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What about a % tax where the % of the money that people have is used by the government to spend on infrastructure. Do u think this will prevent people from hoarding money?
Here’s what you do. Sketch Robert Mugabes face on a Post-It note, write ONE TRILLION DOLLARS and there you go. Granted, it’s worth four times as much as the One Trillion Dollar Note.
Had an argument with a guy on Reddit a month ago on this very topic, On r/bitcoin subreddit. My point was wealthy individuals and institutions will have monopoly over the 💰.
@@bingybingy2592 usually dehydrated for preservation, then powdered for easy reconstitution with water/adding flavor. Store in an airtight, waterfree, and deoxygenated container, it will last a crazy-long time. Obviously there are canned cheeses or shelf-stable cheese spreads that can last decades, but if you want centuries? Make it a dry good. Goats are like a hybrid of latinum and radioisotopes. One needs proper packaging for storage and ease of regular exchange, the other decays over time, but has the possibility to create lesser isotopes that also decay over time.
@@oldgus01 Hi Never heard of dehydrated cheese before, learn something new every day Thanks How about this lol ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-Hz1JWzyvv8A.html
FUN FACT: I remember when Italy went from Lire to Euro. Just for a better explanation, Lire were counted by the 1000, which means that we had 1000, 5000, 10,000 Lire notes ect.. 1 Euro was valued at almost 2000 Lire, the smallest coin was 100 Lire and was worth almost nothing. When Euro was introduced, many people didn't know how to adapt, (or count) so for something that costed 5000 Lire, the price was changed to 5 Euro (almost twice as much). That was super common to see, and I clearly remember at the end of the first month, when everybody was getting their first pay-check, those money were obviously correctly exchanged, which felt like everyone's salary was cut in a half. It also meant that, even though their net worth didn't change, the number of Billionaire in Italy dropped considerably. Thanks for reading! 😊
The same happend in Germany 1 Euro was 1.955 Deutsche Mark. While the people earned the same amount as before (just divided by 1.955) the Shops etc. used it as an opportunity for a price increase. So people felt like their spending power cut into half. And the politicans shrug their shoulders like nobody could anticipate this from happening.
No no its not like that , Italy was still using traditional lira a bit like Japan with the yen and France in the 60's or something they never got to modernising their currency by shaving a couple of zeros . For instance 1 french franc was worth 200 lira but in reality it's 1 franc=2 lira you get the jist ?
This might be a weird question, but would it be possible to explore how some of the other "multinational currencies" like the Central African Franc and East Carribean Dollar, and how/whether they're different to the Euro in any fundamental ways? I'm well aware they're not as widely used or accepted as the Euro, but they seem on a very surface level understanding to be similiar "projects" with regards to currency. Enjoyed the video btw, as always. Thanks for continuing to release these so regularly.
Those currencies were really setup by former colonial powers like France and the Netherlands as a way to ensure the continued reliance of their former colonies on the colonial power. The CFP France and Caribbean Guilder would be tied to the currency of the fotmer colonial power through fixed conversion rates, thus locking these newly independent nations into the economic system of the old empires. Quite clever actually. The British also did this, though not as overt with the now defunct Sterling Zone that existed for many years after the British Empire fell.
Caspian Report made a video about a year ago on the Central and West African Francs, and their effects on the countries involved - ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-42_-ALNwpUo.html
@@mlc4495 The Caribbean Guilder is different from the Eastern Caribbean Dollar. The EC Dollar is used by OECS countries which are all former British colonies. However the EC is pegged at a fixed exchange rate with the US Dollar, so any fluctuations of the US$ are matched in the EC$.
When I was in Singapore in November, 1 Canadian Dollar was about 1.005 Singapore Dollars (or vice versa, can't exactly remember). It was great not to have to do mental gymnastics when figuring out how much stuff cost.
sure, until the Canadians intentionally devalue their dollar. In my 25 years to traveling there on and off again, the US dollar has gone from a little over 1 Canadian dollar to 1.4 Canadian dollars. It's a way they get rid of government debt, BTW. In comparison to the Singapore dollar, in the last 10 years, the Canadian dollar has ranged from 1.28 SGD to 0.99 SGD. That's a 30% difference.
@@aeroeng22 Not exactly, they do it to increase exports to the US and attract US businesses to set up factories in Canada. It has nothing to do with debt. Canadian Debt is in Canadian dollars and taxes are also paid in Canadian dollars how does changed the exchange rate help them in any way. The real reason they are doing it is to steal American Jobs, knowing the Americans will blame always it on Mexico and China
The main thing preventing me from shopping online in most other countries is the not the difference in currency. Its the tax barriers and the hassle of declaring those taxes and so on. Paying in another currency is really a small hindrance compared to the import taxes that are not worth dealing with just to be a few items.
