trade | Barataria - The work of Erik Hare

It’s been a long time since I wrote about Europe. How many ways can a humble blogger say, “Nothing has really changed”? Nothing has. Currency union has turned into a straightjacket of austerity and the European Union is plunging into a deep recession. The only true news has been a day of protest across Europe, fueled in part by the now 25% unemployment rate in Spain and other nations. It has become a full meltdown.

But so far, no banks have failed. Isn’t that wonderful?

There are several potential problems for the US as this continues, but the most important is its effect on our trade. Yet, for all the trouble in Europe, it may not affect us at all. Can Europe burn while the US stands by? The short answer is sure, why not. Here’s why:

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Imagine a single currency, all around the world. No more converting between Dollars and Euros and Pounds, the money in your wallet is your ticket to ride anywhere.

Sound like a fantasy? Throughout history it’s been more or less the standard. The coins from one era might come from Rome or Madrid or London or Beijing, but one accepted unit of exchange was the norm until very recently. In many ways, the standard now comes from twelve Federal Reserve banks in paper form, printed with green ink.

But we’re a global society now, with total worldwide trade taking up nearly $8T of the global product of $52T. Is it time for a new global currency that isn’t subject to the needs and politics of one nation? More and more, the answer is “yes”. But getting there, as with anything international, is the hard part.

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