Robert Mundell: New Global Currency May Save The World

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posted on Feb, 8 2013 @ 05:06 PM
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Foreign exchange market


The future of the global financial system seems to be unclear. Most economies around the globe are currently suffering from multiple shocks, which may result in a doomsday scenario.

What can happen to the global financial system? Is there a way out of the crisis? Robert Mundell, is a Nobel Prize-winning Canadian economist, seems to have found a solution.

Central banks around the globe keep cut interest rates down to record-low levels while expanding their money supplies through continuous money printing. While the aftershocks in the form of major inflation aren’t still there, most financiers are convinced that it is high time to create a whole new global financial system until it is not too late.

As for Robert Mundell, he believes that in order to start something new, first it is vital to learn a lesson from the past.

The development and evolution of a global financial system is a complicated and controversial process, Mr. Mundell reminds. The Bretton Woods system should have resolved the issue as at that time all the currencies was pegged to gold and could be converted to it. However, the system collapsed in the 1970s, a couple of decades after it was created. The Bretton Woods system was followed by a system of floating exchange rates, which is determined by the market.

At this point, economists around the globe are trying to make exchange rates more controllable. Still, the existing system cannot work properly all the time. The IMF’s supervision system has failed to take the situation under control. Therefore, there is still an urgent need in tough fiscal coordination.

As there is still no unified global currency system, the issue is especially burning these days amid global economic weakness and uncertainty. Even under the Gold Standard, there was no currency exchange coordination. After World War I, most countries faced hyperinflation as the result of excessive money printing.



As the Euro, the Japanese Yen, the US Dollar and other major currencies are suffering from multiple problems, it is time to think about alternatives. Another attempt to create a stable global financial system based on multiple currencies will most likely fail again.

Mr. Mundell is convinced that a new currency should belong to the entire world instead of a single superpower like the USA.

The new currency may be virtual and based on other major currencies. It should be easily convertible. Mr. Mundell conventionally called it the “device”.

Moreover, it is necessary to determine the central bank and the emitter of the new currency. Still, the “device” plan may fail due to possible financial disintegration.

Robert Mundell says that the probability of creating such a currency within the next 5 years is only 30%. He also concedes that Asia may create a common Asian currency within the next couple of years.


Mundell proposes a 'virtual' global currency to save the world from the growing currency wars that are spreading across the planet. He even gives the proposed currency a name calling it a 'device'.

It's kind of logical as it is eerie that we have been reading for a number of years that a global currency would feature as part of a new global economy following an economic collapse and introduction of a new world order as the theory suggests.

Yet the world financial system does appear to be unraveling with the final outcome yet uncertain though doesn't look like there will be any return to a functioning system in its current state. Thus tear down this failed ponzi financial system and reset with a new - almost appears inevitable if not a planned outcome by globalist stakeholders.




posted on Feb, 8 2013 @ 05:10 PM
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I'm not an economist but isn't the Euro having significant problems itself which would make the idea of one global currency pretty much a ridiculous notion.

I mean if one small part of the world can't even handle the same currency how are you going to make one work for the entire world.



posted on Feb, 8 2013 @ 05:18 PM
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Originally posted by Spookycolt
I'm not an economist but isn't the Euro having significant problems itself which would make the idea of one global currency pretty much a ridiculous notion.

I mean if one small part of the world can't even handle the same currency how are you going to make one work for the entire world.


Yes well apparently Euro constraints are compounded by the absence of a Euro government. That's why there were suggestions for a European federation much like the federation of the States of America under a federal government.

Having learned this valuable lesson from the Euro, a global economy and currency will be fitted out with a global government, a world federation of sorts.



posted on Feb, 8 2013 @ 05:25 PM
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I`ve said it before and I still think they are purposely crashing the world economy so that they can usher in a world currency that they will claim will be more stable and less susceptible to large fluctuations.
They will claim that since the new currency will be backed by the economies and GDP of all the nations that it will maintain it`s value even if some nations see a drop in their economies and GDP.
before they bring forth the new world currency they have to destroy the value of all the major currencies now being used and create a world wide depression.after losing everything they have worked for and being thrown into the worst financial depression the world has ever experienced,people will welcome a world currency that will in theory be more stable.

The exchange rate of the current and soon to be worthless currencies will have a very high exchange rate 100:1 or greater, that`s why the rich people have been pillaging the economy and hoarding billions of dollars in personal wealth to exchange at 100;1 for world currency.
after exchanging their dollars, pounds, yen etc for the new world currency they will still be massively wealthy compared to most of us.
edit on 8-2-2013 by Tardacus because: (no reason given)
edit on 8-2-2013 by Tardacus because: (no reason given)



posted on Feb, 8 2013 @ 05:28 PM
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this would require enemies and rivals to play nice

that might happen in sci fi movies, but not here



posted on Feb, 8 2013 @ 05:31 PM
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reply to post by surrealist
 


Yes but a global government is not sustainable.

Its been tried and failed miserably, Rome, Ghengis Khan, Charlamagne, none of them could maintain a one rule over that amount of people.

Too many different views, ideologies, religions.......you cannot possibly make one set of rules for so many different cultures without the system cracking and eventually breaking at the seams and there is no way to create a security force large enough to enforce your policies.

Just simply not possible to have a global government.
edit on 8-2-2013 by Spookycolt because: (no reason given)



posted on Feb, 8 2013 @ 05:37 PM
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they will make it cashless and say it will stop crime and tax fraud.
Problem is if you dont obey the PTB they can remove your "electronic finances", on a global scale.
Humanity becomes sheep



posted on Feb, 8 2013 @ 05:38 PM
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I've got a better idea, let's get rid of bankers. They contribute nothing of benefit to society and are one of the primary sources of greed and corruption. Of course by doing this, we'd have to create a new currency since the one we use now was created so that the bankers can manipulate as they see fit.



posted on Feb, 8 2013 @ 05:42 PM
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reply to post by surrealist
 


i agree that a global currency for trade is a good idea. I also think he is right that we have to learn our lessons. The lesson to be learned is that you go broke when you abuse your corporate power. When is Murdoch going to learn his proper lessons? I would only be in favor of a global currency if people that are currently in power have nothing to do with it. The have failed all of us for a long time.

edit on 8-2-2013 by sligtlyskeptical because: (no reason given)



posted on Feb, 8 2013 @ 05:56 PM
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My heart tells me a global currency only can be successful if capitalism is offically declared extinct first. If Global currency is established regardless that condition, it's will be a trick, it won't solve anything and rich people will be richer.
edit on 8-2-2013 by Trueman because: (no reason given)



posted on Feb, 8 2013 @ 06:15 PM
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Originally posted by Spookycolt
I'm not an economist but isn't the Euro having significant problems itself which would make the idea of one global currency pretty much a ridiculous notion.

I mean if one small part of the world can't even handle the same currency how are you going to make one work for the entire world.


The euro is complicated. Any of the Euro using countries can provide Euro banknotes, but the country of origin of a particular banknote is not provided on the banknote itself but is tender among all Euro participants. It is controlled by a central bank, the European Central Bank, (ECB) in Frankfurt Germany, which is fundamentally an independent structure, just like the Federal Reserve, and it does impose interest on banknotes on the individual countries that produce banknotes, presumably variable, and has accrued a substantial gold reserve, so it is not piss poor by any means, but it is pretty much a conventional method of money go round. Robert Mundel, has to be talking about something else that excludes all the rest.





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