Regarding small communal villages being great, one important reason why: they don't have to rely on barter. Because everyone knows everyone else, they can use reputation and favors as their medium of exchange. This is in fact how humans evolved, to live in communities. Barter is a relatively recent invention that is only necessary when trading with someone you don't know and don't expect to have an ongoing social relationship with them and all of their friends and family.
The economics of slavery isn't that hard. Its not much difference from the economics of farm animals like plowhorses and oxen: As long as the work you get out of the "livestock" is greater than the cost to purchase and maintain them, you get richer. Of course "maintaining" people tends to be costlier than animals since people tend to have social and emotional needs that animals (particularly the type of animals we use for farming) tend to be less interested in, and people also have a capacity to organize and rebel if the oppression gets too bad, which animals rarely manage to accomplish. The other side of that coin of course is that people can also do a significantly larger amount of jobs than animals, so there's a balance to be had there (as there usually is in any economic theory.) And obviously, I'm completely ignoring the morality of slavery here. That's a whole other problem, but it doesn't really affect the economics of the practice.
altrag you’re missing the important point. Slavery impoverishes and limits the economy. Besides the slave holding class and associated businesses like merchant ships everyone else would be worse off. Slave holders would have incentives to buying more slaves and land to fuel the good the slave holder is trying to make or grow. Additionally, the influx in “free labor” in many sectors would greatly lower wages. Lower wages would mean lower taxes collected at the state and federal level. The country would have worse infrastructure and schools which would produce lower educated workers that can’t find lower skilled jobs because of slavery. It’s a self defeating cycle and it’s why (I’m not getting into a civil war debate) the Confederacy of America had a significantly worse infrastructure, banking, industry, shipping, and education system compared to the Union.
Hey EE! Would you be interested in making a video about corruption in general? Types of corruption, how it affects economy and business, how governments can fight widespread corruption, some historical moves that greatly reduced corruption, some that tried but failed miserably and so on... I think that would be very intereting as it is tightly connected to economics, a constant topic in the news of all (free) countries and yet we never hear how to effectively fight it. Cheers!
I wouldn't want that personally, I think it would be out of scope. There are other channels that are more versed on government and social psychology - I just don't think economics is the right lense to look at corruption with.
Pity tje economics of global corruotion destroys more kf globsl south while enriching those holding the corruoted wealrh of these nations in ghier private secrect bsnks,( no facta no fiu) yes gjink credit suiise eu usa arabs singapore etc. Transparency intl deals with glibsl corruption but not from an economic persoective. Anticcruprion me
@@vincenttjia Crypto currencies don't have to be decentralized. If anything Libra is like a fiat currency where FB takes the place of the state. It's a bit of a joke now, but just wait until Amazon decides to step into the currency game. And no, I don't think this is a good idea.
There's a lot of debate on whether barter systems actually ever existed. You're absolutely correct that bartering is a very inconvenient system, which is probably why they never existed. It seems that most non-currency based economies were actually gift economies. Could you do a video on gift economies?
@@A22by7 Hey Ananth, fancy seeing you here. D+H is kind of boring at the moment because of the lockdown, and because I'm mostly fixing live issues and writing RCAs. How are you doing?
In this story there’s never the question of time. Why would someone have to pay back immediately? Credit exists today why wouldn’t it have existed before? But it never seems to be included when discussing barter.
They existed in special circumstances where gold or currency existed, where people knew and understood the existence of money but did not have access to it. Prisons for example have people using cigarettes to trade for other things but this is in a context where people know about money but don't have access to it.
I'm Canadian and I'm used to my currency basically being Northern Pesos. If you're Canadian and you got a job in the US, you're making a giant bonus due to the conversion alone. For some reason employers will pay same in the Canada and US; an engineer could make 60k CAD in Canada and have the same job where he/she makes 60k USD in the States, that's 80k CAD!
I've heard of this before, although the exchange rates were closer. On the other side, back about 1973 my parents and I drove to Canada on vacation (from the US), and when we paid US$10 for a meal, we were asked for an additional quarter because the Canadian dollar was worth almost US $1.30 at the time
That is why so many Canadian professionals go to the U.S. to work. Salaries are higher in numerical amount, beyond just the exchange rate (e.g. $60000 CAD vs. $80000 US), plus taxes are lower and everything (except medical care) is cheaper. Canada pays more for minimum-wage jobs.
