Should the USD be abolished?

[JamesL]

Quote from Debaser82:

People say it makes no (economic) sense at all for a Greek farmer and a German factory worker to share the same currency.

It's an supposed anomaly that benefits neither the Greek nor the German.

Why does it makes sense for an Alabama farmer and a New York banker to share the same currency?

Only because they both feel 'American'?

This Alabama/New York is a stupid premise. Why just Alabama farmers? What about upstate NY farmers? Or how about Long Island wine growers? After all, it is 2 different economies.

We use the same currency because we all are governed by the same federal system. And the US dollar is the by product of this federal system. Greece and Germany and Ireland are not of the same federal system. They have their own sovereignty and there-in lies the conflict.

 

[trefoil]

Quote from LeeD:

This argument doesn't stand scrutiny. Think of an export-based economy such as Czech Republic. With exports making 58% of the GDP and imports at 53% of the GDP the country has a free-floating currency that isn't closely linked to the currency of any of the major trade partners .

Exporters worried about exchange rate fluctuations hedge their revenues via long-term contracts and/or via foreign exchange derivatives.

R.C.'s point is valid: look at the US and Canada. But Canada having a different currency still gives them an advantage that Greece, say, no longer has vis-a-vis Germany. Canada went for a long time with a currency that was a lot lower than the US, and now it's up to around parity, which it had been for a long time back when I was a child. That time when it had a lower currency provided its businesses with a shield until things got better and now relative to the US they're doing quite well.
Your point is excellent though: for some reason economists seem to think that currency markets are uniquely evil. I've never been able to figure out why when there are all kinds of ways that have been invented to deal with differing exchange rates.
BTW, good summary of Jane Jacobs: http://www.zompist.com/jacobs.html

 

[Random.Capital]

Quote from LeeD:

This argument doesn't stand scrutiny. Think of an export-based economy such as Czech Republic. With exports making 58% of the GDP and imports at 53% of the GDP the country has a free-floating currency that isn't closely linked to the currency of any of the major trade partners.

I think perhaps the use of the word "linked" is causing a disconnect here. By "linked" I do not mean "pegged" - pegging is simply creating two essentially-identical currencies where only one is needed. By "linked" I mean there is a relatively transparent, more or less dependable mechanism to adjust the conversion between the currencies.

The Czech republic currency is intimately linked with that of its trading partners, otherwise nobody could count on getting paid.

Exporters worried about exchange rate fluctuations hedge their revenues via long-term contracts and/or via foreign exchange derivatives.

Hedging isn't free - the cost of hedging is generally inversely proportional to the degree of protection.

IMO, what you have in the EU is an attempt to peg a whole lot of currencies that should instead be linked by the currency marketplace. That is going to cause all sorts of problems, just as the US would create a whole host of problems if individual states were suddenly allowed to independently control, eg, import tariffs and immigration policy.

Which, if I read him right, is just another way of saying what trefoil is saying.

 

[Larson]

Quote from intradaybill:

Yes, there are many crackpots. The gold standard was a way of enslaving people under those who had the metal. Fiat currency is one of the biggest accomplishments of the free world. Of course, this does not mean that it must be abused. But these cranks do not understand that going back to a gold standard is going back to worldwide povetry levels.

Now, the motives. Behind the motives of those who scream for a gold standard is mostly a hidden Marxist agenda. Marxism is tautological to Fascism. The many are ruled by the few. The few have the gold and they are the rulers.

I say Bernanke has not printed enough. A slap on the face of Marxism and Fascism will be another 1 trillion. Inflation will transfer wealth from lenders to borrowers. This is effective wealth redistribution. It is funny that Marxist always align with Fascists in their war against democracy. The EU for example is a fascist state controlled by Germans. Chine is a Marxist (close to) state controlled by vicious oligarchs who put 7 year old kids to work for $1 a day.

USA is the shield against the monstrosity that EU and China are trying to enforce on the world and the USD is the means of destroying their plans.

What gold standard? I have not read anyone on this thread advocatiing a gold standard.
Is this post intended to be satire or do you actually believe this garbage?