We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Fiat Currency and its Role in the Global Economy - Essay Example

Comments (0)
Summary
Fiat Currency and its Role in the Global Economy a) Synopsis of content The main article under examination is ‘Is It Time for a World Currency Unit?’ (Fanning , Goldberg & Northway, 2010). This article begins by noting a supranational currency has just been introduced – the World Currency Unit (Wocu)…
Download full paper
GRAB THE BEST PAPER
Fiat Currency and its Role in the Global Economy
Read TextPreview

Extract of sample
Fiat Currency and its Role in the Global Economy

Download file to see previous pages... While the Bretton-Woods conference had proposed a supranational currency this idea was ignored and instead international currencies were pegged to the United States dollar. In the 1970s the United States went off the gold standard, effectively moving all world currencies to floating. There have been a number of attempts at supranational currency including the implementation of the SDR; still, there are some weaknesses to this currency, including it not effectively reflecting contemporary GDP concerns. In addition to the SDR there was the ECU, the ASU, and the African Monetary Unit; in large part these currencies are or were ineffective as a world currency for their largely regional affiliations. Recognizing the inefficiency of these currency units the WDX Organisation Limited was established to develop a more effective world currency. Incorporating modern risk theory, mathematics, and real-time technology infrastructure this organization developed the Wocu. In addition, the Wocu a major innovative aspect of the Wocu is that it implements a research-based algorithm that is unknown to outside sources. b) Specification of thesis – main point The main thesis is that the Wocu is both effective and necessary as a world currency in response to the current fiat model. ...
This will allay concerns with the dollar as the world currency, allow countries to have their own monetary policy, and reduce the need for foreign currency reserves. Additionally, it will have benefits to corporate treasurer; these include reducing currency risk and hedging against volatility, as well as advantages in pricing sales and purchasing, settling transaction, risk management, and raising capital. c) Three supporting opinions/reasons There are a number of supporting perspectives on implementing a world currency. Perhaps the central thorough-put in these supportive arguments is the notion that the use of fiat currencies creates a currency environment subject to political manipulation and volatility. One such consideration has emerged from the United States Economic Report. This report indicates that the European Sovereign Debt Crisis has had an immediate impact on United States monetary policy ("Economic policy: Country," 2010). The report indicates that, “The ripple effects from the euro area’s public debt crisis have led market participants to expect a later start of rate hikes ("Economic policy: Country," 2010, pg. 12). While not necessarily negative, such an impact could conceivably be avoided through a world currency. While this report demonstrates the direct impact of fiat currency, other research has argued for much more profound implications. Ghosh, Roy & Bandyopadhyay (2011) quantitatively examined various elements that directly contributed to volatility in the Indian stock market. Their research revealed that currency volatility – a direct result of fiat money – had a significant impact on stock valuation. Al-Shibli (2011) goes as far as to argue that in abandoning Bretton-Woods and ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
The Role of Human Capital in the New Global Economy
However, their manifestations have been different. While the European nations have suffered from high and persistent rates of unemployment, the figures of which have reached double digits, America is confronted skill shortage and rise in wages. The reason why the two developments are considered in a single framework is because they are part of a single global economy and the web of trade not only links their product market but also their prices.
5 Pages(1250 words)Essay
Current and potential power of the Chinese currency in a global financial economy
China government approximates the international trade industry hires more than eighty million employees, of which twenty-eight million people work in internationally-invested enterprises. The present international economic hold back is having substantial unconstructive effects on China’s export industries, and sectors that rely on international direct investment flows
7 Pages(1750 words)Essay
Global Business Strategy
The evaluation of the current external environmental conditions facing the company was conducted. This is where the author analyzed PEST analysis including political, economic, social and environmental factors, as well as examined Porter’s Five Forces of analysis.
13 Pages(3250 words)Essay
Currency Depreciation
economy and international transactions has been impacted. Many economists and analysts are off the opinion that a depreciated dollar would make it cheaper for other countries to buy U.S. goods. Also, U.S. consumers would find it expensive to buy foreign goods, as the U.S.
2 Pages(500 words)Essay
EXTERNAL OR ADVOCACY WRITTEN MEMORANDUM
The plaintiff, who played for the school’s varsity team, was an ace player who broke the then existing record and was set to receive the Division I
6 Pages(1500 words)Essay
Global currency
It examines the advantages of a US business trading in South Africa and also, holding assets in US dollars instead of South African Rands Generally, the US Dollar is stronger then the South African Rand. This is because
3 Pages(750 words)Essay
How does the current financial crisis (Great Recession) compare with the Great Depression of the 1930's In this context, compare and contrast the role of the Federal Reserve. Compare the USA scenario and its policy response with at least one more co
According to National Bureau of Economic Research (NBER), the recession went on for many months but it ended officially in June 2009 (Robert 81). Global investment banks were jeopardized by exposure to sub –prime mortgages. This ignited
5 Pages(1250 words)Essay
Should the United States Return to a Gold Standard
A variety of gold standards existed and operated in the United States before 1971. Gold reserves supported the dollar’s value and organizations, banks, and individuals could convert cash into gold when demanded. President Roosevelt abolished these gold standards, adopted, and integrated a fiat currency framework into the United States economy.
4 Pages(1000 words)Essay
Will US dollar lose its role as the global reserve currency before 2050
However, the system once adopted and appreciated by governments and their civilians many years down the line is in the modern times questioned, over its suitability in remaining the global reserve currency, come 2050.
5 Pages(1250 words)Essay
The role of slavery the global economy today
Their employment is however characterized by little or sometimes no pay at all, forced labor, inhumane practices such as beating and manhandling as well as being locked up and not being fed. These individuals are
3 Pages(750 words)Essay
Let us find you another Essay on topic Fiat Currency and its Role in the Global Economy for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us