One World, One Money
By Carl Teichrib, Chief Editor
Forcing Change: www.forcingchange.org.
Note: this article is a condensed version of a longer report published in the December 2007 edition of Forcing Change, which contains an expanded historical overview – including the role of Special Drawing Rights – and an examination of Global Central Bank scenarios.
“I fully support a single global currency.”
Flabbergasted, I waited for an explanation.
“That way farmers in Africa get the same pay as farmers in North America, and workers in Asia would receive the same as their counterparts in Europe and elsewhere.”
Hmmm…an interesting perspective. I asked the gentleman sitting across the lunch table; “Have you ever seriously studied banking or the historical role of money?”
His response to the negative didn’t surprise me; after all, wage equality and production values are not currency issues per se, albeit currency matters do play a role. Much of our lunch hour, therefore, was spent reviewing the relationship between money, banking, and power.
This provocative discussion, enjoyed over a steaming bowl of soup, took place at the annual meeting of a multi-million dollar Christian-based relief organization. And the person I was dining with wasn’t just an interested attendee; he was a board member representing a significant regional arm of this organization. Granted, he was only one man in a large administrative structure, but his decisions – combined with other board members – impact projects around the globe. Thus, I found his supportive statement for a world currency even more disturbing; here was an individual involved in economic decisions that impacted projects around the globe, yet he didn’t understand what he was asking for.
During the course of our lunch-hour, it was obvious that he had no conception of the incredible power-shift that would occur under such a scheme – a shift that would effectively create a global master of untouchable proportions. All he could see was an international-sized band-aid solution, “a single global currency,” to address the problem of world poverty.
I replayed this conversation after returning home, perplexed by the ease in which a person with the right motives was willing to embrace such a risky global venture. Turning to the banking and economics section of my library, I thumbed through a variety of books and documents in an attempt to wrap my mind around this thorny issue. A number of interesting quotes jumped from the pages.
All of this brings up an interesting question: Does the world need a global central bank? If you want a single world currency, it requires an international banking structure armed with a monetary policy on a planetary scale. Essentially, the requirement for a single global currency is a bank that has power over all countries, kindred, and tongues. Former Canadian Member of Parliament, Paul Hellyer, criticized this development in 1994, saying that under such a global currency/banking system “the interests of citizens, of individual countries must be subordinate…to the interests of international finance.”
Unknown to my lunchtime counterpart, the idea of a single global currency has been quietly batted around in banking and economist circles since the closing days of the Second World War. Over the years this call has increased in intensity. Consider some quotes,
In 2007, the Council on Foreign Relations propelled the idea of a planet-wide currency restructuring by publishing an article in it journal, Foreign Affairs, titled “The End of National Currency.” [Note: on the cover of this Foreign Affairs issue, the article is titled “One World, Too Many Monies.”]
Benn Steil, the Director of International Economics at the CFR, wrote that national money systems should be abandoned, “Since economic development outside the process of globalization is not longer possible…” Stated even more succinctly, “Monetary nationalism is simply incompatible with globalization.” And, “In order to globalize safely, countries should abandon monetary nationalism and abolish unwanted currencies…”
This is quite the leap. To Steil’s credit, he pinpoints the potential chink in the world economy that could lead us towards a new financial arrangement: the weakening state of the US dollar at the global level.
Over the decades, the US dollar has become the unquestionable global currency, with nations around the world required to hold American greenbacks in order to buy and sell in various international markets, especially in relationship to petroleum. Steil writes,
Recognizing the possible dollar-value scenario, Steil points to the growing concern over China and other “dollar-rich central banks.” Keep in mind, China alone holds over a trillion dollars in reserves, and rumblings from the East over liquidating US dollars have started to cause a stir.
Even though Steil doesn’t ask the question, it becomes painfully obvious: What happens if China and other nations “fear the unbearable lightness of their holdings”? What becomes of the world economy if the US dollar is rapidly dumped by central banks?
All of this underscores a strategic reality that can be summed up in three words: Crisis equals opportunity. As banking mogul A.W. Clausen once said, “new comprehensive politico-economic systems across peoples almost always arise out of conquest or common crisis…”
Robert Mundell, “the father of the euro,” and one of the world’s most respected economists, also views crisis as the starting point for change. In a May, 2007 lecture, Mundell related, “International monetary reform usual becomes possible only in response to a felt need and the threat of a global crisis.”
This Nobel Prize winner also pointed his finger to the possible trigger event, saying that the “global crisis would have to involve the dollar,” and that a world currency should be viewed as “a contingency” to a global dollar disaster.
