The Idea Of A Global Currency Rears Its Ugly Head Again
And yes, it would seem that the idea of a world currency has popped up yet again. It probably isn’t surprising that it should keep coming up as a worthwhile topic for discussion during present times. After all, so many foreign currencies are struggling in the recession and failing to produce impressive figures on the currency converter. How on earth could a single currency be any worse?
The latest news is that China wants to get a global currency up and running. But if you read this report from the Baltimore Sun – you will see that there is a lot more to this than meets the eye.
As is usual with this kind of story, it’s good to see how the two currencies involved are performing against one another at present. In this case of course we’re looking at the Chinese yuan versus the US dollar.
But if we normally expect to see big changes coming to light on the currency converter, that isn’t panning out to be the case at the moment. Back on the 14th September the yuan was bringing home 0.146436 US dollars. We have to look at this many figures because if we only looked at the first four it would be days if not weeks before we saw any change at all. Such is the state of play between these two at the moment.
After peaking at 0.146489 three days later the Chinese yuan ended the week down slightly on 0.146458. The following week was a bit of an up and down affair, with an immediate change to 0.146436 on the Monday evening. After that we had two days of the Chinese yuan improving its position against the US dollar, and finishing on 0.146497 by Wednesday night. But once again it had dropped down towards the end of the week, finishing on 0.146451 to close it out.
Towards the end of September and into October there was very little difference at all to the exchange rates between these two. It was pegged at 0.146492 for pretty much all of that period of time, and the first change came on the 5th October – a Monday – when the yuan changed ever so slightly to be worth 0.146493 US dollars.
It then enjoyed a jump up to 0.146507 by the close of the week, so after what appeared to be a prolonged period of stalemate, the yuan was definitely showing a little more strength than the US dollar.
The following week beginning the 12th October saw the yuan climb to 0.146554, but at the time of writing the final figure of the moment was slightly lower on 0.146488.
So you can see this isn’t exactly a huge up and down affair. The reasons why China wants some changes that will affect the US dollar go much deeper than that.
It isn’t likely to happen in the near future though, so anyone with an aversion to having one single currency should rest easy in their beds. Even if it was brought in there would be so much planning, bureaucracy and so on to get through that it would probably not even happen in our lifetimes. Just imagine – who would get to be in charge of the currency? Who would it ‘belong’ to? Who would manage it centrally? Those questions alone would keep politicians tied up and arguing for years at a time.
And of course the whole Forex market and the chance to make money from money would disappear along with it. There is a possibility that a global currency could operate alongside all our existing ones, but then what would be the point?
This is precisely why a global currency would appear to be so far off on the horizon that no one will ever successfully get one going. Perhaps in a couple of hundred years when there is no such thing as paper money anymore, we’ll be able to make it work. Until then, there seems to be little hope in the immediate future - no matter how many countries like China might want it to happen.
