Given how well (I think) the Euro has done, I'm surprised that there hasn't been a move towards a global currency.
A large part of the value of currency is how it relates to other currency. If there is only one currency in the world you would have to have something else to compare the value to, essentially putting everyone back on the Gold standard.[/QUOTE]
*clutches his heart* Augh, please, please don't compare one currency to the Gold Standard. Although there are some similarities in terms of fiscal control (Or rather, the lack of control associated with each idea), they are two very different animals.
One world currency is essentially allowing your neighbour to set your budget. A government controls the value of their currency through the budgetary process, the purchase and sale of bonds on the open market, the bundling and purchase/sale of domestic/foreign currencies on the market and the outright printing of dollars. In a One-Currency situation, you lose control of your currency and are forced to adopt the economic policies of an outsider whose interests may be in direct opposition to your own.
I'm going to analogize this down to Halforum Street, in Halforum, Wisconsin.
On Halforum Street lives CajunGal, Dave, Chazwozel and Gasbandit. Each person person currently has a printing press in their house so that if they need more money, they can just print it off. This has the unfortunate side effect of changing the value of each currency in relation to everyone else. Because Gasbandit is irresponsible with his money, he's been printing more money off like crazy in order to buy his new guitar. These GasBandit Kronas are now worth half of what a Dave Dollar is. Dave is still operating within his income for expenses and has no need to print money off - in fact Dave Dollars have appreciated in value because Dave is making much more income than his expenses and so each neighbour buys Dave Dollars knowing that it is unlikely for the Dave Dollar to collapse any time soon. Cajungal uses her Colons to buy a lot of Dave Dollars and Chazwozel sets aside some Chazwozel Schillings to buy Dave Dollars.
Thus, in the large scheme of things, Dave Dollars are worth the most, Cajungal Colons second, Chazwozel Schillings third and Gasbandit Kronas last.
Each currency reflects the strengths and weaknesses of the holders. Dave is successful, Cajungal is playing it safe, Chazwozel is focusing on a protected market and Gasbandit is essentially Nigeria or Mexico.
If Gasbandit's country collapses under the weight of its inflation (that is, Gasbandit Kronas are now worth 1/10,000th of a Dave Dollar), there isn't a commiserate risk to Dave, Cajungal or Chazwozel that they will experience the same problem. In fact, because Gasbandit has screwed up his economy so much, Cajungal takes the chance and invests in Gasbandit knowing that while there is significant risk, she can purchase much of Gasbandit without significant impact to her own bottom line. This naturally brings up Gasbandits currency because the foreign flow of investment increases the value of the Gasbandit Krona. By exerting pressure on Gasbandit to smarten up, the currency may even recover.
This is how the world works now.
In a one world currency situation, we're all on Yen.
Dave yen is equal to Cajungal yen is equal to Chazwozel Yen is equal to Gasbandit Yen. And will always be equal.
Dave is still running a successful company and because he is the largest and oldest country, the yen grows according to his growth more than it would in comparison to Cajungal, Chazwozel or Gasbandit. The growth of the Yen means that Gasbandit begins to have problems affording basic goods because he doesn't pay his people enough, or they aren't developed enough to compete with the bigger guys. And because his currency is the same as everyone else, there's no benefit for Cajungal to invest and hope to strengthen his infrastructure. He may have to start going into debt to just stay on the same playing field as the rest.
Conversely, Cajungal, Chazwozel and Gasbandit all agree to help repay their debt by printing off more Yen. Printing off more Yen means that in an affluent country, all of a sudden it requires even more Yen to make a purchase. Now for Dave to purchase a TV it costs 50,000 Yen, versus 25,000 Yen earlier. Wages don't inflate as quickly as prices so Dave's economy takes a dive to pay for Cajungal, Chazwozel and Gasbandit's spending.
On the Gold Standard, whoever holds the most gold wins. It comes down to whose house is built on the largest gold nugget. Cajungal had the largest lot size and had the largest amount of gold to mine. She mines it up, and then puts it in a safe. Dave had no gold so he dies. Chazwozel marries Gasbandit and creates the United States of Gaswozel, but Gasbandit supports slavery and Chazwozel supports gay marriage so this union is turbulent until eventually Chazwozel in a drunken rage drives his car through the center of the house.
