Update: I noted previously (Update: The Prophetic Dr. Hoppe on the Rise of the Phoenix; below) Professor Hoppe’s prediction years ago of the inexorable move to a single, worldwide fiat currency. It’s coming. As reported here, “The dollar dropped after China’s central bank reiterated a call for a worldwide currency.”
See also Hoppe’s fascinating discussion of money starting about 1:05:17 of Lecture 3 of his riveting 10-part Economy, Society, and History lectures delivered in 2004, where he talks about the tendency on a free market of multiple “monies” to converge to one–by the nature of money, it’s more valuable the more widespread it is, etc. Hoppe notes that there is a similar tendency now, with fiat currencies, only this time, it’s bad, not good. He points out that the world had alreayd achieved free market unified money (gold); this was destroyed with the outgrowth of dozens of country-based paper monies, leading to a world in a state of quasi-barter; and now when the major currencies like the dollar, yen, euro, talk about monetary unification, they are moving back towards what we already had with gold, except without the relatively fixed supply and other salutary aspects of a commodity-based money.
[Cross-posted at Mises Blog]
Original Mises post; archived comments below:
The Prophetic Dr. Hoppe on the Rise of the Phoenix
Oct. 7, 2008
In Hans-Hermann Hoppe’s important article Banking, Nation States and International Politics: A Sociological Reconstruction of the Present Economic Order (Vol. 4 Num. 1) (published in 1990 in the Review of Austrian Economics; reprinted as Chapter 3 in his EEPP)), he notes one possible end-result of the state monopolization of money and credit. He notes the then-imminent rise of the ECU/Euro, and then predicts what might happen next: the combination of the three dominant currencies (at the time, the US dollar, the Japanese yen, and the Euro) into a new one-world paper currency (which might be called the “Phoenix,” say) run by a US-dominated World Central Bank. (We might add in now the Chinese Yuan, too.) With all the talk of the need for “coordination” among central banks to deal with the current crisis, and the anti-capitalist regulations that are sure to come, maybe the Phoenix is about to rise.
An extended quote from Hoppe’s paper is below.
With the European calculational chaos solved, then [by the creation of the ECU/Euro], and in particular with the European hard currency countries neutralized and weakened within a cartel that by its very nature favors more against less inflationary countries so as to protect and prolong U.S. hegemony over Europe, little indeed would remain to be done. With essentially only three central banks and currencies and U.S. dominance over Europe and Japan, the most likely candidates to be chosen as a U.S-dominated World Central Bank are the IMF [International Monetary Fund] or the BIS [Bank for International Settlement]; and under its aegis then, initially defined as a basket of the dollar, the ECU, and the yen, the “phoenix” (or whatever else its name may be) will rise as a one-world paper currency–unless, that is, public opinion as the only constraint on government growth undergoes a substantial change and the public begins to understand the lesson explained in this book: that economic rationality as well as justice and morality demand a worldwide gold standard and free, 100-percent reserve banking as well as free markets worldwide; and that world government, a world central bank and a world paper currency–contrary to the deceptive impression of representing universal values–actually means the universalization and intensification of exploitation, counterfeiting-fraud and economic destruction.
Comments (18)
Update post; archived comments below:
Update: The Prophetic Dr. Hoppe on the Rise of the Phoenix
Re The Prophetic Dr. Hoppe on the Rise of the Phoenix: today’s Drudge Report reports: BEIJING TO PITCH NEW GLOBAL CURRENCY; DUMP DOLLAR.
3/23/09
Comments (11)
- Keith
- EWWW!!
The Chinese want to replace the dollar reserve system with something possibly worse. Something they credit to Keynes.
What is the matter with these people? Keynes got us into this in the first place! Of course since the fellow who suggested it is part of a central bank there is no real surprise there….but still.
- anon
- If this were to occur… what would it mean for the demonetization of gold, and the existing manipulation of gold markets?
- Mike
- The second paragraph of this report is completely contradicted by the third, and rest of the article. It makes you wonder, if everything after the second paragraph were simply made up by FT partisans of IMF.
Furthermore, the assertion that China has no other choice than to keep its reserves in US dollars, being entirely preposterous, does indicate the FT shilling for the one world order maniacs.
The second paragraph is clearly describing a commodity money such as gold and silver coin.
Moving $2 T to the gold market supply of 4 billion oz. would add at most $500 to the price; but most importantly pave the way for clear sailing ahead.
Perhaps there is something to what he says about it taking courage (to imagine the effects of this on the many trillions of dollars now flying around).
Take this, for sending a carrier destroyer after a fishing boat.
- Geoffrey S.
- I’m sure the Fed wouldn’t object to buying those reserves if China doesn’t want them. They already purchased $300 billion of U.S. debt recently.
