The Economist: "Get Ready For A World Currency By 2018"

Via Climateer Investing blog,

Get Ready for the Phoenix

January 9, 1988, Vol. 306, pp 9-10

THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century.

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At the beginning of 1988 this appears an outlandish prediction. Proposals for eventual monetary union proliferated five and ten years ago, but they hardly envisaged the setbacks of 1987. The governments of the big economies tried to move an inch or two towards a more managed system of exchange rates – a logical preliminary, it might seem, to radical monetary reform. For lack of co-operation in their underlying economic policies they bungled it horribly, and provoked the rise in interest rates that brought on the stock market crash of October. These events have chastened exchange-rate reformers. The market crash taught them that the pretence of policy co-operation can be worse than nothing, and that until real co-operation is feasible (i.e., until governments surrender some economic sovereignty) further attempts to peg currencies will flounder.

 

 

The new world economy

 

The biggest change in the world economy since the early 1970’s is that flows of money have replaced trade in goods as the force that drives exchange rates. as a result of the relentless integration of the world’s financial markets, differences in national economic policies can disturb interest rates (or expectations of future interest rates) only slightly, yet still call forth huge transfers of financial assets from one country to another. These transfers swamp the flow of trade revenues in their effect on the demand and supply for different currencies, and hence in their effect on exchange rates. As telecommunications technology continues to advance, these transactions will be cheaper and faster still. With unco-ordinated economic policies, currencies can get only more volatile.

 

 

In all these ways national economic boundaries are slowly dissolving. As the trend continues, the appeal of a currency union across at least the main industrial countries will seem irresistible to everybody except foreign-exchange traders and governments. In the phoenix zone, economic adjustment to shifts in relative prices would happen smoothly and automatically, rather as it does today between different regions within large economies (a brief on pages 74-75 explains how.) The absence of all currency risk would spur trade, investment and employment.

The phoenix zone would impose tight constraints on national governments. There would be no such thing, for instance, as a national monetary policy. The world phoenix supply would be fixed by a new central bank, descended perhaps from the IMF. The world inflation rate – and hence, within narrow margins, each national inflation rate- would be in its charge. Each country could use taxes and public spending to offset temporary falls in demand, but it would have to borrow rather than print money to finance its budget deficit. With no recourse to the inflation tax, governments and their creditors would be forced to judge their borrowing and lending plans more carefully than they do today. This means a big loss of economic sovereignty, but the trends that make the phoenix so appealing are taking that sovereignty away in any case. Even in a world of more-or-less floating exchange rates, individual governments have seen their policy independence checked by an unfriendly outside world.

As the next century approaches, the natural forces that are pushing the world towards economic integration will offer governments a broad choice. They can go with the flow, or they can build barricades. Preparing the way for the phoenix will mean fewer pretended agreements on policy and more real ones. It will mean allowing and then actively promoting the private-sector use of an international money alongside existing national monies. That would let people vote with their wallets for the eventual move to full currency union. The phoenix would probably start as a cocktail of national currencies, just as the Special Drawing Right is today. In time, though, its value against national currencies would cease to matter, because people would choose it for its convenience and the stability of its purchasing power.

 

 

The alternative – to preserve policymaking autonomy- would involve a new proliferation of truly draconian controls on trade and capital flows. This course offers governments a splendid time. They could manage exchange-rate movements, deploy monetary and fiscal policy without inhibition, and tackle the resulting bursts of inflation with prices and incomes polices. It is a growth-crippling prospect. Pencil in the phoenix for around 2018, and welcome it when it comes.

Just to be clear: This is NOT f?ke™ news.

It is an article from The Economist published 29 years and six months ago, today.

We are counting down the minutes.

Comments

Deep In Vocal … (not verified) Sun, 07/09/2017 - 11:17 Permalink

nobels & peasants...all a show all a plan...... whatever happens, it's going to happen. psychopaths and pedophiles run the show. the human being continues to destroy the planet and is on it's way to it's own demise. I can't wait.

Ramesees Mr 9x19 Sun, 07/09/2017 - 11:58 Permalink

The Economist is becoming even worse clickbait than Bloomberg.  And that's saying something.Bloomberg - a snarky photo along with a clickbait headline, some meaningless chart, a couple phrases that sound like jargon to somebody that doesn't work in finance, and a fill-in-the blank template article.  Instant cover story for that week. Sad to see Economist follow Bloomberg down (even though Economist is Marxist trash). 

In reply to by Mr 9x19

ThirdWorldNut Ramesees Sun, 07/09/2017 - 12:09 Permalink

Economist supported Bush Junior, Iraq War and Obama. Worst mistakes of this century by some distance. If it was in the business of decision making (which means pretty much anything except propaganda) it would have been bankrupt long ago. Yet liberals quote Economist as if just because something was printed in it makes it the final word.

