Advent of One World Currency?

Posted: 2009/07/17 in Economy
Tags: , , ,

Money  embodies an indissoluble bond of both dreams and reality and the abstract distributor of hope; a concrete means of controlling the lives of human beings and nations: From King Croesus in the Near East; Alexander the Great´s a single monetary system implementation in Greece, Asia Minor, Syria, Egypt, Babylonia and beyond, which was well organised into three metals (gold, silver and bronze) with coins of identical weight and type for people who were very different from one another, unification of Roman territories´systematic, profound well-organised central power control issuing denarii, aurei and sestertia in every corner of the vast Empire (Europe, Asia and Africa); Constantine´s Byzantine gold coins and under the Carolingian Empire, the European continent relaunch of a high Medieval European “single currency”, as we would label it today: the silver denier.

However, things changed as the geographical discoveries of the 15th century, influx of a large amount of precious metals to Europe, the opening of new mines, and more rational, modern exploitation of ancient metal veins, would soon lead to the radical transformation of the social and political fabric of Europe, whose financial and market centers attempted by all means possible to withstand the weight of competition that was increasingly tougher to face. To counter the lack of coins, existing credit systems were refined. Soon, bills of exchange became a safer instrument for bankers and merchants of the time. 

The world had changed dramatically issuance of the ducats by Italian cities (Florins, Genoese and gold zecchino coins, the undisputed lords of international trade). Charles V, produced a French gold currency, the écu au soleil or “Sun above the crown” during his reign. Consequently, seven nations united in an agreement of sorts which led them to issue “scudo” coins whose weight and alloy were very similar: France, Spain, Genoa, Venice, Florence, Rome and Naples. In essence, this heralded the first single international currency of the modern age. 

More than two centuries later, France again gave birth to a new currency, the Franco-Lira, with a centesimal subdivision, that would radically alter the monetary systems of the countries across Europe. From 1861 on, the Lira (divided into 100 cents) became the single currency of a unified Italy. Just a few years later, at a memorable session held on 23rd December 1865 in Paris, Italy, France, Switzerland and Belgium (later joined by Greece) signed an agreement which foresaw the adoption of a single currency, based on gold and silver divisions, which could circulate freely in the signatory countries, known as the Latin Monetary Union

This was considered to be the first step towards simplifying means of payment, something which could be delayed no longer in a world that was bound increasingly by common economic and trade interests. 

In 1871, the Confederation of Germanic States adopted the gold standard for its own monetary system. In 1873, Denmark signed a monetary agreement with Sweden which would later include Norway (in 1875). In 1892, Austria and Hungary also adopted a gold-standard monetary system.

Nonetheless, this too was abandoned in the 1930’s and 1940’s by all signatory countries: France, Belgium, the Netherlands, Switzerland, Poland and Italy, known as the “gold bar” countries. 

What modern nation states required was a new platform for exchange that respected national sovereignty. For today’s Europe, this platform is the Euro. 

History seems to repeat itself.

During the G8 meeting, Russian President Dmitry Medvedev illustrated his call for a supranational currency to replace the dollar by pulling from his pocket a sample coin of a ‘united future world currency.’ According to the Bloomberg news service

Medvedev has repeatedly called for creating a mix of regional reserve currencies as part of the drive to address the global financial crisis, while questioning the U.S. dollar’s future as a global reserve currency. Russia’s proposals for the G-20 meeting in London in April included the creation of a supranational currency.

Will the utopia of a universal currency become reality? Certainly, the world is much more accepting of this due to its regional cooperation. I still have not formed my opinion on this and while I can see its advantages economically, it also poses a big haul in how we conduct our financial systems. I am not sure if I want a supranatural currency, but I would seriously consider having other global reserve currencies other than the US dollar for global economic stability.


Tell me your thoughts!

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s