Things That Make You Go Hmmm - Such As A "Common Currency"

Tyler Durden's picture

Grant Williams welcomes in the new year with the following biopic on the 10 year anniversary of the Euro:

Well, it was touch and go for a while, but here we are: January, 2012. The 10th anniversary of the euro!!!!!

Well..... that’s actually not STRICTLY true. In fact, the euro debuted as a financial unit three years prior, on January 4th 1999, but only in  corporate and investment markets.

Initially, there were eleven EU nations that adopted the currency at launch (for those of you keeping score at home they were Austria, Belgium, Finland, France, Germany, Italy, Luxembourg, the Netherlands and the future PIIGS Ireland, Portugal and Spain). In all, about 290 million people were suddenly represented by a new unit of exchange designed to increase European integration and economic growth.

The euro got off to a flying start - closing its first day of trading at a healthy-looking 1.17 to the dollar (a level it may well soon recapture if recent days are anything to go by) - and looked set to become a serious competitor to the big name wrapper in the world of fiat currency - The Ubiquitous U-S-D.

Three years later - and ten years ago this week - the euro proper became legal tender as banknotes denominated in euro went into circulation across the continent, replacing the Austrian schilling, Belgian franc, Finnish markka, French franc, German mark, Italian lira, Irish punt, Luxembourg  ranc, Netherlands guilder, Portugal escudo and Spanish peseta. The UK, Sweden and Denmark all decided NOT to join the party after fierce debates in their respective Parliaments which have now cemented some political legacies and irreparably damaged others.

Currently, aside from the 17 members of the Eurozone who have fully adopted the euro (and by now, like the regulars at Cheers, everybody knows their names), Montenegro and Kosovo and several European micro states (Andorra, Monaco, San Marino and the Vatican City) as well as in three overseas territories of EU states that are not themselves part of the EU (Mayotte, Saint Pierre and Miquelon and Akrotiri and Dhekelia) have, in their collective wisdom, decided to adopt the euro and lash themselves to the deck of the SS Eurozone. Together this direct usage of the euro outside the EU affects over 3 million people.

But it doesn’t finish there. Oh no. Not by a long chalk.

Cuba, North Korea and Syria all actively use the euro as a trading currency while, outside the Eurozone proper, a further 23 countries have direct pegs to the euro as a result of previous pegs to either the French franc, Deutsche mark or Portuguese escudo. In addition, Bulgaria, Denmark, Lithuania and Latvia also have opted to institute euro-pegs of one form or another. Collectively, this means that the currency currently walking a very thin line between love and fate is officially used by 350 million Europeans, an additional 150 million people in Africa and a further 25 million people in various territories and, last but definitely not least, a further 500,000 poor souls on various Pacific Islands.

The chart on the next page gives an idea of the coverage of the Euro (including external pegs) and, though the detail required to be able to see the myriad tiny territories that are tied in some way to the euro is unavailable at this resolution, trust me - they are there.

Not since the reign of Charlemagne in the 9th century had Europe been united (almost) under a common currency - although back then, The King Of The Franks had to unite Europe under a slightly more aggressive banner as he expanded the Frankish kingdom into an empire that, after his conquest of Italy, incorporated most of Western Europe. Charlemagne was crowned Imperator Augustus by Pope Leo III on December 25, 800.

Charlemagne’s rule over Europe is associated with the Carolingian Renaissance and, in fact, the French and German monarchies descending from the empire ruled by Charlemagne as Holy Roman Emperor cover most of Europe. In his acceptance speech of the Charlemagne Prize Pope John Paul II referred to him as the Pater Europae (“father of Europe”): his empire united most of Western Europe for the first time since the Romans, and the Carolingian renaissance encouraged the formation of a common European identity.

As you can see from the map of the Frankish Empire on the previous page, a similarly -shaped ‘core’ was at its heart.

It was all so easy back then. If the peripheral countries of your alliance don’t behave themselves, simply dispatch an army.