In reply to by Ramesees

Save_America1st cheka Sun, 07/09/2017 - 13:13 Permalink

This article misses the point and is antiquated.  The so called Phoenix will be or already is/are the crypto currencies. They are rapidly evolving and being adopted worldwide by people, corporations, small businesses, and countries. It's not going to stop, so figure it out now and diversify into them in some partial way just as you should have been doing with phyzz silver. It only makes sense at this point because crypto digital currency systems are not going away.... They are only going to continue to grow and evolve until the soft transition from dollar and other paper fiat currencies to crypto digital is compete. Don't be like Kodak or Sears who didn't understand and adapt to technological evolution or lime them you will be left behind in the dust. Butcher.... ;-) 

In reply to by cheka

Pinto Currency The_Juggernaut Sun, 07/09/2017 - 15:32 Permalink

The bank of England created the LBMA to suppress gold (and thus global interest rates) in 1987 leading to this global debt bubble.From 1987 and on, it was all over but the crying.The Rothchild Economist mag would have known as its owners lobbied Thatcher hard for the creation of the LBMA and unallocated paper gold - and a global debt bubble:http://www.safehaven.com/article/42798/the-rape-of-america-the-core-fed…

In reply to by The_Juggernaut

land_of_the_few The_Juggernaut Sun, 07/09/2017 - 16:17 Permalink

World currency will be glass beads and cowrie shells. And pieces of long-forgotten advanced technology like copper chisels and flint speartips.The ultra-rich will have life-prolonging technology like shoes, woven textiles, and out-of-date stocks of Preparation H, Dentucreme and Pepto-Bismol.People will communicate by writing in Jive using small shards of coal on broken pieces of housebrick and placing it in each other's letter-box.

In reply to by The_Juggernaut

nmewn Miffed Microbi… Sun, 07/09/2017 - 20:09 Permalink

1988.But it is what "they" want long term. Cashless societies & one currency because, it means control and world wide currency-cashless societies means world wide control. If you only labor for lets say, a digit or a credit, it is not on your person, no longer in your possession. And if you happen to be some treasonous rebel or non-elite unconnected criminal (in "their eyes") why, so much the better.For "them".Not so much for the aggrieved rebel or common criminal made destitute by their policies ;-)

In reply to by Miffed Microbi…

OverTheHedge Save_America1st Sun, 07/09/2017 - 17:39 Permalink

Ok, so.we have a one world currency. This means there will be two or three producer nations, and everyone else will run a deficit.UUS, Japan, China, and the rest of the world is Greece. That would appear to be the plan.Of course, the US is currently in with Greece.The other option is to have the creditor nations make.transfer payments to the REST OF THE WORLD. Sound plausible? Eurozone MKII. 

In reply to by Save_America1st

OpenThePodBayDoorHAL Save_America1st Sun, 07/09/2017 - 17:48 Permalink

OK so computing distributed on computers all over the world is going to replace computing on centralized servers?Great idea...except oops it's *400 million times more expensive*"We can see here that it costs 0.09 ETH or $26.55 to add two numbers together 1 million times. Compared to running on a local computer or cloud server this seems pretty high. Let’s do a quick price comparison to AWS.I can add two numbers together 1 million times in python in 0.04 seconds. Amazon charges $0.0059/hour for their cheapest EC2 instance?—?t2.nano. This costs $0.000001639/second or $0.000000066 for the operation. Compared to $26.55, this is about 400Million times more expensive (or 40Million if you are willing to pay a low gas price). Whoa!"https://hackernoon.com/ether-purchase-power-df40a38c5a2f?lipi=urn%3Ali%…  

In reply to by Save_America1st

All Risk No Reward ThirdWorldNut Sun, 07/09/2017 - 20:07 Permalink

The Economist is a propaganda outlet for the Debt-Money Monopoly. They will never explain the ramifications of the zero-sum nature of a debt-based monetary system, though.

They want you to think that cash will burn, so you will act reckless with it.

The debt-money and debt-liabilities equal... if the money goes to zero... do the debts go to zero?

No, the debts get worse.

And the people who control the money also control trillions in net money worth and trillions in debt paper... so they won't zero out their assets.

What are they going to do?

Can't Pay? We'll Take It Away!
http://www.channel5.com/show/cant-pay-well-take-it-away/

That's the obvious endgame.

The Money Power has rigged the planet Earth to be the Debt Star. Their debt-money systems are their generator - their control mechanism.

They will own / control almost everything and the ordinary plebs (who think their vote count... schmucks!) will be dependent... and controlled... if they are allowed to live.

In reply to by ThirdWorldNut

GUS100CORRINA The Joker Sun, 07/09/2017 - 12:40 Permalink

I agree ... a lot going on behind the scenes in the circles of the elite, the deep state and the illuminati.By the way, we can't get to a NEW WORLD ORDER until we get to a ONE WORLD CURRENCY.It is coming as proclaimed in speeches by the first George W. Bush in the 1980s. So much material on the subject is available. My only advice: Be discerning in what you choose to read and/or listen to in these last days.

