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# Should Canada promote the creation of a world currency?

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Intern
Joined: 10 Mar 2009
Posts: 2

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10 Mar 2009, 11:01
Considering how much money money brokers make as middlemen just buying and selling money but not producing anything of economic value themselves, thus essentially making themselves parasites on society, profitting from other peiole's need to buy foreign currencies by marking up the price and taking a cut for themsevles, could we not make cut this waste by creating a world currency like the EU created the euro?
VP
Joined: 28 Feb 2008
Posts: 1323
Schools: Tuck

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14 Mar 2009, 15:33
It's a little easier to create a common currency when you have an agreed set of principles on monetary policy.

RF
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VP
Joined: 09 Dec 2008
Posts: 1221
Schools: Kellogg Class of 2011

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15 Mar 2009, 03:25
nastynas wrote:
Considering how much money money brokers make as middlemen just buying and selling money but not producing anything of economic value themselves,

Shouldn't we also do away with Wal-Mart and other retailers then? All they do is buy merchandise from manufacturers and sell it to the public at a profit.

The value a broker creates is ease of access and convenience. If I travel to Canada, I can buy Canadian dollars at the airport and don't have to go get some from the central bank.
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Manager
Joined: 01 Jan 2008
Posts: 222
Schools: Booth, Stern, Haas

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15 Mar 2009, 04:02
Jerz wrote:
nastynas wrote:
Considering how much money money brokers make as middlemen just buying and selling money but not producing anything of economic value themselves,

Shouldn't we also do away with Wal-Mart and other retailers then? All they do is buy merchandise from manufacturers and sell it to the public at a profit.

The value a broker creates is ease of access and convenience. If I travel to Canada, I can buy Canadian dollars at the airport and don't have to go get some from the central bank.

the same thoughts
Joined: 26 Dec 2008
Posts: 2453
Location: Los Angeles, CA

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16 Mar 2009, 10:28
A world currency is basically the equivalent to the Gold Standard (i.e. all world currencies pegged to the price of gold, or simply using gold as currency just like the Middle Ages haha).

In theory it's possible, but individual countries then have zero control over monetary policy. This may not be an issue if each country's economy was 100% correlated (or near 100% correlation) with one another -- but it's not. Even in this worldwide recession, the impact on each country is different - some more severe than others (and also in different ways).
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Alex Chu
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Manager
Joined: 08 Mar 2009
Posts: 193

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07 Apr 2009, 15:50
I think one day we will all be using PayPal with a PayPal currency........
Joined: 26 Dec 2008
Posts: 2453
Location: Los Angeles, CA

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07 Apr 2009, 16:00
Well, given the bubble in asset prices of the past decade and a half we might as well be using Monopoly money...

Actually, from what I've read, a "world currency" is in the works at the IMF - which would be more akin to a weighted basket of currencies -- USD, Euro, Yen, and Sterling.

True to Fareed Zakaria's assertion, we are living in a post-American world.
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Alex Chu
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Re: Should Canada promote the creation of a world currency?   [#permalink] 07 Apr 2009, 16:00
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