this post was submitted on 30 Nov 2024
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[–] TheDemonBuer@lemmy.world 40 points 2 weeks ago (27 children)

I've said it before and I'll say it again: the world needs a neutral reserve currency, not one issued and controlled by whatever country happens to be the dominant superpower.

[–] LadyAutumn@lemmy.blahaj.zone 14 points 2 weeks ago (1 children)

I feel like this doesn't solve much of the things you think it would.

Also, capitalists will never agree to this. They like having their own currencies cause they can manipulate them.

[–] TheDemonBuer@lemmy.world 1 points 2 weeks ago

...capitalists will never agree to this.

I think this is the only way the capitalists can make their global, free market work. If the capitalists were smart, they'd want a neutral, global reserve currency. But, since most capitalists aren't smart, it will probably never happen.

[–] catloaf@lemm.ee 12 points 2 weeks ago* (last edited 2 weeks ago) (3 children)

Who would issue it? What would it be backed by? Gold is globally valued due to its material value, but good luck getting your local coffee place to take it.

[–] boonhet@lemm.ee 27 points 2 weeks ago (3 children)

Congratulations, you've stumbled upon the one place where cryptobros would have a point if they weren't mostly trying to make their "currencies" be investments rather than actual currencies.

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[–] TheDemonBuer@lemmy.world 7 points 2 weeks ago (2 children)

It would have to be issued by some world central bank.

Money doesn't need to be backed by anything, necessarily. Or, I guess you could say money is "backed" by all the goods and services available to purchase.

[–] RinseDrizzle@midwest.social 9 points 2 weeks ago (1 children)

Not trying to be a prick; here for discussion. Wherrrree do we actually put central bank? I guess that maybe matters less than staffing the thing?? Obviously not an easy thing to do overnight but man we'd need to have like, serious cooperation and transparency to do that proper. Maybe not impossible though!

[–] TheDemonBuer@lemmy.world 1 points 2 weeks ago

We'd want it to be in a neutral place, if at all possible. Perhaps a country would be willing to donate a small portion of their territory so an independent jurisdiction could be formed, not unlike Washington D.C.

[–] catloaf@lemm.ee 2 points 2 weeks ago (1 children)

For anything more than basic bartering, i.e. credit, it needs to be backed by an assurance that the fiat currency will be managed properly. Your basic loan is predicated on the trust that when you borrow $1000, the US won't go and print another $1000 for shits and giggles and halve the value of what you get repaid. (I'm ignoring interest for simplicity here.)

For example, let's say a car costs $30,000. I borrow that on a three year loan. But after one year, a maniac takes charge of the federal reserve and starts printing money. Now, since the value of the dollar has dropped, the same car costs $90k, but I'm still buying it at the original price. (Remember, the bank owns the car until I pay off the loan.)

For a real-world example, look at any hyperinflation scenario. When the unit value of a currency drops that fast, nobody wants to trade in that currency, because they would lose buying power.

This is why a currency has to be backed by a trustworthy body. Cryptocurrency is great, but if the operators have no consequences for manipulating it, then it'll never replace traditional government-backed currency.

[–] TheDemonBuer@lemmy.world 1 points 2 weeks ago* (last edited 2 weeks ago)

...it needs to be backed by an assurance that the fiat currency will be managed properly.

That's the point of having a global central bank. They would manage it, and we would want to ensure that all appropriate mechanisms for oversight and accountability were in place. Transparency would also be of high importance.

Edit: I should point out that this is already somewhat in place. The US dollar, a fiat currency, is currently the world reserve currency, and it's managed by the US federal reserve central bank. The problem is, the US federal reserve is the US central bank and it is not neutral, nor is it accountable to the rest of the world.

[–] HK65@sopuli.xyz 4 points 2 weeks ago

Gold. It used to be gold.

[–] Kecessa@sh.itjust.works 9 points 2 weeks ago (2 children)

Just using the Euro would be a great improvement since it's not based on a single country's economy.

[–] hanrahan@slrpnk.net 4 points 2 weeks ago (1 children)

Indeed, I'd like to see my country, Australia, join the EU and trade the pacific peso in for the Euro. What a grand experiment!

[–] SkunkWorkz@lemmy.world 10 points 2 weeks ago (1 children)

You lads are already competing in the Eurovision Song Contest. So why not go all in and join the EU as well.

[–] FlyingSquid@lemmy.world 3 points 2 weeks ago (2 children)

I wouldn't base it on those rules considering Israel is also in Eurovision.

[–] YesMassa@lemmings.world 2 points 2 weeks ago

Doubt they want to join. Because then they have to recognize the ICC

[–] jaek@lemmy.world -1 points 2 weeks ago (1 children)

Like it tracks, because they are European. But I'm not happy about it.

[–] FlyingSquid@lemmy.world 1 points 2 weeks ago (1 children)
[–] jaek@lemmy.world -1 points 2 weeks ago (1 children)

Israel is in Asia, Israelis are european

[–] FlyingSquid@lemmy.world 2 points 2 weeks ago

Israelis are from all over the place. Aside from all of the Arab people (including people who would have once been considered Jewish Arabs), there are a significant number of Africans in Israel.

https://en.wikipedia.org/wiki/Beta_Israel

Now it's true that the government is dominated by people of European ancestry, but that's not the same thing.

[–] TheDemonBuer@lemmy.world 3 points 2 weeks ago (1 children)

It would be best if there were a global union of nations, maybe one with the authority to oversee and manage global trade, as well.

[–] HK65@sopuli.xyz 4 points 2 weeks ago (1 children)

We can barely get the EU to point in the same direction, good luck with that. Would be great though.

[–] TheDemonBuer@lemmy.world 3 points 2 weeks ago

Yeah, it doesn't seem likely.

[–] HK65@sopuli.xyz 8 points 2 weeks ago (1 children)

Sounds like you want the gold standard back.

[–] TheDemonBuer@lemmy.world 3 points 2 weeks ago (1 children)
[–] HK65@sopuli.xyz 10 points 2 weeks ago (1 children)

What is the difference between the gold standard and a neutral reserve currency?

[–] dejected_warp_core@lemmy.world 0 points 2 weeks ago (1 children)

A hypothetical neutral reserve currency would be a fiat-style monetary system. It would also require some kind of central bank and governance over it. It's not impossible to achieve, but the politics around such a thing would be impressive to behold.

Also, I doubt the US would embrace either before seeing the dollar crash. It would take too much power away from the Federal Reserve, and by extension, global leverage.

[–] HK65@sopuli.xyz 2 points 2 weeks ago

The reason for fiat was to take the power of setting global monetary policy from people who had gold mines and give it to people who had big economies. At that time, it was the US because they didn't fight WWII on their own soil, which was unique at the time.

Realistically, if the dollar crashes, it is in nobody's interest to go to anything than the next biggest currency, likely the Euro. Except for the US of course, but what are they going to do about it? Start wars?

They will definitely do that.

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