Cons



= ** Cons of World Currency ** =

=﻿ = Americans have enjoyed the economic supremacy that the United States has held on the rest of the world for some time now but that may soon change. At the G-20 summit in 2009 China and Russia were calling for a world currency to replace the dominating U.S dollar as an international trade currency (Love, 2009). Judging from which countries at the G-20 summit were backing a world currency it is quite clear that third world countries Like China, with huge deficits, economic disparities, and trade differences want to even the economic playing field when dealing with the United States.

The talks at the G-20 summit compared the Euro to a world currency and how beneficial the Euro has been for disadvantaged countries. There is no model to gage the effectiveness of a world currency, the closest thing to a world currency would be the Euro used in the European Union. The central banking system used in the European Union has caused financially stable countries to accept the debit and financial burdens of countries that are on the verge of economic collapse (Siebert 2007). Baker (2011) stated that economically unstable countries will share “part of the costs of its deficit onto other nations in the form of indirect monetization” (para. 7). This has led to countries with huge deficits like Spain and Greece to bring down the financial stability of other European Union countries. Is this what a world currency would look like, financially stable countries like the U.S forced to take on the burdens of countries with huge deficits like Greece and Spain?

Dr. Zhou Xiaochuan (2009) “chief banking governor of Communist China” is the main force pushing for a world currency to replace the dominate U.S dollar for international trade. In an essay written by Dr. Xiaochuan for the G-20 summit, Dr. Xiaochuan called for a world currency he was calling “the super-sovereign currency” established around the International Monetary Fund (2009 pp 1-2 ). China has been devaluing its own currency trying to bring down the value of the U.S dollar in hopes of strengthening economic disparities in Communist China (Shah 2010). With a devalued U.S dollar third world countries like China can gain a financial foothold on the world economy and close the gap in economic disparities. According to statistics from the International Monetary Fund website, the United States gross domestic product or GDP for short, is listed as number nine in world economies compared to Communist Peoples Republic of China’s GDP being listed as number ninety (2010). The statistics clearly show why China wants to devalue the U.S dollar and create a world currency. You have to kill the king to take over the throne and the United States dollar is still king in the international trade market. Why do you think everything you buy today is made in China? It is because of trade differences and deficits between the United States and China. Right now it seems the United States and other super power countries are benefiting from this huge gap in the value of currency between the two countries, but is it a sham? Well, according to a report sent to the U.S Congress by analyst Michael Martin (2007) from the Asian Political Economy Foreign Affairs, Defense, and Trade Division, “there is a large and growing difference between the official trade statistics released by the United States and the People’s Republic of China”(para 1). The difference in the statistics is over whelming, in the tune of billions of dollars. It seems China has been lying about the value of its exports shipped to the United States to keep the value of the dollar low in China. This is more proof that China is trying to collapse the U.S dollar in hopes of replacing it with a world currency.