In reply to by The Joker

Debt-Is-Not-Money GUS100CORRINA Sun, 07/09/2017 - 12:55 Permalink

Did Paddy Chayefsky (Network) get it right, or what?"You have meddled with the primal forces of nature, Mr. Beale, and I won't have it! Is that clear?! You think you've merely stopped a business deal -- that is not the case! The Arabs have taken billions of dollars out of this country, and now they must put it back. It is ebb and flow, tidal gravity. It is ecological balance. You are an old man who thinks in terms of nations and peoples. There are no nations. There are no peoples. There are no Russians. There are no Arabs. There are no third worlds. There is no West! There is only one holistic system of systems, one vast and immane, interwoven, interacting, multi-variate, multi-national dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, Reichmarks, rins, rubles, pounds and shekels. It is the international system of currency which determines the totality of life on this planet. That is the natural order of things today. That is the atomic and subatomic and galactic structure of things today! And YOU have meddled with the primal forces of nature, and YOU WILL ATONE!"Arthur Jensen has spoken!

In reply to by GUS100CORRINA

edotabin GUS100CORRINA Sun, 07/09/2017 - 17:36 Permalink

I'm ready for all the down votes on this comment.I suppose one of the biggest differences between me and a lot here is that I am not necessarily against a world currency, no borders, "we are all one" and "let's sing Kumbaya" together etc. etc etc. What I'm extremely strongly against is the way they are trying to do it and the rate at which they are trying to do it.Let's look at this historically. It took people hundreds and hundreds of years to go from city-state to one country. So what makes them think they can completely integrate the entire world in a matter of a few decades? Furthermore, they are trying to replace it with this "Animal Farm" type scenario where a few a lording over the rest. In order to do this they must eliminate all differences or at least severely blur the lines. They have to eliminate critical thinking, historical differences (and in many cases history itself has to be rewritten), religions, customs, languages, traditions and they have to demote the family structure. Opposition is weakened by being pitted against each other so as to provide less resistance and make "conformity" a little easier to impose.Ok, so I'm supposed to stop believing in Jesus and believe in Hillary? I mean what? Yellen? Obama? I wouldn't believe in them if it was the last thing I did. Shoot me first!Then we have the conquest approach. Kill them into submission and they will conform. No, they won't. History has proven that submission will not work.Countless races and people have been subjected to war, slavery, mass murders, genocide etc etc. Each time we have empires and dynasties go up and fall back down. It doesn't work! Wake up oh wise ones that seek to gain our faith and submission.They should try honesty for once. Some force may be required but it should be 80% honesty and 20% force and 0% scheming, lying and propaganda. That and give it about 500 years. Some things can only be given and not taken. Trust and willingness are two of those things.So, to wrap this up, I am not against a one world scenario but I am not for animal farms, crooked monetary systems, deceit, trickery and lies. I am not buying what you are peddling. The foundation of this thing is rotten. It will not hold. It will collapse. Fix your foundation. Make something better and people might join willingly and offer to help build something better.Anyway, I gotta jet here but you get the idea. 

In reply to by GUS100CORRINA

stinkypinky The Joker Sun, 07/09/2017 - 12:51 Permalink

Yeah the choice of name is fascinating. Just as I've heard many predict that a world currency would be ushered in by a (orchestrated) worldwide economic calamity, making people ASK for a world currency (being mentally shepherded in that direction of course by the Media). Hence the Phoenix: the worldwide economy rising from the ashes of the calamity...

In reply to by The Joker

PhilofOz J S Bach Sun, 07/09/2017 - 18:47 Permalink

Oh dear!!!  "On June 6, 2016, the Anti-Defamation League (ADL) announced that it had placed the triple parentheses in its database of symbols that it considers hate speech. CEO Jonathon Greenblatt explained that the symbol was "the online equivalent of tagging a building with anti-Semitic graffiti or taunting someone verbally," and that the ADL was "working with our partners in the tech industry to investigate this phenomenon more deeply."The depths some will go to try and silence others!

In reply to by J S Bach

EddieLomax Ramesees Sun, 07/09/2017 - 19:08 Permalink

The economist were endlessly spouting doom and gloom stories about brexit, so this bit of stupidity doesn't surprise.So who gets to print the money here?  And who is the lender of last resort?  When the US, UK, Germany, France, Japan etc get into trouble can they print/borrow their way out of it, or do the become Greece 2.0.What they are essentially saying is that the Euro is a fantastic idea and we should use it everywhere, because then people going on holiday will find it easier to buy things, the economist really has hit rock bottom when it comes to moronic thinking.

In reply to by Ramesees