What approval would our goverment need to change our currency?

[XBoxBoy]

[quote=BGinRB]Instead of having one barrel of oil valued at $US52 we will have a barrel of oil valued at WCU33, where WCU (World Currency Unit) is a function of several currencies.[/quote]

I’m no expert, but I think there’s more to it than this. There would be no need for the governments to get involved if it was just a question of a basket of currencies being used to price things. Any oil exporter or even any two parties could make their own deal regarding payment in whatever currency (or basket of currencies) they wanted to deal in.

I think the issue is more that currently most central banks settle international liabilities in dollars, and the IMF lends and generally works in dollars. Because many central banks try to peg their currency (either firmly or loosely) to the dollar foreigners are unhappy with our government’s devaluation of the dollar. (In order to keep their currency low, they need to buy dollars and sell their own currency, something they are getting tired of doing.) Once the foreign central banks start talking about using a currency other than the dollar for settlement, that’s where the issues come in.

So, while I think you’re correct that the issue is not about replacing the dollar as the normal currency in the USA, the issue is also much more political than just what will oil or other commodities be priced in. The issue is will central banks, (including ours) be willing to settle debts in this World Currency Unit? And if so, will we allow banks to do stuff like fractional reserve lending in WCUs? If so, who controls the banks or put another way, who is in charge of monetary policy for the WCU?

XBoxBoy

edit – looks like esmith beat me to it with some of the argument – oh well….

[Arraya]

Here is the best piece on the dollar as reserve currency and how it works to give the US an artificially high standard of living. Hey, it was a nice run that was bound to end at some point. Hopefully we don’t start a war to keep getting our free lunch.

http://www.atimes.com/atimes/China_Business/JG30Cb01.html
Page 1 of 4
CHINA’S DOLLAR MILLSTONE, Part 1
Breaking free from dollar hegemony
By Henry C K Liu

The vast expansion of US-led globalized trade since the Cold War ended in 1991 had been fueled by unsustainable serial debt bubbles built on dollar hegemony, which came into existence on a global scale with the emergence of deregulated global financial markets that made cross-border flow of funds routine since the 1990s.

Dollar hegemony is a geopolitically constructed peculiarity through which critical commodities, the most notable being oil, are denominated in fiat dollars, not backed by gold or other species since then president Richard Nixon took the US dollar off gold in 1971. The recycling of petro-dollars into other dollar assets is the price the US has extracted from oil-producing countries for US tolerance of the oil-exporting cartel since 1973. After that, everyone accepts dollars because dollars can buy oil, and every

economy needs oil. Dollar hegemony separates the trade value of every currency from direct connection to the productivity of the issuing economy to link it directly to the size of dollar reserves held by the issuing central bank. Dollar hegemony enables the US to own indirectly but essentially the entire global economy by requiring its wealth to be denominated in fiat dollars that the US can print at will with little in the way of monetary penalties.

[Arraya]

Here is the best piece on the dollar as reserve currency and how it works to give the US an artificially high standard of living. Hey, it was a nice run that was bound to end at some point. Hopefully we don’t start a war to keep getting our free lunch.

http://www.atimes.com/atimes/China_Business/JG30Cb01.html
Page 1 of 4
CHINA’S DOLLAR MILLSTONE, Part 1
Breaking free from dollar hegemony
By Henry C K Liu

The vast expansion of US-led globalized trade since the Cold War ended in 1991 had been fueled by unsustainable serial debt bubbles built on dollar hegemony, which came into existence on a global scale with the emergence of deregulated global financial markets that made cross-border flow of funds routine since the 1990s.

Dollar hegemony is a geopolitically constructed peculiarity through which critical commodities, the most notable being oil, are denominated in fiat dollars, not backed by gold or other species since then president Richard Nixon took the US dollar off gold in 1971. The recycling of petro-dollars into other dollar assets is the price the US has extracted from oil-producing countries for US tolerance of the oil-exporting cartel since 1973. After that, everyone accepts dollars because dollars can buy oil, and every

economy needs oil. Dollar hegemony separates the trade value of every currency from direct connection to the productivity of the issuing economy to link it directly to the size of dollar reserves held by the issuing central bank. Dollar hegemony enables the US to own indirectly but essentially the entire global economy by requiring its wealth to be denominated in fiat dollars that the US can print at will with little in the way of monetary penalties.