Charlemagne presided over the creation of Europe’s first ‘common currency’ - the denier - and, though its introduction was somewhat less of a negotiation than that of the euro, a look at the history surrounding its birth proves that, while things change, they stay the same in many ways:

(Wikipedia): Charlemagne had an important role in determining the immediate economic future of Europe. Pursuing his father’s reforms,  Charlemagne abolished the monetary system based on the gold sou, and he and the Anglo-Saxon King Offa of Mercia took up the system set in place by Pippin. There were strong pragmatic reasons for this abandonment of a gold standard, notably a shortage of gold itself, which was a direct consequence of the conclusion of peace with Byzantium, which resulted in the ceding of Venice and Sicily and the loss of their trade routes to Africa and to the East. This standardisation also had the effect of economically harmonising and unifying the complex array of currencies which had been in use at the commencement of his reign, thus simplifying trade and commerce.

He established a new standard, the livre carolinienne (from the Latin libra, the modern pound), which was based upon a pound of silver—a unit of both money and weight—which was worth 20 sous (from the Latin solidus [which was primarily an accounting device and never actually minted], the modern shilling) or 240 deniers (from the Latin denarius, the modern penny). During this period, the livre and the sou were counting units; only the denier was a coin of the realm.

Charlemagne instituted principles for accounting practice by means of the Capitulare de villis of 802, which laid down strict rules for the way in which incomes and expenses were to be recorded...

In addition to this macro-oriented reform of the economy of his empire, Charlemagne also performed a significant number of microeconomic reforms, such as direct control of prices and levies on certain goods and commodities.

Charlemagne applied the system to much of the European continent, and Offa’s standard was voluntarily adopted by much of England. After Charlemagne’s death, continental coinage degraded, and most of Europe resorted to using the continued high-quality English coin until about  1100.

Ring any bells?

A gold standard, abandoned mostly due to a shortfall in the amount of the metal required to back the monetary system? A common bloc designed to simplify trade and commerce? Macro-economic reform of the union from the centre? Voluntary adoption by England who was not part of the union?

Ah, well almost.

Anyway, my point is this: In the mid-700s it probably seemed inconceivable that Europe would be united under a common ruler, much less a common currency and, by the mid-800s, it probably seemed equally inconceivable that such a union could split asunder - but such is the nature of unions (and currency blocs for that matter). As the individual members undergo the individual stresses associated with running individual and idiosyncratic economies under a common banner, it is inevitable that there will be periods when maintaining the status quo becomes impossible.

It was true of Europe in 800 - it holds true today.

Read the full letter here.

 

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Muddy1's picture

See who is really funding Romney (and all of the other candidates) at:

 

http://www.opensecrets.org/pres12/contrib.php?id=N00000286&cycle=2012

 

8 of the top 10, and 13 of the top 20 Romney supporters are the banksters.

holdbuysell's picture

If you look at who the top contributors are for Ron Paul, you'll see the US armed force branches.

But...but...didn't Ron Paul want to downsize the military and bring all the troops home?

Maybe they're sick of fighting bullshit wars for the status quo as well.

http://www.opensecrets.org/pres12/contriball.php?cycle=2012

 

TruthInSunshine's picture

I was very late to the other Ron Paul discussion, but will seize this opportunity to agree with you based on what I posted in what's now an old(er) thread:

"First they ignore you, then they laugh at you, then they fight you, and then you win, bitchez."

-- Mohandas Karamchand Gandhi

 

It would apppear they're about to "fight" Ron Paul.

Bring it on, MSM Lame Ass Stream Proxy Pundits & Bitchez doing the bidding of their 6 (count them -  6 corporations own all U.S. media outlets, whether network, cable, newspaper, magazine, radio or otherwise) corporate masters who feed off the teet of the fractional reserve banking Ponzi.

