible because it seems cumbersome in nature. For the entire world to have a single currency, there needs to be a central bank that will manage the global interest rates via operations similar to the tasks of the current Federal Reserve System. There is a lot of pride in place here. For a central bank (i.e. Federal Reserve, European Central Bank, etc.) to be “overrun” by a higher authority will almost be a slap in the face because of the pride that is at stake for each central bank system. In addition, this concept could be viewed as a collective action problem. Eliminating exchange rate risk would benefit the good of society, but each central bank system would look out for its own self-interest, which would mean ensuring that it doesn’t sacrifice its pride and authority.
April 25, 2007 at 3:08 am |
One question to think about is how likely it is that the US would submit to a World Central Bank when we won’t even let the UN do anything without our stamp of approval?
Are we simply incappable of cooperation?
August 29, 2008 at 1:39 pm |
I will have to agree with catherine. The world that we live in today isent able to cooperate with anyone. It’s hard enough trying to get a president that everyone will wont, so even looking at a thing like a World Central Bank isent even possible. One of the down sides to this idea is, lets just say, that like a normal bank would go….if someone were to rob that paticular bank? What would the people of the world do if one paticular person got away with all the worlds money? An idea that I have had inmind, even though I dout it may work because of dicooperative people, is to just do away with ALL money around the world. What is the point of money, and wouldent it be easyer to just go back to trading with people around the world? Like for example, we tell all the people over in Irac or Iran that we will withdraw everything even remotely American from there country, and in return they give us all the oil we need. Basicaly the idea that I am trying to prapose is that we all get rid of money and go back to the “You scratch my back, all scratch yours” idea. This idea alone can bring world peace, end world hunger, and even stop the destruction of the forests around the world because of the paper we need for money. As one of my teachers in my highschool science class once told me, “When the last fish is cought, when the last animal is kill, and when the last tree is cut, the world will relize, we cannont eat money.” If you would like to comment me on my thoughts, or would just like to ask me more of my statements, email me at Guthriecar@gmail.com. Thank you.