by Mike Gray
On Mises Daily, Llewellyn H. Rockwell, Jr. informs us that the International Monetary Fund (IMF) thinks the world should seriously consider a global currency—issued by and controlled by a global central bank run by the big money elites.
“It’s a long-term plan,” he tells us, “but the plan has the unmistakable stamp of Keynes”:
A global currency, bancor, issued by a global central bank would be designed as a stable store of value that is not tied exclusively to the conditions of any particular economy. …. the elites never give in, never give up. The proposal for a global currency and global central bank is again making the rounds. What problem is being addressed? What is so desperately wrong with the world that the IMF is floating the idea of a world currency? In a word, the problem is hoarding. The IMF is really annoyed that “in recent years, international reserve accumulation has accelerated rapidly, reaching 13 percent of global GDP in 2009 — a threefold increase over ten years.”
You see, monetary policy isn’t supposed to work this way. In their ideal world, the central bank releases reserves, and these reserves are lent out, leading to a boom in consumption and investment and thereby global happiness forever (never mind the hyperinflation that goes along with it).
A much-despised gold standard could be a cure for both economic and political ills:
Under a gold standard, the physical metal is the limit, and the market is the master. Under a global paper system, the paper provides no limit whatsoever, and the politicians are the masters. So there is no sense of talking about the glories of globalization in the current context. A world paper currency and world central bank would heighten the moral hazard and lead to a global inflationary regime such as we’ve never seen. There would be no escape from political control at that point.
A gold standard would keep avaricious and power-hungry politicians in check: no more unending wars, non-terminating government entitlement programs, and an end to the erosion of—indeed, a return to—Constitutional governance. And that, boys and girls, is why it’ll never happen.
Presumably, the proposed “bancor” would be issued in paper form, perhaps adorned with Keynes’s visage—but why bother? If it’s true, and not just an urban legend, that upwards of 97 percent of all “money” exists purely as noughts and ones inside computer CPUs, issuing any currency would be a waste of, um, money.