But it isn't necessarily malice tho. How can you trust your monetary policy to some entity that for all you know could be more corrupt than your institutions
@@roboticrebel4092 Depends on how you look at it. At the level of the individuals in the organization or the whole organization as a single entity? Every organization perpetuates itself. The individuals might be well intended and believe in their work, but the whole might have negative results for the rest of the world. In a similar matter Is a kid playing with a gun and shooting someone malice? So my answer would be, no one should be trusted with such amounts of power. Just go back to a gold standard or an other form of backing and make fractional reserve banking illegal. It was fraudulent from the beginning and it still is.
You touched on "friction", i.e. the transaction cost of dealing with more than one currency. In the digital age, I think the trend is definitely towards reducing friction, which means dealing with multiple currencies will be less and less of a hassle over time. This, combined with the "How do you agree on who controls it?" problem, practically guarantees the cost of a universal currency will outweigh the benefits IMHO.
I heard they used some sort of debt in trading, which means that debt was invented before money. Is it true or just another bit shrouded in myths and legends?
Indeed this will end cheap labour in Southern Asia. On the other hand though, will this decrease global Gini coefficient and thus increase global wealth? It's a hard thing to determine the distribution of wealth across the globe. Especially if all the Gini coefficient data is only measured in countries and not in regions/continents. However, if everyone is getting the same currency and also minimum wage, I can imagine this could be a big boost to the poorest regions in this world.
@Teringventje I agree that is a big fallacy unsupported by any respected peer reviewed research. The most clear cut research seems to indicate wages would slowly rise but goods and services would skyrocket decimating the weaker economies. A very grim picture indeed
Those are the street shops in Kathmandu, Nepal where he was talking about bartering. We have a currency called Nepalese Rupee though in which we trade!! 😉😉
The Greece Germany roommate analogy fails on several key points: 1. Greece didn't _just_ happen to lose their job. They had been living above their means for decades, which then all came crashing down when they lost their job. 2. Greece didn't spend most of their money on communal expenses with Germany. They spent it on internal expenses in Greece(bloated public sector, extremely generous pensions, etc) in order for successive governments to get reelected. 3. When Germany(through the Troika) did force Greece to adjust their spending to their earning and sell the TV(publicly owned ports, etc), the opposition to this from Greece was massive enough to propel previously unheard of Syriza into government by promising an end to austerity.
Yeah, it was disgusting how Greece absolutely-stubbornly-repeatedly refused, wait, just could not consider spending less and kept expecting bailouts as if that was the natural order of things. But then, they lied their way into EU budget compliance in the first place, how likely were they to behave ?
ocadioan greece is a rich country. a homogenized superimposed money system destroys this richness. the euro needs to end, it destroys local and national cultural diversity. this is valid for every country in the euro zone. they either let go of the currency, or face cultural annihilation. the migration pact will do the rest. for real diversity to flourish, strong borders and isolationism are required. the EU is a devilish destroyer of diversity, and their racist programme of importing and race mixing indigenous populations is beyond nazi scum level.
ocadioan what’s often not mentioned is Germany’s surpluses are the inverse of other nations deficits. Germany feels morally superior to countries like Greece, but it was these deficit regions that sucked up German exports. The main failure of the euro, and there were many was not to create an automatic surplus recycling mechanism. The Germans had the euro forced upon them by the French, who feared a reunified Germany dominating the continent. Without a tightly knit federation to spread the surpluses, Europe is destined for decades of misery.
No, Germany lent Greece and Italy huge amounts of money to hide the diverging exchange rates in order to join the currencies and pretend they weren't breaking the rules precisely because doing so gave their industries an advantage when exporting. Italian and Greek governments went along with it because they saw their borrowing cost coming down to be able to share their currency with Germany, allowing tax cuts for the rich without affecting services for the rest of the population until it would be too late for them to do anything about it. The idea that it was the Greek people's fault is just what you're told because it makes you be okay with what was done to them, when before the Euro, they actually had the highest savings of any people in the future EZ.
@@mirzaahmed6589 It was the richest country on earth at some point, and probably the first to deal with wealth issues. Also, the term is coined in the English language, and the UK was a rival of the Netherlands. There isn't a similar term for it in Dutch.
@Rajeev Vij It's a joke on world politics. For example Taiwan isn't considered a country because China considers it a part of its territory. Same goes for plenty of other countries in the world which are disputed by other countries... world politics is a mess...
