Gold as a Universal Currency Essay

513 WordsAug 11, 20123 Pages
The idea of “One World, One Currency” is definitely a brilliant one. As the world becomes flatter with each passing year, it seems that sometime during the latter half of this century we might move towards that. But is gold really the ideal monetary unit to achieve this goal? In this essay we shall explore the pros and cons of this and also look at the problem from a historical perspective. In an idealised scenario, a universal currency will correct many imbalances due to currency fluctuation in the world; prevent inflation crises like the one happening in Zimbabwe. Hoarding of currency would be a thing of the past as money won’t be a commodity any longer but just a medium of transaction. But should we base such a powerful idea on a medium of exchange such as gold, which is a finite and unequally distributed natural resource? Such a course of action could set about creating worldwide economic turbulences. Overnight, even a banana republic can become a major economic power solely on the basis of having a greater quantity of gold ore. In fact, several empires like the Roman Empire, the Qin dynasty, Mesopotamia and even King Croesus himself dabbled with using gold as a common currency in their domain. The fascination to the glittering metal had driven most empires and cultures to accept gold as their currency. But gold as a currency presented several difficulties; one being the difficulty in ensuring the purity of the gold used in the coins, and another being the logistic difficulties in carrying the bulky coins around. These are problems that we can face even today. While it is possible to ensure the purity of gold at present by various certificates like the hallmark seal etc., it will become a different and far tougher ball-game if gold is to be used as a currency globally. While we can teach the public to identify counterfeit notes by using watermarks and

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