Rethinking Money - 6

Read reviews of "The Dollar Trap" by Eswar Prasad. He agrees that dollar is losing the credibility of a reserve currrency but it would continue primarily because it does not have an equivalent challenger. This is a particular case of linear imagination reaching nowhere. It can predict for some years but cannot see what can be the disruptive change. I thought that same could have been said of Pound in 1930s. I think that good scholars of money don't go much back into history before reaching their judgements. Why is it so that only two countries India and China controlled 60% of world trade for nearly 2000 years before 1849? There is something hidden in the intrinsic business and monetary models of these two countries that is fundamentally different from the western model of money. I don't know exactly what these models were but they were not definitely what we have today. In order to revisit our ancient business and trading strength, we need to merge three ideas- denationalization of money across the borders, choice of currencies for all the users and commoditization of money. These ideas are not unique but not tried in Indian context. Denationalisation of money means that we need to allow money flows with full transparency in and out of the country. Every year, there is hawala route transferring money in trillions across the nations. All money is national but works in a global reality with international forces of demand and supply. Why it cannot be a transparent exchange instead of being an illegal one? There have been 100 currency crises during last 40 years across the world. Nearly $100 billion of capital has moved out of India in last five years because the businessmen were deeply worried over the weakening and poor value of Indian rupee. Could they use a currency of their choice for whatever investment while sitting within India? If Indian rupee can bend before dollar, pound and euro and fetches a very poor exchange value, we need to create a better choice of investment available to Indian traders and business. Why to limit them to a choice where they will always have a weak exchange ratio? How to do it is a question but first of all, we need to realize the fact that Indian business is not happy with fluctuating and poor exchange value of rupee? Give the choice of currency to one and all beginning with those who can invest. Secondly, let there be more Indian currencies to choose from within India. Why cannot ICICI, HDFC, SBI, Vodafone, Airtel or Reliance issue currency with sound money standards? If they can issue shares, why cannot they issue currency notes? After all, a share is a guarantee of preservation of purchasing power. If govt cannot safeguard our purchasing power, let others take over this function if they can. It will be a minimum government with maximum governance. Third, a money without any anchor is vulnerable to arbitrary fluctuations but this thing can be stopped if there is commodity anchor in form of gold or silver. Some more commodity anchors can be tried. Let there be plural control of money. Today, a city is as large as a world and a world is as large as a village. You are a group both as small as only two and as large as 8 billion. If world can have many currencies, why a city cannot have many currencies? When this can happen without serious backlash or government interference or with popular support? This would be a reality particularly when we lose our fixation with paper currency notes and use electronic money. E-currencies are global and local simultaneously; so, the big change may happen any time after 2016, when global smartphone population crosses 200 crores. This would be ripe time for change-over. Be ready for that.