Currency types and switch

In the long term, there should be two kinds of currencies, common and national common. All currencies should be aligned. AntiNWO strongly opposes Eurozone because it is a big disaster. EU and Eurozone are among the greatest human stupidities. AntiNWO strongly supports national common currency because it does not have any disadvantages. AntiNWO does not support or oppose common currency at a lower level, Subgroup or Region.

This should be examined case by case. It is possible, in some instances, advantages to be greater than disadvantages. So although AntiNWO strongly opposes Eurozone, it does not oppose common currency altogether. As the group becomes smaller, disadvantages may decrease. Not having national monetary policy is an important disadvantage of common currency.

The smaller and more economically homogeneous the group of countries with common currency, the more suitable common monetary policy would be to each country's needs. As the group becomes smaller, the disadvantage becomes also smaller. Another disadvantage for many countries is price increases that hurt competitiveness. These are caused by the exchange rate and generally it happens in countries with weaker currencies.

In some cases, common currency may not increase price level or increases may be small. So there may be a point where benefits outweigh costs. Benefits also may be different in each case. Common currency is less vulnerable to speculators. The larger the group, the less vulnerable it becomes. So if there are big rate fluctuations due to speculators' activity or other reasons, protection from that may be an important advantage.

Regarding adopting national common currency, there are two actions that can been taken; a) switch from common to national common b) switch from national to national common. The second one has two categories a) assign new currency a multiple of existing b) have a price adjustment. In the first category, theoretically, the new currency could also be submultiple of existing. We have not found any such case yet but we have not checked all countries.

The five largest economies in purchasing power parity are; China, USA, India, Russia, Japan. They have half of the world's GDP. In the next five positions are Germany, Brazil, Indonesia, France, UK. They are followed by Turkiye, Italy, Mexico, South Korea, Spain, Canada, Egypt, Saudi Arabia, Australia, Poland. These are the real G20, according to World Bank.

Russia surpassed Japan and is in fourth place while Germany remains in sixth. So Russia is two places above Germany, with Japan in between. We explained that Russia can align its currency to euro/dollar without a price adjustment. India and Japan can do the same. The exchange rate between euro and indian rupee is 1:89,87, 1 euro = 89,87 rupees. Euro and japanese yen rate is 1:160,44, 1 euro = 160,44 yen.

In both countries, all they need to do is give a name to 100 bills and make them the official currency. We will cal them dollars but most likely they will give different names. So one indian dollar will be equal to a hundred rupees, 1 india dollar = 100 rupees. One japanese dollar will be equal to one hundred yen, 1 japenese dollar = 100 yen. The new exchange rates will be;

1 euro = 89,87 / 100 = 0,8987 indian dollars 1 euro = 160,44/100 = 1,6044 japanese dollars

Indonesia has the eighth largest economy. Euro/rupia exchange rate is 1:16.927, 1 euro = 16.927 indonesian rupias. If they want to align with euro/dollar, they would have to give a name to 10.000 rupias and make it the official currency. We will call it Indonesian dollar which will be 10.000 rupias. The new euro/rupia rate will be 1 euro = 16.927/10.000 = 1,6927 indonesian dollars.

One euro is 0,84 pounds, 1,67 australian dollars and 1,50 canadian dollars. Ideally the exchange rate should be around 1:1 but anything in the range 0,5 - 2, half and double of one, is fine. If Russia, India and Japan give a name to 100 bill and Indonesia to 10.000 rupias and make them the official currency, they will be aligned with dollar, euro, pound, australian dollar, canadian dollar.

This will help the countries as well. Their currencies will be more accepted, if they are in a group of currencies that are aligned. Unfortunately, it is not that easy for China, they would have to make a prices adjustment. One euro is 7,5 yuan. Let's look at same examples. We will use Russia but the same reasoning can be applied to India, Japan and Indonesia.

In Russia, an inexpensive lunch is around 6 euros which is 6 X 102,87 = 617,22 or roughly 620 rubles. If they make 100 rubles the official currency, all prices will be quoted in russian euros (the name we gave). So instead of a meal costing 620 rubles it will cost 6,20 russian euros which is 620 rubles. The prices will not change. They will be quoted in russian euros (100 rubles) instead of rubles.

One pair of jeans costs approximately 5.500 rubles. If 100 rubles becomes the official currency, it will still cost 5.500 rubles but it will be quoted in russian euros (100 rubles). It will cost 55 russian euros which still will be 5.500 rubles. A cup of coffee costs around 200 rubles. If they change official currency to 100 rubles, It will cost 2 russian euros (our name for 100 rubles) which will still be 200 rubles.

In China, they would have to make a prices adjustment. One new yuan (or another name) would have to be either one euro or one dollar. It does not make much difference because euro/dollar exchange rate is roughly 1:1. A meal at an inexpensive restaurant costs around 3 euros which is 3 X 7,5 = 22,5 yuan. If the exchange rate becomes 1:1 with euro, the new price will be 3 new yuans. So all prices will be divided by 7,5. They may choose to divide them by 7 to make it easier.

Some countries may want to use the names of their existing currencies for reasons of tradition. So if in indonesia they want to keep the name rupia they would have to assign 1 new rupia = 100 old rupia and it will be like a cent. Or if in Russia they want to use the name ruble for the new official currency, they would have to assign 1 new ruble = 100 old rubles. These are formalities and details.

The switch from common to national common was described in previous article and Greece was used as an example. There are two options of exiting a monetary union. One is a group of countries to exit and another one country to exit. In both cases, the process regarding the currency is the same. If a group of countries exit, a new common currency will be created.

After countries spin off from EU, they will have a different currency, eastern or eastern - southern euro. What will be left in Eurozone will be called Western or Western - Northern. The exchange rate will start at 1:1. The prices will remain the same. New bills and coins will have to be produced. There may be changes in prices, when the exchange rate changes. But this happens also in common currency when there are changes in the exchange rates.