The US should ditch the dollar - and join the euro
Bill Bonner has a novel suggestion as to how America can solve dollar crisis and protect the integrity its public finances in a single stroke: join the euro.
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.
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"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.
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John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.
He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.
His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.
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