[Arraya]

Here is the best piece on the dollar as reserve currency and how it works to give the US an artificially high standard of living. Hey, it was a nice run that was bound to end at some point. Hopefully we don’t start a war to keep getting our free lunch.

http://www.atimes.com/atimes/China_Business/JG30Cb01.html
Page 1 of 4
CHINA’S DOLLAR MILLSTONE, Part 1
Breaking free from dollar hegemony
By Henry C K Liu

The vast expansion of US-led globalized trade since the Cold War ended in 1991 had been fueled by unsustainable serial debt bubbles built on dollar hegemony, which came into existence on a global scale with the emergence of deregulated global financial markets that made cross-border flow of funds routine since the 1990s.

Dollar hegemony is a geopolitically constructed peculiarity through which critical commodities, the most notable being oil, are denominated in fiat dollars, not backed by gold or other species since then president Richard Nixon took the US dollar off gold in 1971. The recycling of petro-dollars into other dollar assets is the price the US has extracted from oil-producing countries for US tolerance of the oil-exporting cartel since 1973. After that, everyone accepts dollars because dollars can buy oil, and every

economy needs oil. Dollar hegemony separates the trade value of every currency from direct connection to the productivity of the issuing economy to link it directly to the size of dollar reserves held by the issuing central bank. Dollar hegemony enables the US to own indirectly but essentially the entire global economy by requiring its wealth to be denominated in fiat dollars that the US can print at will with little in the way of monetary penalties.

[Arraya]

Here is the best piece on the dollar as reserve currency and how it works to give the US an artificially high standard of living. Hey, it was a nice run that was bound to end at some point. Hopefully we don’t start a war to keep getting our free lunch.

http://www.atimes.com/atimes/China_Business/JG30Cb01.html
Page 1 of 4
CHINA’S DOLLAR MILLSTONE, Part 1
Breaking free from dollar hegemony
By Henry C K Liu

The vast expansion of US-led globalized trade since the Cold War ended in 1991 had been fueled by unsustainable serial debt bubbles built on dollar hegemony, which came into existence on a global scale with the emergence of deregulated global financial markets that made cross-border flow of funds routine since the 1990s.

Dollar hegemony is a geopolitically constructed peculiarity through which critical commodities, the most notable being oil, are denominated in fiat dollars, not backed by gold or other species since then president Richard Nixon took the US dollar off gold in 1971. The recycling of petro-dollars into other dollar assets is the price the US has extracted from oil-producing countries for US tolerance of the oil-exporting cartel since 1973. After that, everyone accepts dollars because dollars can buy oil, and every

economy needs oil. Dollar hegemony separates the trade value of every currency from direct connection to the productivity of the issuing economy to link it directly to the size of dollar reserves held by the issuing central bank. Dollar hegemony enables the US to own indirectly but essentially the entire global economy by requiring its wealth to be denominated in fiat dollars that the US can print at will with little in the way of monetary penalties.

[Arraya]

Here is the best piece on the dollar as reserve currency and how it works to give the US an artificially high standard of living. Hey, it was a nice run that was bound to end at some point. Hopefully we don’t start a war to keep getting our free lunch.

http://www.atimes.com/atimes/China_Business/JG30Cb01.html
Page 1 of 4
CHINA’S DOLLAR MILLSTONE, Part 1
Breaking free from dollar hegemony
By Henry C K Liu

The vast expansion of US-led globalized trade since the Cold War ended in 1991 had been fueled by unsustainable serial debt bubbles built on dollar hegemony, which came into existence on a global scale with the emergence of deregulated global financial markets that made cross-border flow of funds routine since the 1990s.

Dollar hegemony is a geopolitically constructed peculiarity through which critical commodities, the most notable being oil, are denominated in fiat dollars, not backed by gold or other species since then president Richard Nixon took the US dollar off gold in 1971. The recycling of petro-dollars into other dollar assets is the price the US has extracted from oil-producing countries for US tolerance of the oil-exporting cartel since 1973. After that, everyone accepts dollars because dollars can buy oil, and every

economy needs oil. Dollar hegemony separates the trade value of every currency from direct connection to the productivity of the issuing economy to link it directly to the size of dollar reserves held by the issuing central bank. Dollar hegemony enables the US to own indirectly but essentially the entire global economy by requiring its wealth to be denominated in fiat dollars that the US can print at will with little in the way of monetary penalties.

[jpinpb]

[quote=XBoxBoy]
Sure. Just close your eyes and imagine this. After four years of disastrous socialism brought to you by Obama, Bush manages to get re-elected as president.

There, bet that made you barf. Always willing to help people barf… XBoxBoy

[/quote]

XBoxBoy – yeah. That thought will make anyone puke a sack lunch. I was hoping the red pill would make it’s way out, but I think it already dissolved.

Now I have to get that thought out of my head. Just the mere mention makes me queasy.