- Kalim Kassam
- Looks like the Russians are on board as well: http://www.themoscowtimes.com/article/600/42/375364.htm
- jeffrey
- I’ve always looked at a single world fiat currency as the worst of all worlds, but now I’m not so sure. How could it really be enforced? Maybe it would make more room for alternative market-based currencies than the present system. And it is hard to argue that it would be more inflationary than the dollar at this point. The worst possible system is the one we have right now.
- Bruce Koerber
- Apolitical Political Commentary!
Tuesday, March 24, 2009Is China A Lapdog? Please Don’t Lose Face!
How do you say in Chinese “Like a good socialist I cannot let the market decide the medium of exchange?”
One way is to praise Keynes!
Another way is to surrender monetary control to the International Monetary Fund!
The Chinese leaders are acting just like the ego-driven interventionists everywhere else. They are proposing destruction of the economic future instead of facing the necessarily painful corrections now. China should just ‘bite the bullet’ and take its losses that are the result its ill-advised buying of the debt of the unConstitutional coup in the United States.
China is afraid of ‘losing face’ but it should allow the unConstitutional coup to ‘lose face!’
Otherwise China will ‘lose face’ to an even greater extent by being seen as the little puppydog being lead on a leash by the greatest economic terrorists the world has ever seen.
- J Cortez
- These idiots can do whatever they want. They can create any fiat currency that appeals to them, but it doesn’t matter. It might take years, but in the end, they will fail. History has shown this to be true.
- Geoffrey S.
- I believe it was Murray Rothbard in MES who said that if a one world fiat currency failed we would be in a much worse position than national fiat currencies failing. This is because of the money regression theorem and the fact that a new medium of exchange would have to emerge from barter. If a national currency fails you can just peg to another national fiat currency.
- Mike
- We know it will fail, and the sooner the better. The terms of barter are not dispensed with just because a money is introduced and adopted; they are extended and refined.
In the wings, ready and able, are the electronic gold and silver vault instantaneous payment mechanisms which are very efficient at rapid and secure settlement of transactions of any amount, down to the tiniest fractional weight.
These systems are already working successfully, especially in on line and ATM transactions. Equal or greater success should attend the expansion into daily purchase and sale transactions, — and wages, if permitted by legal tender.
If this be regression, let’s make the most of it.
- George
- Moving $2 T to the gold market supply of 4 billion oz. would add at most $500 to the price
The largest pile of gold on the planet is held by the US (around 8000 tons or 256 million oz) and is only worth around 260 billion at current prices.
A $500 jump (50% increase) wouldn’t help in finding someone with a pile 8 times larger — let alone someone who would sell it to you for a pile of US bonds.
Published: October 7, 2008 12:17 PM
Yeah, people are suddenly going to wake up and say – Hey, what’s that slapping my ass?
LOL – If that’s what we have to rely on then I better stop paying my bills and use that money to buy guns, ammo, food, and smokes to use for currency.
Published: October 7, 2008 12:21 PM
Published: October 7, 2008 11:22 PM
Published: October 8, 2008 10:01 AM
Published: October 8, 2008 7:06 PM
Published: October 10, 2008 2:06 AM
Published: October 10, 2008 11:55 AM
As a citizen, I feel that it the best I can do for my state, and ultimately my country.
Published: October 10, 2008 12:10 PM
Published: October 10, 2008 12:20 PM
Oh, Sorry.
Well, at least we’ll be able to stop worrying about the Amero.
Ugh
Published: October 10, 2008 2:19 PM
Published: October 10, 2008 4:42 PM
Published: October 10, 2008 9:36 PM
Published: October 11, 2008 2:03 PM
Published: March 24, 2009 2:01 AM
Published: March 24, 2009 7:40 AM
e-gold.com
libertyreserve.comGoogle DGC…
Published: March 24, 2009 9:25 AM
Globalization is not being created out of a natural need. It is being artificially imposed in desperation to keep a ponzi scheme going. Pyramid schemes need to bring in ever increasing numbers of victims to prop up the scam. The scheme is going global because it is rapidly consuming every last available mark.
The aftermath of ponzi schemes are ruined lives and financial failure. Generally this occurs in the context of a greater society that victims can integrate themselves back into and get a new start. But if the whole world is absorbed into a pyramid scheme, who will save us when it goes bust? And how much longer can it go on if we are literally recruiting every last person to be victimized?
What is going to happen?
Published: March 24, 2009 12:10 PM
As a general statement, the more interconnected systems are, the more stable they are. Nature itself is highly interconnected, and if you want to look at a man-made version, look at the Internet.
Government doesn’t “interconnect” things, it conquers them. It imposes its rule on a greater and greater scale until it destroys everything in its domain.
Published: March 24, 2009 8:21 PM