This Alabama/New York is a stupid premise. Why just Alabama farmers? What about upstate NY farmers? Or how about Long Island wine growers? After all, it is 2 different economies. We use the same currency because we all are governed by the same federal system. And the US dollar is the by product of this federal system. Greece and Germany and Ireland are not of the same federal system. They have their own sovereignty and there-in lies the conflict.
R.C.'s point is valid: look at the US and Canada. But Canada having a different currency still gives them an advantage that Greece, say, no longer has vis-a-vis Germany. Canada went for a long time with a currency that was a lot lower than the US, and now it's up to around parity, which it had been for a long time back when I was a child. That time when it had a lower currency provided its businesses with a shield until things got better and now relative to the US they're doing quite well. Your point is excellent though: for some reason economists seem to think that currency markets are uniquely evil. I've never been able to figure out why when there are all kinds of ways that have been invented to deal with differing exchange rates. BTW, good summary of Jane Jacobs: http://www.zompist.com/jacobs.html
I think perhaps the use of the word "linked" is causing a disconnect here. By "linked" I do not mean "pegged" - pegging is simply creating two essentially-identical currencies where only one is needed. By "linked" I mean there is a relatively transparent, more or less dependable mechanism to adjust the conversion between the currencies. The Czech republic currency is intimately linked with that of its trading partners, otherwise nobody could count on getting paid. Hedging isn't free - the cost of hedging is generally inversely proportional to the degree of protection. IMO, what you have in the EU is an attempt to peg a whole lot of currencies that should instead be linked by the currency marketplace. That is going to cause all sorts of problems, just as the US would create a whole host of problems if individual states were suddenly allowed to independently control, eg, import tariffs and immigration policy. Which, if I read him right, is just another way of saying what trefoil is saying.
What gold standard? I have not read anyone on this thread advocatiing a gold standard. Is this post intended to be satire or do you actually believe this garbage?