Transcript GCC Monetary Union & transition to the Single Global Currency

GCC and the Inevitable
Transition to the Single
Global Currency (SGC)
Dr. Celali YILMAZ
Advisory Board Member
Single Global Currency Association
GCC Currency Forum
15th June 2008, Dubai
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Disclaimer
• This presentation is prepared by Mr. Morrison
Bonpasse, President of the Single Global
Currency Association and author of the book
“the Single Global Currency: Common Cents for
the World”.
• Comments are reflects the presenter’s personal
views and do not necessarily reflect the views of
the Capital Markets Board of Turkey.
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Some Simple Questions
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Which One is More Valuable?
(All silver)
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Which One is More Valuable?
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Do You Know?
• How many currencies (or central banks) on the
world:
– 100 years ago?
– Today?
– 20 years later?
• How many different paper money printed and
circulated:
– In Germany, in 1920s
– In the US before 1913 (FED)
(170,000!)
(3,000)
• What is the optimum number of currencies for
the World economy?
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GCC Monetary Union & Transition
to the Single Global Currency
• What the people of the world want is
stable money and price stability.
• Monetary Unions aim for such stability.
• MU Central Banks work for that goal and
not national interests.
• The remaining largest impediment to that
goal is the existence of multiple currencies
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GCC Monetary Union: To Be
the World’s Second Largest (GDP)
• European Monetary Union is largest
• 15 Countries
• GDP $11 Trillion
• GCC Monetary Union
• 5 Countries
• GDP .75 Trillion
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Other Monetary Unions
THE WORLD  MONETARY UNIONS (MU)
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1967 BRUNEI-SINGAPORE. (drop 1 currency)
1983 EASTERN CARIBBEAN MU. (7)
1994 WEST & CENTRAL AFRICAN MU. (12)
2002 EUROPEAN MONETARY UNION. (11)
2007 SLOVENIA JOIN EMU (1)
2008 CYPRUS, MALTA JOIN EMU (2)
2009 WEST AFRICAN MONETARY ZONE (4)
2010 GULF COOPERATION COUNCIL (4)
2008-201? EMU/EU ACCESSION COUNTRIES (12)
2012 EAST AFRICAN COMMUNITY (4)
2016 SOUTH AFRICA DEVLPMT COUNCIL (13)
FUTURE? E. ASIA, S. ASIA, N. & S. AMERICA
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REDUCED # INT’L CURRENCIES
for United Nations Members
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1946 51 COUNTRIES 51 CURRENCIES
2000 189
157
2006 192
146
2008 192
143
2010 192
135
2016 192
115 (?)
2024 192
1 (?)
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SINGLE GLOBAL CURRENCY
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Current Situation
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“Optimum” Monetary Unions
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Ideal: Single Global Currency
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SINGLE GLOBAL CURRENCY
DEFINITION
• A COMMON CURRENCY,
• MANAGED BY A GLOBAL CENTRAL BANK WITHIN A
GLOBAL MONETARY UNION,
• THAT PEOPLE CAN USE WITHIN MEMBER
COUNTRIES AS LEGAL TENDER AND FOR
INTERNATIONAL TRANSACTIONS.
• "DO YOU MEAN LIKE THE EURO?" YES!
• AND OTHER COMMON CURRENCIES, TOO.
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SINGLE GLOBAL CURRENCY
BENEFITS
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Eliminate $400 Bln annual FX transaction costs
Eliminate global (currency) imbalances
Eliminate need for FX reserves
Eliminate currency fluctuations
Increase international trade
Increase asset values, & worldwide GDP by
$trillions
• Reduce worldwide interest rates
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SINGLE GLOBAL CURRENCY
WHO WILL BENEFIT FROM HAVING A SGC?
EVERYONE IN THE WORLD,
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CORPORATIONS
TRAVELERS
INDIVIDUALS PURCHASING/SELLING ANYTHING IN GLOBAL
ECONOMY (ALMOST EVERYONE)
PEOPLE LIVING IN COUNTRIES WHERE CURRENCY VALUES
FLUCTUATE (EVERYONE, IN BRIEF)
PEOPLE IN COUNTRIES SUBJECT TO CURRENCY CRASHES
EXCEPT FOR THOSE WHO MAKE THEIR LIVING OR
• FORTUNE FROM THE EXISTING SYSTEM
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CURRENCY TRADERS
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CURRENCY SPECULATORS
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HEDGERS AGAINST CURRENCY RISK
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SINGLE GLOBAL CURRENCY
COSTS
• Loss of local monetary policy, but this is not
always a loss.
• Loss of ability to manipulate exchange rates, but
this is not always a loss.
• Loss of national symbols, but people care more
for stable money than historic or artistic
money.
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SINGLE GLOBAL CURRENCY
IS A STABLE CURRENCY
A FUNDAMENTAL HUMAN RIGHT?
• Article 17, of the Universal Declaration of Human Rights:
• (1) Everyone has the right to own
property
• (2) No one arbitrarily deprived of
property.
NEEDED:
• Worldwide acceptance of a FUNDAMENTAL HUMAN
RIGHT to a stable currency.
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SINGLE GLOBAL CURRENCY
EXISTING GLOBAL STANDARDS
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NUMBER SYSTEMS (Decimal, Binary)
TIME (Calendar, 24 Hours, 7 Day Week...)
COMPUTER (INTERNET, PROGRAMS...)
MEASUREMENTS (Metric System:
WEIGHT, VOL, LENGTH, TEMP)
– RADIO FREQUENCIES (MEGAHERTZ)
– BAR CODES
• DO ANY OF THESE CHANGE WHEN OBJECT BEING
MEASURED CHANGES?
• WHY SHOULD MONEY?
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SINGLE GLOBAL CURRENCY
How to get there from here
• Creation of New Monetary Unions, e.g.
GCC.
• Expansion of Monetary Unions, e.g. EMU
• “Ization” as in Dollarization, Euroization
• International Monetary Conferences
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Conclusion:
GCC CAN LEAD WORLD TO SGC
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CREATE GCC MONETARY UNION
EXPAND GCC MONETARY UNION
MERGE GCC MU WITH OTHER(S)
CALL FOR MONETARY CONFERENCE
NOT ANTI-DOLLAR, BUT PRO GLOBAL
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Last Words
• “Most good ideas takes years, sometimes
centuries to be recognized.”
• “You can never solve a problem on the
level on which it was created.”
• The future of the SGC may be larger
than its modest beginnings.
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SINGLE GLOBAL CURRENCY
• IT’S COMMON CENTS
• SINGLE GLOBAL CURRENCY ASSOCIATION
• www.singleglobalcurrency.org
• GOAL: SGC by 2024, 80th Anniversary of
BRETTON WOODS CONFERENCE – 1944.
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