Would a single global currency have helped cool the meltdown?
Recently, I asked the president of the Single Global Currency Association, Morrison Bonpasse, about his take on the current worldwide economic problems.
Here's what Bonpasse had to say:
Theodore F. di Stefano: To what extent do you attribute today's economic problems to the lack of a single global currency?
Morrison Bonpasse: The global economy depends upon trust, confidence and the expectation that risks are measurable and manageable. In today's multi-currency world, there is significant currency risk, especially for those currencies managed by single nations where national economic goals obscure the need for monetary stability. As the global financial turmoil spread in 2008, Iceland's currency collapsed and required IMF (International Monetary Fund) assistance. Other countries, including Hungary and Poland, also required IMF assistance. For those countries, the common assessment was that belonging to the Eurozone would have avoided the currency risk and the resulting substantial hardship within each nation.
Similarly, if the world had already implemented a single global currency by 2008, there would have been zero currency risk, worldwide. There still could have been housing and stock market bubbles, but there would have been no currency risk, and therefore the current global financial turmoil would have been reduced.