Hubris from a Nameless Cynic

Two days ago, I wrote a post entitled “While the Left was busy making fun of Michelle Bachman.” In the piece I made the point that Michelle Bachman is not crazy for having concerns about a one-world currency being pushed by other foreign governments. My supporting argument was that there has been talk at the last G20 and current G8 meetings about adopting a supranational currency. My conclusion was simple; you cannot be labeled crazy for believing that there are governments talking about one-world currency when there are governments talking about one-world currency. A good discussion formed with some of the esteemed and high-minded, left-leaning bloggers who follow my posts and I have a great deal of respect for. Now enter Nameless Cynic.

Nameless Cynic said:

“ConGen: Well, I suppose you could determine that "several other countries seriously calling for and trying to establish a world currency." If, that is, you had absolutely no idea what "reserve currency" means.

I mean, let's go to that same Bloomberg article you linked to.

Russian President Dmitry Medvedev has repeatedly called for creating a mix of regional reserve currencies as part of the drive to address the global financial crisis, while questioning the dollar’s future as a global reserve currency.

See, what that means is, he isn't calling for making a Unified World Currency: he "called for creating a mix of regional reserve currencies." He's diversifying his portfolio instead of investing everything in USA Corp.

A "reserve currency" isn't the money you spend, it's the currency held by a central bank on a permanent basis as a store of international liquidity. They don't want to hold dollars because dollars aren't worth as much now.

So calm down. We aren't facing the One World Government you've been storing canned goods and ammo in order to fight against.”

Here Cynic is denying the idea that anyone is looking to create a supranational currency. From the article I referenced, Cynic argues that Russia merely wants to mix up their currency reserves by divesting in the dollar and diversify with other currencies as well.

I replied:

NC - LOL!!!!!!

Do you start and end all of your arguments with condescension and accusations? The offer to reply in-kind is tempting, but pointless.

The part of the quote you left out was:

“Russia’s proposals for the Group of 20 major developed and developing nations summit in London in April included the creation of a supranational currency.”

It’s fairly easy to remove the line of the quote talking about one-world currency and then say, “hey, ignoramus, they’re not talking about one-world currency.”

While I have a very good understanding of reserve currency and have taught college classes about it, you seem to be a little clueless of the term “supranational currency.” It is not the same as reserve currency.

Go look it up! If you are going to drop insults, know what you are talking about.

Some definitions for you:

A reserve currency is when a country’s central bank holds other nation’s currency/currencies and/or commodities such as precious metals to ensure liquidity and stabilize their home currency value.

A supranational currency occurs when a group of countries establish a central banking entity, via treaty, to establish some form of uniform currency. A supranational currency is not necessarily limited to being used as reserve currency. The Euro is a supranational currency that is used as currency throughout the EU.

Russia is proposing a supranational currency to be adopted by all nations that will be used to resolve trade balances. Meaning, it will replace the dollar as the currency of trade and the standard for reserve currencies. So to clarify for the Cynic, yes, reserve currency is not used by average people in day-to-day transactions. Yes, Russia is not simply looking to diversify their country’s reserve currency, but replace the dollar as the currency used by the world. Yes, it requires a global form of government or organization to run and regulate it. Yes, whether you think it is plausible or not, it’s a bad idea for the US to consider adopting any form of supranational currency. The economic consequences would be traumatic for our country. Runaway inflation comes to mind.

I’d love to go into detail about how Russia’s supranational currency will work, but at the moment they have only made proposals and have no clear outline. Could the supranational currency be more than just currency reserves? Who knows? A few years ago an international panel of astronomers met to discuss the possibility of including three other celestial bodies to the nine planets of our solar system. By the time they were done we did not have twelve planets in our solar system, but eight. Additionally, there is already a supranational currency called the Euro and it’s used for more than currency reserve.

The Law, a common reader and left-minded blogger, pointed out that it is not likely to come to fruition and I am inclined to agree. However, it’s not crazy to think it’s possible.

Cynic’s reply?

Oh, yes. Look, here we are, all concerned. Dmitry Medvedev has recommended that we create "a supranational reserve currency"!! Oh, god! It's a...

...it's a reserve currency not tied to the dollar. Like I said.

...additional comments redacted and posted below…

My reply?

Cynic. It is not like you said. Reserve currency and supranational currency are not the same by definition. You were discussing Russia adjusting their reserve currency for their own central bank. In reality, they are pushing as many countries as possible to adopt a supranational currency to hold in reserve. They are not analogous, not even in outcome. There is a big difference between Russia adopting a mix of reserve currencies for their central bank and the world adopting a single currency based on a basket of currencies. The biggest difference is the effect on the US dollar and the US economy.

The rest of Cynics reply from above…?

Jesus, you're a schmuck. (Oh, sorry. I probably shouldn't use Hebrew insults. You'll assume I'm part of the Worldwide Jewish Conspiracy...)

You've taught college classes about it? Then why don't you seem to know anything on the subject?

…Baseless insults. Cynic…when you make comments like this it does not make you look witty or intelligent. It makes you look like an ass. From now on I’ll return your comments from whence they came; the garbage.

Additional articles on the subject:

http://www.reuters.com/article/usDollarRpt/idUSLG42629320090616

http://en.rian.ru/russia/20090710/155494340.html