Ron Paul has broken through to the rank and file of U.S. Military Members who have grown tired of being deployed 5, 10 or 15 times, slaves to the establishment, parted from their families, to fight for many interests that actually go against their own interests & those of their children, families & communities (I'm not saying that this is always the case, but I am saying it is often, and may actually be more often than not, the case), and they grow especially sickened when they see private mercs making 10 times (tax free) what they do, working for a large 'security contracting firm' that won a no-bid (of de facto no-bid) multibillion dollar 'security contract' (the new, richly paid Hessians of our times), getting better equipment, support and rewards all around than they do, as they're fed bullshit about the 'mission' they're on, which is often bred from a morally damned black hole.

'War is a Racket' by United States Marine Corps Major General Smedley Butler

The Crony Capitalistic Kleptocracy, on whose behalf nearly all wars are initiated, has ticker tape parades for veterans half blown apart on the battlefields, deems them heroes for a day in some small city or village, with a local reporter from some small town rag covering the beat, and then they toss them into the refuge pile, with some pills to dull them to their new reality, broken, muffled and without redress, for the rest of their lives, because after all, they're just grist for the immoral mill when the truth is told, and people dare to call a spade a spade.

The Greatest Speech Ever Made

*p.s. - Keep cutting out the live sat feeds of active duty soldiers, freshly back from the sandbox, speaking out emphatically in support of Ron Paul, CNN, visibly laughable parody of a 'news network' that you are.

infinity8's picture

But, CNN has their "Truth Squad" on it. . . vomit.

Oh regional Indian's picture

Interesting, so ZH is going to become a Ron Paul echo chamber till election season? Wow. Looks like we're going to get polarized!!! 

But what an awesome article, history.

Unified currency in diversified populations CANNOT work. Unless you are being ruled. By a single emperor. Whow would not hesitate to say Off with his head. Interestingly enough, the EU populations buying the great Euro lie wrote their hell knell, so that we could reach this time, where Europe looks like it's going to be in flames through austerity or just their lingual and cultural differences that have been melded into the current borderless madness.

Oh and by the way, while all eyes are on Germany, watch Italy rise (not italians, Italy) again.

Do re Me Fascist.

ori

my/truth/

 

TruthInSunshine's picture

All I know about Ron Paul is that he's the only politician who consistently and nearly without exception says things that I agree with - since I've paid attention to what he says, some years ago.

Maybe he's secretly an extraterrestrial who eats catalytic converters and molts twice yearly, according to others, and if they're correct, my bad.

I can only make judgements on a relative basis, and he's golden by that standard.

bernorange's picture

Perhaps Regional Indian isn't aware that the discussion of monetary policy is central to the Ron Paul political ethos.  With regards to the OP, I would like to see more discussion of Ron Paul's HR 1098: Free Competition in Currencies idea.  Not as rigid a classic gold standard, but with most of the benefits I think.

He_Who Carried The Sun's picture

Mymy

 

"Charlemagne presided over the creation of Europe’s first ‘common currency’ - the denier"...

Just plainly wrong... It was Augustus who "presided" over the first truly European currency and it worked rather well for almost 300 years... ;-)

Apparently your college wasn't worth the money your parents spent?

AndrewCostello's picture

Um,  didn't Augustus try to force Roman currency on Europe, in a completely unsuccessful attempt?

 

 

Anyway, read:

http://www.amazon.com/Simple-Wealth-Mr-Andrew-Costello/dp/1463523017/ref

 

Great book.

ArgentoFisico's picture

Europe's first common curreny were silve DENARIUS and copper SESTERZIUS.

Then the golden venician ZECCHINO and later the silver THALER ... and for something like 2 millenniums LATIN was the common language... like when you say "let's get PHISICAL"

He_Who Carried The Sun's picture

Njet! Augustus was not successful in establishing Roman rule east of the river Rhine, but one currency they had and it worked as they were politically united as well, a thing Germany and France could not establish... yet...

earleflorida's picture

"Charlemagne [Charles the Great] 742-814" -

King of the Franks, conqueror of Saxony, founder of the Holy Roman [800-Pope Leo III] Empire --- his father was Pepin the Short, and his grandfather was Charles Martel, the great Frankish leader whose victory in 732 at the "Battle of Tours" had thwarted an attempted Moslem conquest of France.