Well you know, that's the way it used to be. Do you know what a "dollar" actually refers to? It refers to a certain amount of silver. So for instance the original mexican peso was "a dollar currency" meaning it was backed up by the same amount of silver as the US dollar was, and the same amount of silver as the Australian dollar was, and the same amount of dollar as the Canadian dollar. There wouldn't have been any fluctuating exchange rate between these countries, because they'd all be "dollar currencies" and they would all stand for the same amount of silver.
Meanwhile China and other nations are so long tired of USA over their printing out an estimated five hundred billion dollars, ($500 BILLIONS) worth of FREE DOLLAR BILLS, and circulating them into global currency & banking market EVERY YEAR. Since U.S dollar being a global currency, good old USA is taking advantage as much it can. Web link with 4 million views explains it all at, blog.chinadaily.com.cn/forum.php?mod=viewthread&tid=1795128
@@olefella7561 Nobody can print the Trillions out of thin air if we have WORLD CURRENCY! By the way, blog.chinadaily.com.cn/forum.php?mod=viewthread&tid=1795128 is so very informative link. Thanks man.
As all world wealth KPIs such GDP nominal or GDP per capita are counted in the USD as well as all the debts hence the cheaper the USD the wealthier the world will be. For example 1. GDP per capita In Iraq before Saddam was hung 1 dinar = USD 3.2. Meaning if Iraq GDP is 11K dinar, in Saddam era it was USD 35.2K. But after Saddam was hung 1 USD = 1100 dinar. It means Iraqi GDP per capita will only be 11K/1100 = USD 10. Where is the remaining of USD 35,190? 2. Debt Let say Iraq has foreign debt of USD 1 million. In Saddam era it was only 300K dinar. But after Saddam was hung it went to 1,1 billion dinar. What a spam!
David Graeber's book Debt: The First 5000 Years, argues that the idea barter came before money and credit is a common myth and isn't supported by the historical evidence. It made a pretty convincing case imo
Of course barter was around before money, but you seem to have missed the point that SOME physical method of denoting the exchange of value is an eternal feature of human societies.
To answer the begged question right at the start; "Give me control of a nations currency and I care not who writes the laws" - Nathan Rothchild, Govenor Bank of England. Setting up a global currency monopoly would be the most stupid thing imaginable.
This comes under the very silly assumption that a single person or group would be allowed to dictate production and distribution of that currency, and would also be allowed to dictate the trade of that currency. Even hypothetically, neither of those things would happen. No single nation will ever be so universally trusted as to be given that kind of power, and no alliance of nations has ever been powerful enough to seize such power by force or diplomacy. While you're technically correct that the impossible scenario you've concocted would be stupid, there's not even a precedence to suggest such a situation can happen. The power displayed by the UN should be more than enough to quell any fears a person has on that matter.
@@dontmisunderstand6041 EU anyone? a pan-national body with the right to create and distribute a single monopolistic currency, via the ECB, across the whole of Europe. Just think EU, but bigger, theres plenty of push in international diplomacy circles for just such a thing. I think you need to look a bit harder at the world., the EU is exactply the precidence you think doesnt exist.
It would be amazing if you would do a video explaining the Central African Franc, especially how it works between France and the African countries that use it. I am an American living in Cameroon and hear many opinions on this and am curious to hear your take on it.
Very diplomatic; neither the Italians nor the Germans can be offended by this example. Italians because it makes them feel fine - and they do have very nice cars. Germans because it is so laughable that they realize it is simply diplomacy.
This is actually an interesting thought if you think about how in an a sci-fi intergalactic sense Earth would would need to become essentially one nation in a way as a planet. Or how in Scifi settings there's intergalactic currencies such as credits in Star Wars
So, basically the US dollar as it is today. As a Canadian, I bring US dollars everywhere I travel, since only a few people want my country's currency but everyone accepts US dollars almost anywhere I go.
Closing statement : "No country in the world is going to give up their sovereign power that managing their own currency gives them", except all the ones you mention earlier in the video who did?
@@uhohhotdog Their bill will come due and they will pay the price, one way or the other. The Chinese import a lot of their food and fuel so when their *external* income starts to fail .... you do the math.
@@bobjacobson858 In early times people used salt to preserve food without refrigeration. Lots of it, so much that it would be way too salty even for bacteria.
Congratz, 500.000 subs! Strangely youtube stopped recommending your videos 2 weeks ago, even though i watched all new ones immediately. Super strange, anyone else experienced that?
The problem with having one currency worldwide is that it would be controlled by one group of decision-makers, and if those decision-makers make disastrous decisions, it affects the whole world. not just their country. Decentralization of control (meaning competing currencies) is better at ensuring that we don't have a worldwide collapse of the economy, especially if you allow people to hold more than one currency easily, which diversifies their holdings and wealth.
