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GCC and the Inevitable Transition to the Single Global Currency (SGC)

Dr. Celali YILMAZAdvisory Board Member

Single Global Currency Association

GCC Currency Forum15th June 2008, Dubai

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Disclaimer

• This presentation is prepared by Mr. Morrison Bonpasse, President of the Single Global Currency Association and author of the book “the Single Global Currency: Common Cents for the World”.

• Comments are reflects the presenter’s personal views and do not necessarily reflect the views of the Capital Markets Board of Turkey.

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Some Simple Questions

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Which One is More Valuable?(All silver)

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Which One is More Valuable?

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Do You Know?

• How many currencies (or central banks) on the world:– 100 years ago?– Today?– 20 years later?

• How many different paper money printed and circulated:– In Germany, in 1920s (170,000!)– In the US before 1913 (FED) (3,000)

• What is the optimum number of currencies for the World economy?

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GCC Monetary Union & Transition to the Single Global Currency

• What the people of the world want is stable money and price stability.

• Monetary Unions aim for such stability.

• MU Central Banks work for that goal and not national interests.

• The remaining largest impediment to that goal is the existence of multiple currencies

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GCC Monetary Union: To Be the World’s Second Largest (GDP)

• European Monetary Union is largest

• 15 Countries

• GDP $11 Trillion

• GCC Monetary Union

• 5 Countries

• GDP .75 Trillion

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Other Monetary Unions

THE WORLD MONETARY UNIONS (MU)

• 1967 BRUNEI-SINGAPORE. (drop 1 currency) • 1983 EASTERN CARIBBEAN MU. (7)• 1994 WEST & CENTRAL AFRICAN MU. (12) • 2002 EUROPEAN MONETARY UNION. (11)• 2007 SLOVENIA JOIN EMU (1)• 2008 CYPRUS, MALTA JOIN EMU (2)• 2009 WEST AFRICAN MONETARY ZONE (4)• 2010 GULF COOPERATION COUNCIL (4)• 2008-201? EMU/EU ACCESSION COUNTRIES (12)• 2012 EAST AFRICAN COMMUNITY (4)• 2016 SOUTH AFRICA DEVLPMT COUNCIL (13)• FUTURE? E. ASIA, S. ASIA, N. & S. AMERICA

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REDUCED # INT’L CURRENCIES for United Nations Members

• 1946 51 COUNTRIES 51 CURRENCIES• 2000 189 157• 2006 192 146• 2008 192 143• 2010 192 135• 2016 192 115 (?)• 2024 192 1 (?)

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SINGLE GLOBAL CURRENCY

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Current Situation

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“Optimum” Monetary Unions

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Ideal: Single Global Currency

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SINGLE GLOBAL CURRENCY

DEFINITION

• A COMMON CURRENCY, • MANAGED BY A GLOBAL CENTRAL BANK WITHIN A

GLOBAL MONETARY UNION, • THAT PEOPLE CAN USE WITHIN MEMBER

COUNTRIES AS LEGAL TENDER AND FOR INTERNATIONAL TRANSACTIONS.

• "DO YOU MEAN LIKE THE EURO?" YES!

• AND OTHER COMMON CURRENCIES, TOO.

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SINGLE GLOBAL CURRENCY

BENEFITS

• Eliminate $400 Bln annual FX transaction costs• Eliminate global (currency) imbalances• Eliminate need for FX reserves• Eliminate currency fluctuations• Increase international trade• Increase asset values, & worldwide GDP by

$trillions• Reduce worldwide interest rates

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SINGLE GLOBAL CURRENCY

WHO WILL BENEFIT FROM HAVING A SGC?

EVERYONE IN THE WORLD,

• CORPORATIONS• TRAVELERS• INDIVIDUALS PURCHASING/SELLING ANYTHING IN GLOBAL ECONOMY (ALMOST EVERYONE)• PEOPLE LIVING IN COUNTRIES WHERE CURRENCY VALUES FLUCTUATE (EVERYONE, IN BRIEF)• PEOPLE IN COUNTRIES SUBJECT TO CURRENCY CRASHES

EXCEPT FOR THOSE WHO MAKE THEIR LIVING OR • FORTUNE FROM THE EXISTING SYSTEM• CURRENCY TRADERS• CURRENCY SPECULATORS• HEDGERS AGAINST CURRENCY RISK

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SINGLE GLOBAL CURRENCY

COSTS

• Loss of local monetary policy, but this is not always a loss.

• Loss of ability to manipulate exchange rates, but this is not always a loss.

• Loss of national symbols, but people care more for stable money than historic or artistic money.

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SINGLE GLOBAL CURRENCY

IS A STABLE CURRENCY

A FUNDAMENTAL HUMAN RIGHT?

• Article 17, of the Universal Declaration of Human Rights:

• (1) Everyone has the right to own

property

• (2) No one arbitrarily deprived of

property.

NEEDED:

• Worldwide acceptance of a FUNDAMENTAL HUMAN RIGHT to a stable currency.

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SINGLE GLOBAL CURRENCY

EXISTING GLOBAL STANDARDS

– NUMBER SYSTEMS (Decimal, Binary)– TIME (Calendar, 24 Hours, 7 Day Week...)– COMPUTER (INTERNET, PROGRAMS...)– MEASUREMENTS (Metric System:

WEIGHT, VOL, LENGTH, TEMP)– RADIO FREQUENCIES (MEGAHERTZ)– BAR CODES

• DO ANY OF THESE CHANGE WHEN OBJECT BEING MEASURED CHANGES?

• WHY SHOULD MONEY?

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SINGLE GLOBAL CURRENCY How to get there from here

• Creation of New Monetary Unions, e.g. GCC.

• Expansion of Monetary Unions, e.g. EMU

• “Ization” as in Dollarization, Euroization

• International Monetary Conferences

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Conclusion: GCC CAN LEAD WORLD TO SGC

• CREATE GCC MONETARY UNION

• EXPAND GCC MONETARY UNION

• MERGE GCC MU WITH OTHER(S)

• CALL FOR MONETARY CONFERENCE

• NOT ANTI-DOLLAR, BUT PRO GLOBAL

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Last Words

• “Most good ideas takes years, sometimes centuries to be recognized.”

• “You can never solve a problem on the level on which it was created.”

• The future of the SGC may be larger than its modest beginnings.

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SINGLE GLOBAL CURRENCY

• IT’S COMMON CENTS

• SINGLE GLOBAL CURRENCY ASSOCIATION

• www.singleglobalcurrency.org

• GOAL: SGC by 2024, 80th Anniversary of BRETTON WOODS CONFERENCE – 1944.