Starglider wrote:Of course rich individuals and large organisations are used to dealing with multiple currencies constantly; liquidity sloshes around via direct FX, swaps, carry trades and liquidation of positions in multi-currency markets to whichever currencies offer a transitory advantage. You make a very good point though that only the rich deserve this privilidge, lower-class Americans would only make a fool of themselves trying to comprehend more than one currency and should be forced at gunpoint to use only Federal Cartel Approved (tm) FreedomNotes (r).
I have a lingering fondness for stability in my life savings. This may be a holdover from twentieth-century mores that should be discarded, but I do.
However, this desire for stability makes me very suspicious of what you are saying, assuming you are serious; I've lost the ability to tell whether you are or not when you talk economics these days. The reason for my suspicion is that I am not a professional currency speculator, nor do I wish to become one, nor have I ever for a moment thought I'd make a good one.
If currency speculation becomes par for the course in my country's domestic economy, I suspect that I will be harmed as a result, because I'm not good at it. This is not because I am stupid in a general-intelligence sense, it is because I have
no desire to be involved in finance. I never wanted to be a stockbroker or a hedge fund manager or even to work at a bank, or to do any of the many other things associated with a financial sector.
I should think most people around the world feel much the same way- they do not
want to need to become petit-financiers in order to hold on to their money on a month to month basis. Money serves them as convenient tokens of value; they produce value by doing one thing and consume it by doing many others. They are not really that interested in the financial mechanisms by which value-tokens are swapped for one another, folded, spindled, juggled, or spun around in elaborate games of three-card monte and disappeared off into dimensions unknown. They want to do other things with their life than juggle money- to make it and spend it, yes, but not to play games with it. That applies even to some very rich people who make their livings in areas other than finance.
The banking systems of the 19th and most of the 20th centuries evolved to let people do this. You could deposit your savings. The bank (or the regulatory agency, or both) went to great efforts to ensure that your money would still be there when you wanted it. Or that you could take out a loan if you needed it and were a good credit risk. There was a lot of shuffling and maneuver and investment going on behind the scenes, but as long as you simply wanted a safe place to put your money, it would be there.
As the global economy becomes more financialized, and especially if we try things like abolishing centralized national currency, I perceive that this will be in danger of going away. The average citizen will, as a matter of course, need to be on top of which currencies are doing well, and which are doing poorly. Some will succeed fairly well, others will fail and become impoverished, and the great mass of the middle will simply serve as another source of "dumb money" for the handful of professionals who are experts at extracting it a bit at a time, as an effective tax on their savings.
But this will introduce a new element of chance to the fortunes of the average person, just as expecting the upper middle-class to put their savings in the stock market did. Which I'm opposed to.
Am I missing something important?
-- Asuka