Pepin dies in [King of the Franks] 768,... Charles and his brother Carloman divide the Frankish Kingdom, but three years later Carloman dies in 771 leaving Charlemagne at 29 years young, the sole ruler of the Frankish Kingdom [france, belgium, austria, switzerland, holland, germany, italy, and northern spain. he succeeded in uniting most of western europe under his rule.

he lived most of his life in northern europe, particularly germany. unfortunately for Charlemagne he was way overrated. his most important achievement was probably his subjugation of Saxony, which brought that important region into the mainstream of european civilization.

after his death, two of his three sons died soon after, leaving the kingdom to fall in disarray lacking strong leadership.

totally overrated --- but still rated by historians as #97/100 of most influential persons in hiistory.

ref: "The Hundred Most Influential Persons in History" by Micheal H. Hart c.1992

Ps. I must say i like your "Outstandish" avatar :-) ?hwc

economics1996's picture

Obama fundraising link.

http://www.opensecrets.org/pres12/index.php

http://www.opensecrets.org/pres12/contrib.php?cycle=2012&id=N00009638

Hollywood and high tech.  Looks like the banksters gave up on the thug president after OWS threated the thugs with thugs.

 

toomanyfakeconservatives's picture

The military wants a legit Commander in Chief, not a Golfer in Chief...

TheGardener's picture

But a dyed-in-the-wool politician just as Adolf might grab command from the generals and send the most legitimate
and capable army of its time into the most losing battles of
all times ...

P.S. just junked myself, a newbie who still does not get it." Stupid, but appealing to lower characters : uprated!" Just as in : if they start to intellectualize , disengage and get ready to fire...! junked..!?!?!

UGrev's picture

perhaps because they are tired of fighting undeclared, unwaranted, and illegal wars? 

gee.. I didn't think it would take more than 1 neuron to put that one together.. but apparently it takes much more for some. 

Hephasteus's picture

Here's an interesting story about romney campaign finance.

http://www.youtube.com/watch?v=uBiHDClQnUA

GeneMarchbanks's picture

If you flip the o & m you get Rmoney. Republican money is fully backing Mitt. Now please refer to Mitt as 'R' money as I have not yet trademarked this simple idea.

Matt's picture

Mitt R Money? But that makes it sound like he's taking our money.

GeneMarchbanks's picture

You just blew my mind. Virtual high five.

UGrev's picture

Swapping Ron Paul letters, you get "Our Plan".. 

disabledvet's picture

Perhaps if you trademarked it as "Ourmoney"...

a growing concern's picture

One Ring to rule them all, One Ring to find them,
One Ring to bring them all and in the darkness bind them.

Or something like that.

mess nonster's picture

Iron and clay don't mix.

Ghordius's picture

Ah, now Charlemain is trotted out - without mentioning that his banner was that or a New or Second Roman Empire, i.e. he "recollected" the old parts of an older system with lots of people cheering him into it...

Since Greece is (against my expectations) still in the eurozone, my usual rants:

- If you think one fiat currency is no good for different economies how could gold have ever functioned? The whole edifice of the classical economical thought is all around gold - the one currency for all.

- If you think the eurozone must inevitably "break up" - and with break up usually the commenters don't exactly say what exactly would break up, then why should this situation be that much different as when in the Thirties the different FEDs were nearly breaking up from each others? Where the break up did not happen?

DaBernank's picture

If you were to trade with certain tribes in Papua New Guinea, they might have no need for Gold and see it as worthless no matter how shiny and pretty, so in that case it would not be a "universal" store of value. If I am going to consider something to be a store of value, it should be widely accepted as such in the countries where I live and will preform most of my transactions.Gold fulfills that need for many in first-through-third-world economies.