I think if the US economy collapses that it will drag Europe and China with it, who in turn will drag the entire world into an economic collapse. If anything I think a global currency would be a lot more stable.
A Bitcoin/cryto standard would just be like a return to the gold standard, except the money (Bitcoin/crypto) would be easier to secure, transport, verify, etc.
At-least your stash in gold is safe, and it has value as a resource if nothing else. Bitcoin's title of king could be replaced by another, no one knows what will happen. Until some crypto becomes the obvious winner and is adopted in shops everywhere, I think it would be safer to store value in gold. It wont be Bitcoin that wins either, unless somehow they manage to make its transactions instantaneous. I think Bitcoins argument as a store in value is moot too, as when a crypto is eventually adopted everywhere for transactions, its value would zoom past Bitcoin's, and because its widely adopted it would be a more stable store of value.
Simply no. Bitcoin is set up in a way that it needs to use more and more resources just to keep running. Also, as long as you use gold as cash, you don´t need veryfication at all.
@@antyspi4466 I don't agree with either statement. (1) Bitcoin mining difficulty fluctuates and doesn't just go up. New mining hardware comes out often, which causes a decrease in required electricity to mine Bitcoin. (2) There's plenty of fake gold, so if you accept it as cash and you don't verify it, there's a risk what you receive won't be gold.
I loved the explanation about Greece and Germany being forced to share the same apartment when they don't have the means to support the same standard of living. That metaphor finally made the challenges European countries are having with the Euro click for me - thank you!
The explanation straight up fails at three key points: 1. Greece didn't just happen to lose their job. They had been living above their means for decades, which then all came crashing down when they lost their job. 2. Greece didn't spend most of their money on communal expenses with Germany. They spent it on internal expenses in Greece(bloated public sector, extremely generous pensions, etc) in order for successive governments to get reelected. 3. When Germany(through the Troika) did force Greece to adjust their spending to their earning and sell the TV(publicly owned ports, etc), the opposition to this from Greece was massive enough to propel previously unheard of Syriza into government by promising an end to austerity.
@@daegan_ftw But having more power makes it easier to do things that you would otherwise not do, which leads a person to do more. And absolute power would tend to corrupt to the most extreme levels (as stated). Imagine random people being given the authority of a king. Some might do well, most probably would not. And most assuredly, over time, most would probably end up being more corrupt individuals than they ever would have been if that was not bestowed on them, unless they were extremely diligent not to take such powers to heart.
Government corrupts. Each and every organization, business, movement, ect.. that comes into contact with government begins to become corrupted. The longer and deeper the government gets into that business or industry, the more corrupt it inevitably becomes.
@Fllamber No single group can seize control of gold... since it needs to be physically mined in multiple locations and the amount in circulation vastly outstrips annual supply. Plus, you can't print it into oblivion like what's happening right now. The gold standard was used for centuries, and abandoned. I don't see why crypto would be any different.
@Hoyt Volker Because giving a tiny group of people a monopoly on the medium of exchange would give them the ability to decide who gets credit and at what rate.
Or a centigram of gold. Bitcoin and precious metals are equally convenient in terms of fungibility and divisibility, but when the lights go out, bitcoins evaporate while the metals remain.
@@genegreigh8782 maybe if they went out world wide. If not I’ll go to the mall and charge my phone to get at my Bitcoin. I’m not preparing for the apocalypse I’m preparing for the future and betting they aren’t the same thing.
i live in Iran and during last 2 years sanctions and varies economic problems has shrank our currency value to the extend that price of a USD or euro has grown over 300 percent. yesterday it grown by a 10 percent in one day if this trend keeps going then we will son become another Venezuela
US sanctions ruins people's lives. The US has probably indirectly killed more people than any recent war because they want to police the world and impose their ideology on everyone else. People are starving in Venezuela because of US sanctions. Cuba and Iran are suffering because of US sanctions. The innocent people are the ones that suffer the most.
@@brianmerkosky9243 altho government and society don't make it easier either in a hard time like this people tend to take care of themselves first regardless of its impact i would love to be able to just blame a government wether its US or Iran but the fact is its just our nature people as individuals and as a society are nice and cooperative to each other as long as its convenient then every man is for himself
@Rick K dude during last 3 years we began a revolution every year sometime multiple a year they all ended with a lot of dead body and people in jail then people made some joke about how miserable we are and then we move on
@@EconomicsExplained I think I was one of at most the first 2 or 3 people to press on the video. However, I took one second to many too be the first commenter.