With a similar crisis in mind, Benn Steil offers what appears to be an altruistic solution. In order to avert the crisis, all that nations need to do is relinquish sovereignty before the problem become insurmountable.
So how should monetary sovereignty by expunged? Steil candidly asserts that the world needs to re-group itself into three regional monetary units: the Dollar, the Euro, and a new Asian currency. This proposal mirrors the work of Robert Mundell, who has been traveling the globe lecturing on a new international monetary unit based on the US dollar, Euro, and Yen. Under Mundell’s plan these three currencies would form the basis of a “world currency unit” called the DEY, and the International Monetary Fund would be its manager.
The implementation of Mundell’s plan may not be too distant as major currency blocks, led by Europe’s success with the euro, are forming in different parts of the globe. South America, the South Eastern Asian nations, and Africa are all looking to create regional currency zones. The Middle East too is going down this road. In fact, in 2010, if all goes according to plan, the Gulf Cooperation Council – which is made up of a number of Middle Eastern countries, including Kuwait and Saudi Arabia – will have their own regional monetary system. And the world’s fastest growing city, Dubai, is located in a key member-nation of the GCC, the United Arab Emerites.
North America is also embracing currency integration. For years the concept of a North American monetary system has cropped up in central banking circles, with the Amero as the suggested name for the new continental currency. [See the July 2007 issue of Forcing Change for a 19-page report on this development]. And if not the Amero, then some believe the US dollar should become the tri-national staple.
In May 1999, economist Judy Shelton suggested the dollarization of North America to the US House Committee on Banking and Financial Services. Others have likewise been examining currency options for the continent, and the momentum towards a new regional economic system binding Canada, the US, and Mexico has grown in intensity.
But how do regional monetary blocks play into a Single Global Currency? Morrison Bonpasse, President of the Single Global Currency Association (SGCA), a group of economists working towards a world currency, answers that question, “The monetary unions of the twenty-first century, and those which survived the twentieth, are the milestones on the path to the future, and to the Global Monetary Union.”
Bonpasse elaborates on this point further,
Simply put, the regional model becomes the steppingstone to a one-world currency. However, the problem of nationalism prevails. Discussing this “problem,” Bonpasse writes,
To the internationalist, national sovereignty is the overriding obstacle. In order for a Global Central Bank and world currency to exist, some other political arrangements will have to be formed. Robert Mundell understood this political problem when giving a lecture in 2003 titled, “The International Monetary System and the Case for a World Currency.” His response was frank: “a global single currency could not be achieved without a global government. To enforce a single currency would involve big problems of organization.”
Already the SGCA has a date in mind: 2024. Regarding a headquarters for the Global Central Bank, Bonpasse suggests Basel, Zurich, or Geneva. “Switzerland has a reputation for sound money, and locating the GCB in Switzerland just might be the necessary incentive for that country to join the Global Monetary Union as a member.”
He’s right: it is a political question. This was evident to Richard Cooper when he brought up the idea of a global central bank and currency while at a 1984 Federal Reserve conference in Bretton Woods, New Hampshire. “The idea is so far from being politically feasible at present – in its call for a real pooling of monetary sovereignty – that it will require many years of consideration before people become accustomed to the idea.”
However, even then Cooper advanced a specific timetable to begin taking this idea seriously: “This one-currency regime is much too radical to envisage in the near future. But it is not too radical to envisage 25 years from now…”
In retrospect, Cooper’s timing appears fairly accurate: Twenty-five years after 1984 brings us to 2009, and today the idea of a single global currency is starting to gain traction through organizations like the SGCA and through major advocates such as Robert Mundell. Moreover, the Bank for International Settlements – which is viewed as the central bank for the world’s central bankers – has publicly considered the potential for a one-world currency built around regional groupings.
But will all of this “help the farmer in Africa,” or bring wage equality to the worker’s of the world?Probably not: it will, however, give unprecedented powers to an international banking cartel, the likes of which has never been seen or experienced before. As a critic of global banking once wrote, “Money is money, and banking is banking, and neither recognizes any allegiances that don’t bear compound interest.”
Carl Teichrib, a Canadian-based researcher and writer on globalization, is Chief Editor of Forcing Change – a monthly intelligence journal engaged in analyzing and documenting global economic, political, and socio-religious trends. www.forcingchange.org
 As quoted by Morrison Bonpasse, The Single Global Currency (Single Global Currency Association, 2006), p.264.