[jpinpb]

[quote=XBoxBoy]
Sure. Just close your eyes and imagine this. After four years of disastrous socialism brought to you by Obama, Bush manages to get re-elected as president.

There, bet that made you barf. Always willing to help people barf… XBoxBoy

[/quote]

XBoxBoy – yeah. That thought will make anyone puke a sack lunch. I was hoping the red pill would make it’s way out, but I think it already dissolved.

Now I have to get that thought out of my head. Just the mere mention makes me queasy.

[jpinpb]

[quote=XBoxBoy]
Sure. Just close your eyes and imagine this. After four years of disastrous socialism brought to you by Obama, Bush manages to get re-elected as president.

There, bet that made you barf. Always willing to help people barf… XBoxBoy

[/quote]

XBoxBoy – yeah. That thought will make anyone puke a sack lunch. I was hoping the red pill would make it’s way out, but I think it already dissolved.

Now I have to get that thought out of my head. Just the mere mention makes me queasy.

[jpinpb]

[quote=XBoxBoy]
Sure. Just close your eyes and imagine this. After four years of disastrous socialism brought to you by Obama, Bush manages to get re-elected as president.

There, bet that made you barf. Always willing to help people barf… XBoxBoy

[/quote]

XBoxBoy – yeah. That thought will make anyone puke a sack lunch. I was hoping the red pill would make it’s way out, but I think it already dissolved.

Now I have to get that thought out of my head. Just the mere mention makes me queasy.

[jpinpb]

[quote=XBoxBoy]
Sure. Just close your eyes and imagine this. After four years of disastrous socialism brought to you by Obama, Bush manages to get re-elected as president.

There, bet that made you barf. Always willing to help people barf… XBoxBoy

[/quote]

XBoxBoy – yeah. That thought will make anyone puke a sack lunch. I was hoping the red pill would make it’s way out, but I think it already dissolved.

Now I have to get that thought out of my head. Just the mere mention makes me queasy.

[Diego Mamani]

[quote=esmith]Economists will fight tooth and nail against any global currency.[/quote]

Why? I’m an economist (not tied to the banking or real estate sectors) and I feel no desire to fight something that makes no sense to begin with.

BGinRB: You’re one of the few grownups in this thread! Thank you for educating the younger, more passionate Piggs, who apparently envisioned the end of national currencies. More than a unit for global trade, what is being discussed is a ‘currency’ that can be used by countries to be held as foreign reserves. (Wasn’t the SDR created for this very purpose decades ago? It just never became as ubiquitous as the greenback).

Arraya: Thank you for sharing the very lucid atimes.com article. I’ll read the rest of it.

[Diego Mamani]

[quote=esmith]Economists will fight tooth and nail against any global currency.[/quote]

Why? I’m an economist (not tied to the banking or real estate sectors) and I feel no desire to fight something that makes no sense to begin with.

BGinRB: You’re one of the few grownups in this thread! Thank you for educating the younger, more passionate Piggs, who apparently envisioned the end of national currencies. More than a unit for global trade, what is being discussed is a ‘currency’ that can be used by countries to be held as foreign reserves. (Wasn’t the SDR created for this very purpose decades ago? It just never became as ubiquitous as the greenback).

Arraya: Thank you for sharing the very lucid atimes.com article. I’ll read the rest of it.

[Diego Mamani]

[quote=esmith]Economists will fight tooth and nail against any global currency.[/quote]

Why? I’m an economist (not tied to the banking or real estate sectors) and I feel no desire to fight something that makes no sense to begin with.

BGinRB: You’re one of the few grownups in this thread! Thank you for educating the younger, more passionate Piggs, who apparently envisioned the end of national currencies. More than a unit for global trade, what is being discussed is a ‘currency’ that can be used by countries to be held as foreign reserves. (Wasn’t the SDR created for this very purpose decades ago? It just never became as ubiquitous as the greenback).

Arraya: Thank you for sharing the very lucid atimes.com article. I’ll read the rest of it.

[Diego Mamani]

[quote=esmith]Economists will fight tooth and nail against any global currency.[/quote]

Why? I’m an economist (not tied to the banking or real estate sectors) and I feel no desire to fight something that makes no sense to begin with.

BGinRB: You’re one of the few grownups in this thread! Thank you for educating the younger, more passionate Piggs, who apparently envisioned the end of national currencies. More than a unit for global trade, what is being discussed is a ‘currency’ that can be used by countries to be held as foreign reserves. (Wasn’t the SDR created for this very purpose decades ago? It just never became as ubiquitous as the greenback).

Arraya: Thank you for sharing the very lucid atimes.com article. I’ll read the rest of it.

[Author]

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