Hi, Economics Explained. Want to say a big thank you! You are doing a great job and I am happy to see such good quality on RU-vid. Let me try to give ya some feedback. Seems like you are using the covid situation and trying to get a new audience but creating lots of new videos (can't really complain about that). However, I know that most of the topics you are presenting, need a great time to research, to analyse, reflect, and explain. And it seems to me that you are compromising on something. I am new to this channel and might be wrong, or maybe I saw some really cool videos and expect others to be the same "level", in any case, I believe you can and should do better. While I watch the video, I carefully listen to the introduction and your arguments, but "just touch the surface". I, and o lot of your viewers, would like to hear something in more depth, would like to learn new terms, and understand such topics more profoundly. Again, your team is doing a GREAT JOB! and this is why I believe you can make it even greater!
2:50 - Bettering was never a popular medium of exchange, it was only done between tribes or participants who did not new each other very well. Most transactions in pre-mordern world were actually done by the system of "credit", you give presents and "favours" in exchange of presents and favours of the other party in future.
Great video overall, however I would assert that economies never operated on barter, and that economists rewrote history to suit their narrative. The case is made more completely by a book called "Debt: the first 5000 years". The short version is that ancient economies were either gift economies or operated based on a record of debts rather than a barter transaction which closed immediately. If you think about it that's common sense too, even this video points out how unworkable barter is as a way for an economy to operate.
Countries with a trade deficit need to be able to devalue their currency in order to boost exports. That's why South European countries are running into trouble at the moment.
if everyone were to behave like ireland the latter would have no wealth, you are right about the savings but you also have to consider that devalueing the currency is a forcing hand on the trust of the savers, basically you wouldn't store money as a saver rather you would invest it in some sort of asset making the economy really mobile again, financial crysis are for the most a crysis of trust for the people to move money
@@santiagopuentep dude China's central business strategy is massively devaluing their own currency. It's a valid strategy that has worked time and time again.
It's a strategy that helps and has worked but it's not a requirement. It's more like a lazy way of laying down work for tomorrow. An even better off idea would be to merge some of the competing companies to incorporate less profiting ones in more profiting ones and increase specialization in the Union. This would also work towards solving the problem with the competition coming from Chinese and American giant companies. While not strictly inside Europe, the italian FIAT merged with the American Chrysler to form the FCA and last year a german and French rail construction companies tried to merge into one(though anti-trust stepped in). The idea here is to mirror the way competition works inside the singular countries to avoid this problem. Of course the problem becomes big companies vs local businesses and this isn't the only solution but the general point is that while devaluation works it's a short term, kind of weaker option to solve economical problems.
@@santiagopuentep I don't see how that contradicts anything. Just because devaluation has serious consequences doesn't mean it can't be an important tool in reviving the economy.
Before watching this, I will say that if the EU is having problems with a single currency, how would the planet full of drastically different economies and stages of economic development be able to use a single currency?
It is simple. The problems of having a single currency are different from, and in most cases, smaller from, having separate currencies. Greece may have it tough because of fiscal irresponsibility. Check what how other irresponsible countries with their own currency are doing. Argentina, Venezuela, Zimbabwe (remember that 100 Trillion dollar bill?). Responsible governments will do fine with or without a single currency. Irresponsible ones will suffer. With a single currency, they will suffer a bit less.
The problems largely stem from using a single currency over multiple sovereign political entities, and the political problems that arise from fiscal transfers, real or perceived. All countries have more and less productive/efficient regions, and fiscal transfers within a given country rarely cause the controversy of relatively frugal N European states being expected to subsidise more profligate S European ones (Spain with the the relatively richer Catalonian region increasing being unhappy about paying for the Castilian regions being a good counter-example here). Obviously, the long term solution is to get rid of the political borders, forming a single larger state, so no longer will Germans be unwilling to bail out spendthrift Greeks, but instead some Europeans will be pretty OK with a larger share of the national pie going to less developed regions of their own country, if only so they can get on with paying a larger share of taxes, helping everyone. Of course, there are a few wrinkles in that notion, starting with persuading all (or enough) Greeks AND Germans that they all actually want to be "Europeans". The same applies to the world as a whole, eventually, one day, it needs to be unified as a single planetary state. Both will take some time though...
Have you looked into stable coins and DeFi? Price stable decentralised tokens and publicly auditable reserves administered by smart contracts on-chain solve the problems you mentioned in the crypto part.
