"what problems are you referring to here, Toe ?" Well just refering to events like price fixing among companies. In Australia for example it is widely believed that 'competing' petrol companies talk to each other about setting prices. Also regarding governments setting prices, remember how poorly government price setting and distribution of food and household goods worked in Russia not so many years ago.
Free markets are the best way to arrive at prices which actually ballance supply and demand. Systems which allow monopolies to set the agenda on price or distribution are mostly destabilising for the economy.
TerryL, Establishing a single world currency will not be easy. Do you think US will give up dollar hegemony just like that? If US government rejects the option of oil valuation in euro, then such dream as giving up dollar hegemony is just too far from reality. Combining different currencies into one also difficult in terms of uniforming the monetary policies across countries, and interest rates as well as accounting and budgetary systems across the globe will have to be melded together. Just look at the EU. There are still members that breach the budget rules there, even after euro existed for several years now. And that is to mention EU is still a regional organization. People each thinks differently. Each has different visions and ideals. These differences are at most occasions, conflict each other. This is why unifying ideals and visions across the globe is virtually impossible for now. Universal currency requires such thing before it could be realized. Fixed exchange rates and floating ones are similar to monopoly and free markets. Most people prefer free markets, which could be translated to "democracy" and "freedom", while monopoly translates to "authoritarian". Under fixed exchange rates, some currencies may get themselves overvalued or undervalued, and this demand a solution which I think will be difficult to find. Under floating exchange rates, the market decides the value of each currencies, and thus there's hardly any overvaluation or undervaluation occur. There are times when speculative forces create extreme conditions that lead to overvaluations and/or undervaluations, but in time, this will be sorted out by the market as the price will tend to re-balance itself. I guess this is also an obstacle to achieve the creation of a universal currency. As for why the poor gets poorer or the rich gets richer, that has nothing to do with money. Even rich countries began as nothing. Such way of thinking will only reinforce the imbalance. Currently poor countries still have resources, natural resources. These countries may have been exploited by rich countries, while they actually have the right to say "no". So, why don't just say "no"? Why would their governments yield to the will of the rich nations? Interests have nothing to do with such situations. You don't like interests? Don't accept them, then. To my view, interests is how we compensate inflation rate. The nominal amount of money plus interests rate minus inflation rate is your real amount of money. Erasing interests will reduce your real amount of money. Unless the economy suffers deflation. But nowadays, prices of goods move up, not down. That's all I want to say for now. Cheers!
1.IS Fx just gambling or does it serve some useful purpose? To serve some useful purpose, it is probably also assumed that you could actually make a difference which thereby fulfill a certain role you think fx has in the market because if you couldn't then whether you did it or not does not really, in terms of affecting the market. But the sad reality is that unless you have a super huge capital at a right moment (like Soros and the economic dilemma experienced by the Bank of England), your trades might just bring about some extra cash on the side at best. 2. Would it be better for the world to have one currency? Why? Why not? It is my opinion that it is best for the world to have one currency because speculative trades, even if it is to correct the market, sometimes could not overwhelm the mighty force of "herding" and it not only create financial crisis but these crises bring about unnecessary victims of such events like the Asian Crisis in Indonesia which resulted in rapes and riots, though the crisis in itself is not the sole factor but is a catalyst to an avoidable event.
is there noone here who followed macro-economics 101 ? One currency would mean one intrest rate, this would pose big problems because intrest rates determine the pace at which the econommy grows. As you know this pace rather differs from one end to the world to the other so unless we get the world economy to grow at the same pace different currencies will remain. So this means probably for ever. This is one of the reasons GB doesn't want to join in with the euro.
I shall ponder on the wise thoughts so far and get back. PS> to cvds16 what if there were no interest rates that existed, just for the sake of argument
the future value of any enterprise you start should be more than it's worth today, otherwise there is no point in starting it. This implies an interest rate ... get yourself a good book on macro-economics, it takes a while but things might get clear ...