By "break up" I assume it to mean that certain members might leave the currency union if they cannot get enough fiat liquidity to handle the needs of their populace. Greece might throw in the towel if things get significantly worse there. Who knows? Interesting times!

UGrev's picture

Widely accepted != universal

Your analogy using Papua New Guinea is insufficient to fit your argument. 

StychoKiller's picture

Hmm, how many shrunken heads does a typical New Yorker need, anyway?

Diogenes's picture

Why drag the Italians into this?

GeneMarchbanks's picture

Matters not because the € will never be allowed to supplant the $ hegemony. Nor will it be phased out altogether. London & NY media will just continue to use the media outlets to discredit the EZ and deflect attention until the looting sprees are so frequent that GB finally keels over and dies am unnoticed death.

disabledvet's picture

this is a very interesting concept...the idea that the "media" plays an absolutely critical role in "maintaining the fiction of a reserve currency." I was listening to the debates and found not a single serious question of the likes we would ask here. For example: "Bank America stock recently dropped below 5 dollars signalling this TBTF instituion was on the verge of being delisted and failing. What would you do?" Or how about "the Aircraft Carrier Stennis is currently in the Persian Gulf. Why?" These are just STARTING points towards..."something serious"...for example..."electing a President in time of war." But these questions will never be asked...nor answered in a direct way or understandable way. (The stock response is "i will not respond to hypotheticals.") My question would be this to that stock response then: "but you are running for President of the United States are you not? Are you saying you did not think thinking about such things is your job?" And of course the media exists to "make us not think about things." PURE EVIL. Does that concern you as well Mr. "I want to be President"? The fact that we are being commanded to..."not think about things"?

We need Geronimo's picture

Hmmmm..... Gold...paper...chickens...furs.  Gold...paper...chickens...furs.  Gonna have to go with gold (I can raise chickens later).

Debugas's picture

good point. The problem is not in the currency we use the problem is in who controls the capital (as in resources and tools of production). Because in the end the one who controls capital will collect all the money (be it gold or paper or whatever)

TheGardener's picture

At least this gets us closer to the mysteries of currency.

Monetary tools were of much lesser importance, the people at the time would trade just about anything at favourable exchange rates at the sight of a sword or later the upturned
symbolic version featuring a cross.

Gold was the money of kings, silver the money of the aristocracy and debt the money of the commons.

Adjusted for today , where slaves of some sort make up the majority of consumers, we should have a currency for common
exchange backed by sweat and blood.

If this sound too rude, let's name them euro or dollar.

Archduke's picture

beyond the similarities, the holy roman empire existed in a time of monarchic absolutism

and so it was quite forseeable that everything was refactored in power struggles after the

emperor's death, and the same thing happpend to each succession line like the stupor mundi.

to be fair, the empire in all its dynasties lasted just shy of a 1000 years, though after carolus

it fluctuated around german duchies so the term empire should really stand for german kingdoms.

 

the point is it took us many centuries chopping off heads and dying in trenches to get the

notions and institutions of democratic nation-states, international unions, and rule of law.

there won't be any catalyst like the king's death.  I think the institutions are more robust

than ever, and that rather than break down, europe will further integrate and reduce more

of the barriers skewing the euro imbalances (this means complete fiscal integration).

 

+1 on the feds in the thirties.  america did not blow up, instead it actually integrated more

tightly.  also on a geopolitical scale we need only look at the competition in other parts.

the trend in the far est is toward alliance and integration.  there's no way europe will compete

if it stays fragmented.  I say expect european income tax and eurobonds in the next decade.

 

 

 

ISEEIT's picture

Oh I smell me some Marla! I already know that I will love this because truth is where my heart can have peace.

