As US politicians argue over austerity measures and investors fret over the possibility of a US default, our publisher Bill Bonner, has a novel suggestion as to how to “solve America’s dollar crisis and protect the integrity of America’s public finances in a single stroke.
“Switch to the euro! The US should abandon the dollar and take up the euro as its currency.
“Sounds crazy? Un-American? But think of the advantages. First, the euro is more colourful. It’s more fun to look at and use.
“Second, the euro is worth more than the dollar; you don’t have to carry around so much currency.
“Third, when you travel to Europe, you won’t have to convert your money.
“Fourth, Europe is the world’s largest economic unit. Having a currency in common with it will make it easier for the US to trade.
“Fifth, the Fed doesn’t control the value of the euro. Instead, it is controlled by European bankers who, generally, are made of sterner stuff than Bernanke et al.
“Sixth, European bankers will not readily print euros just to help the US continue its programme of reckless spending.
“Seventh, unable to fiddle its own currency, and inflate away its debts, the US will have to cut spending.
“Eighth, the whiners, chiselers and something-for-nothing crowd in the US can moan all they want; Jean Claude Trichet won’t give a damn.”
You can read Bill’s original piece here. Sure it involves some serious lateral thinking – but perhaps having a harder-edged central bank in charge of the world’s most important currency (for now) wouldn’t be such a bad thing.