@@1greenMitsi please educate yourself before making stupid comments. Nearly 2 billion dollars (as of July 2020) within an ecosystem of fully transparent, automated and auditable financial mechanisms. See defipulse.com/ - posting this just to educate.
ducats were precious metal coins used in europe of HRE times primarily for the purposes of international trade, so they aren't "international currency" per se, they're just the same gold/silver in the form of a coin..
Your analysis about Cryptocurrencies like bitcoin is absolutely correct. A capped currency doesn’t solve any problem. When you also take in consideration, that with any transaction the blockchain becomes larger and therefore the mining costs go up, bitcoin is just a big bubble. Of course the mining costs are more influenced by the miners competition at the moment, so you expect many small minors pushed out of the market and only the miners survive, who have the lowest cost of electricity. This consolidation makes the blockchain susceptible for manipulation. This is what ultimately destroys Cryptocurrencies like bitcoin. But still I see very big potential in the technology of Cryptocurrencies. There are some critical aspects which need to get fixed. Some people point out Etherium as a better Crypto. An authentication via proof of steak rather than proof of work has many advantages. But there are more essential feature our perfect Crypto must have. Hedera Hashgraph claims to provide an instant authentication process and the data is constantly hashed/computed, so that there is no big data agglomeration as with the blogchaintechnologie, whilst providing the same amount of security. I am no mathematician, so I cannot really confirm these statements. But an improved technical Standard where old data is shortened and authentication times are lowered significantly is also essential. The last point is of course the control of money supply in the system. As you pointed out in the beginning a fractional reserve system is not viable. Like libra, the Crypto from facebook, the amount of currency can be attached to financial assets. But libra is centralized, which is reluctant to our initial idea of Cryptocurrencies as decentralized currencies. So the solution to this dilemma are policies which are programmed into the system. We could keep track of the amount of goods and assets in the system and therefore keep track of inflation or deflation. We can control these parameters by giving out helicopter money or detroying money of the accounts. We could build in marketplaces and smartcontracts in this Cryptocurrency like in Etherium and it would make taxation easier for governments because we could build that in too. It would be a Fiat currency with such transparency, that it could last very long. Of course there a still some problems with my proposal, because in all of history there was no lasting fiat currency, but this could be a step in the right direction.
@@isayahdurst9330 Thank you. Because it is such a long comment it is difficult to get traction. I hope the team of EE will still see it. If you have anything to add or find any ambiguities, please point them out. (I am not a native English speaker, so there might some unclear phrases I have used) Plus every subcommand will improve the ranking of this comment under the video.
The mining cost is *intended to* go up. That is by design and no that doesn't make it a "bubble". The purpose is to prevent devaluing the currency in the long term by restricting the supply of currency.
Agreed with most of what you said. It will be a bumpy road in transitioning. But a required one nonetheless, for a truly globalized world (not funny business-colonialism). I think the biggest barriers are not technological or theoretical. Those are already being solved or have been solved in a way by different concepts and ongoing projects. The real barrier is an older one: greed. The way our financial systems work at the moment are neither transparent not balanced. These two will always tried to be manipulated as long as they are within the reach of a group of people or a few individuals. I guess we will settle with new and 'better' based on competition. But here i see the boundaries of Countries & Businesses getting blurred even more (as historical trends show).
As all world wealth KPIs such GDP nominal or GDP per capita are counted in the USD as well as all the debts hence the cheaper the USD the wealthier the world will be. For example 1. GDP per capita In Iraq before Saddam was hung 1 dinar = USD 3.2. Meaning if Iraq GDP is 11K dinar, in Saddam era it was USD 35.2K. But after Saddam was hung 1 USD = 1100 dinar. It means Iraqi GDP per capita will only be 11K/1100 = USD 10. Where is the remaining of USD 35,190? 2. Debt Let say Iraq has foreign debt of USD 1 million. In Saddam era it was only 300K dinar. But after Saddam was hung it went to 1,1 billion dinar. What a spam!
Bitcoin miners push down its price by selling to pay mining hardware/electricity/facility bills. HEX stakers don't. Staking HEX is like getting free mining hardware and electricity.
Example for students as myself: So you have been assigned a project with 26 other guys (that's alot lol) and you end up getting 3- /C- because Greece didn't do his part (if he were alone he would have gotten 5/E and would thus try harder.
If we can eliminate human conflict and get rid of the capacity for corruption that would come with holding a death grip upon the world's financial supplies. And overcome the other downsides and risks. Space won't change that reality anymore than that pretty new iPhone.
The engine example worked well to explain currency exchange rate risk but avoided how no German money would leave Germany with the introduction of the Euro. Instead debts & credits would be raised via the Target2 system. A video on Target2 would be good.