Off and reading bitchez!

holdbuysell's picture

Be sure to read the one about the zookeeper:

Politicians are only making the final bankruptcy more likely by shelling out ever higher sums and setting up new rescue funds, he says. That's why he has converted his and his wife's life insurance and almost all their cash reserves into precious metal. "No one can take my gold away," he says. “

Source:

Fearful Investors Stash Money in Luxury Goods

http://www.spiegel.de/international/business/0,1518,806990,00.html

WonderDawg's picture

No one can take his gold away, eh? I didn't read the link, so if that was sarcasm, my apologies. But if not, he may learn that the .gov can take his gold away, or make it illegal for him to use it or profit from it. When push comes to shove, .gov might try something like that. Who knows?

Hulk's picture

Ah yes, the best laid plans of mice and men...

Hephasteus's picture

Yes but one way all they have to do is claim they were hacked or there was an error or computer problems and lock the money away from you till you start getting hassled by bill collectors and thrown out on the street. The other way they have to come to your house and take your gold and convince the people doing it that it's for a good cause or that they won't get caught or meet much resistance.

And when they did it the other way in Nazi Germany the people doing it had to take so much of the loot and stay drunk 24/7 that it had little profit margin.

TruthInSunshine's picture

That zookeeper has everything figured out (even if I'm about to make fun of him despite his speaking of a fundamental truth regarding fiatski toilet paper, meaning that he's way ahead of the curve vs 98.5% of his compatriots).

When they pass The Precious Metals & Alternative Currencies Act of 20xx in his country, and send a squad of heavily armed government employees to relieve him of his precious, at whatever government says spot is at that point (if they're feeling benevolent), he can tell them that his and his wife's precious metals are not those that they're looking for.

holdbuysell's picture

No worries...the article does go on to state exactly what you state above (no sarcasm in his statement). I see the message as this zookeeper perceives foremost safety in a physical asset, not in the bank, notwithstanding that the physical asset, too, can be taken away.

scatterbrains's picture

My question regards gold stems from the ZH article about Italy potentially banning the withdrawal of more than  300 Euro per day. If all countries start doing that then who am I going to be able to sell my gold to if folks can just barely withdrawal enough funds each day to buy food/fuel/heat/smokes/liquor/dope/hookers etc ?  Doesn't such a rule crush the price of pm's ? I'm trying to come to terms with the consequences of such a move and it's impact on pm's.

TheGardener's picture

Yes, you are right. No ban on gold, even if gold were the true and only money. Just ban money. Yes, money,cash and equivalents thereof might all be banned, imagine !?

It already started. Can`t even console myself that it started in places where favours were always the main means of exchange, cash just got them confused to spread corruption down below.

You are asking the right questions. Gold is , if any of us is going to see it, for the day after. In mayhem, which might well be an extended interim period just short of a decade, the items you well listed might not be on the cheap,
on the contrary .They might be considered highly regarded
and will cost you more then you are willing to spent of your dispensable gold. In that sense , you are right.

So,yes , PM`s won`t get you through in even more decadent manner and style : not now, not after. They will be almost as worthless as any human possessions , but they might buy you guns, ammo, food equivalents and in that order of desperation.

redcorona's picture

It's not so much a matter of principle. Should Europe be united or should Europe not be united. It's more a matter of who is in charge of a united Europe and what their interests are. At the present time the governing authority is some form of secular judaic plutocracy that seeks to flood Europe with 3rd world immigrants and destroy the last vestiges of positive native culture - to be replaced with ultra-materialism and homoerotic spinelessness.

I doubt this was the case under the Frankish Empire.

 

Ghordius's picture

"secular judaic" ??? eh??

the "case under the Frankish Empire" was the war against non-christians and the forced mass conversion of the Saxon tribes, all helped by the Roman Church and their network of abbeys to supply clerical/intelligence/mass-control support, a return of some of the old roman laws and the formalization of the "serfdom" principle where peasants were not allowed to leave their home villages.

redcorona's picture

Keeping in mind that the winners write the history books I am sure being dominated by the Catholics was a paradise for our people compared to domination by pax judaica.  The same cam be said about Russia - and has been said about Russia.  Take some time and read the Gulag Archipelago.  It offers an academic juxtoposition of civilization under Orthodox Christian Tsarist rule and judeo bolshevik rule.