Contagion is a problem, we are all interconnected for better or worse. A bad apple can spoil the whole basket. Welcome to the world our leaders have designed or allowed to form. Whether by design or merely as a byproduct of globalization we have weaved a web of financial transactions that circle the globe. Over the last several years as money was printed by the central banks it was not contained in the countries where it was printed. This money has instead flowed across borders influencing and distorting markets and prices across the world.
Now that we have wound up and distorted prices we are facing the great unwinding which may prove very painful, This event may be described in several ways, most likely as a collapse or a re-alignment but in reality, it is the recognition that our path was an unsustainable illusion. If the blame and focus are put upon currencies many people will see the logical and easiest answer is to form a new world currency. The argument and justification for doing so would be that it would allow the world to enter a modern new age and free economies of the clunky restraints placed upon us by the current system.
Do not be fooled, this is not the answer and it would not be easy to accomplish. By looking at the problems the Euro has faced we begin to see the pitfalls of such a currency. While those wanting to take us in such a direction would try to paper over the negatives with prescriptions to rectify its ills the basic flaws would still exist. Even more problematic than those ills is the concentration of power it would create. The argument that by binding ourselves closer together we would be less inclined to attack each other may prove untrue.
Some people have been calling for a "world currency" for years. the saying "one should never let a good crisis go to waste" means a meltdown with high levels of fear would present a perfect opportunity and catalyst to advance this agenda down the field. Remember many people with agendas have a lot to gain when a major shift in the currency markets takes place. Even with some countries not participating in such a currency dislodging the American dollar as the world reserve currency represents such a shift.
Calls for a new world currency may grow over the coming years, if the world stumbles into an economic hell the noise could become deafening because people and their leaders tend to look for easy answers. To those who have painted themselves into a corner this option would represent a new lease on life and a way to avoid and lessen the consequences of their past actions. The blessing of this political smokescreen has "inflation" written all over it in the kind of ink only visible with a special light.
Footnote; Your comments are welcome and encouraged. If you have time
check out the archives for another post that may be of interest. Below are three posts on somewhat related issues,