Hey EE here's a quick question: why has Estonia been doing so well economically compared to all other post Soviet countries? Just wondering (Also you could actually write an entire video on this probably idk I'm not an expert unlike some) (cough)
In general, the Baltic countries have been _far_ more aggressive with their reforms to get away from Soviet era policies than many other previously east-block nations.
1: The drawbacks of having a single currency, is that some nations will loss financial autonomy. 2: By some political guy doing a announcement about a single currency 3: The advantages is that will stabilize the currency, facilitate the market expansion
Questions: 1- The drawback of creating a universal currency is that it would be very hard to get rid of all the different cash and replace it with a new one. The economic condition is also different in different countries. 2- It would be quite hard to announce to every one that a new currency has been made. Also start using this new currency would create some problems. 3- In my opinion, it is worth it because all the money in the world would have the same value and maybe life would be equal to some people. But it has many disadvantages.
What are the drawbacks? - One of the drawbacks is that tge currencies of some places are more expensive conparing to another how would it be rolled out? - with help by government, by people that have more power about the rules Is it even worth doing? - I think Yes, because will facilitate for everyone and will be more simple to travel
1-Some drawbacks are: Lack of a strong Federal Government Two speed savings Abolished Independent Monetary Policies 2-Could be implemented by the government, which is the authority 3-Yes, because it has an elimination of exchange rate fluctuations, it has a lower interest rate and a increased cross-border trade
1) One of the disadvantages is the price, because some are more expensive than others like the dollar and the real 2) For the government, as the president 3) Yes, because it would make it easier for everyone, because it would be a single currency
Some missing points - 1. A world currency could eliminate the balance of payment problems that plague the dollar reserve system. Nations trying to exercise a world reserve currency face the problem of having to favor importation to flood the world with its currency. This leads to capital flight in the form of offshoring manufacturing jobs and the resultant unemployment and erosion of domestic skills force, for instance. See Triffin's Dilemma for more. Additionally, the trade imbalance can cause the host nation to have a credit crunch when foreign lenders refuse to purchase the nation's treasury holdings out of fear of default from the diminishing industrial base. A central bank debt-monetization scheme would be required to prop-up the currency, at least temporarily (much like the QE and "Operation Twist" programs we have seen). 2. A world currency simplifies the task of distributing wealth and jobs in the case of a one world government. As an example, future headaches associated with assuring citizens have access to savings, loans and jobs are exacerbated by currency wars -- where countries competitively devalue their currencies -- and speculative attacks -- where investors rapidly sell a currency, leading to rapid devaluation. These events can destroy the savings of individuals and their ability to borrow to maintain a business or lifestyle. A single currency would end these abuses, allowing an ultra-national body to systematically apportion the placement of jobs across the globe and set fair wages that reduce inequality, as apposed to the haphazard rearrangement of jobs in low wage countries. Bretton Woods rules for fixed exchange ratios are only a first step in dealing with the problems of multiple currencies.
What if the world adopted a universal currency alongside their national currencies? That way people could choose which currency to use for a given purchase. That might take away some of the issues that Greece faces with the Euro (if they’d also reinstitute a national currency in this case). Idk what problems would arise from such a system but would be interesting to analyze?
Its also not a fair comparison since the US has divisions of a dollar (ie: cents/pennies.) The correct comparison against currencies that don't have divisions like that is against the cent (the Japanese yen is another such example.) So assuming APC219's numbers are accurate, you'd be measuring one US cent = ~20 lira and while that's still a pretty large exchange rate, it doesn't look anywhere near as bad as when you try to put dollars and lira on the same scale.
@@dumitrache12 Many currencies used throughout history have failed. The only ones that have never failed are Bitcoin-style cryptocurrencies. Emotion is clouding your judgement.
Imagine that you work hard and save enough to buy 100 bitcoin. Now a certain group comes along and buys a whole lot of bit coin with their fiat currency (that they didn't work for, they just printed it) what is the value of the bit coin?
I think it would be better to minimize the types of currencies in the world instead. So like instead of +180 different currencies we have ~10. This might help against corruption, favoritism, and punching developing nations/ nations in a crisis from absolute demise.
Good video and interesting implications re global currency. It would be good to address the issue of barter. It's an interesting counter-point in explaining the role of currency but is not necessarily the historical prerequisite to currency. I think there's more evidence of barter systems in societies were currency fails or where it is otherwise not available. Also the role of French and German banks in bond purchasing would be good to highlight too. Where your roommate keeps giving you money at an irresistible interest rate hoping for long term returns.
