Finance, Forex and Investments

Advantages / Disadvantages of having a (semi) global currency / trade bloc?

Hey, well ive got a test in a couple of days so yeah thought id try gain insight into this topic. So say the Asian Pacific Union goes through (asia pacific , Aus , China, U.S , India incl.)... and a singular currency is developed for this union. (Much like a second E.U) what would be the economic implications for countries within this union? So far i have these points .... Positives Increased specialisation as each of the nations can import goods cheaper Less hostility between nations as they are increasingly dependant on each other for trade reasons. Due to increased specialisation; incresed efficiency and overall increased economic output while at the same time decreseing E.U's ability to 'bully' outsider nations. Singular currency makes it easier to compare prices and hence increases competition. AGAINST Asia Pacific Union could result to job losses in developed nations since there are no trade barriers. - Forcing specialisation for counries where it is unwanted? The singular currency would mean low low inflation rates in developed nations as opposed to a very high inflation rate in the developing asian nations. Now, although i will be conducting my own research before my test i thought it may help if i post here; how does the E.U combat this inflation problem? is there a singular interest rate ? or does it fluctuate accross the nations and if they do what happens to the banks with high rates, does all the money get concentrated here? if you could please help answer these questions aswell as add on to my pro's and conn's that would be greatly appreciated thanks...

Public Comments

1. Having another currency right now would cause a collapse of the world trade.Why? Because many countries have their Central Bank reserves on US dollars, yes, I know that the Green Back will be replaced,because it is a "sick currency", but this change has its drawbacks,for example the Yuan is not convertible,and that is a condition any new International Currency ought to have. Right now Brazil, Russia, China and India are using their own currencies for their trade because they know that US dollar is plummeting and to keep their monetary reserves on US dollar is dangerous. All this reflects the irreversible agony of Capitalism.
2. i think what you said is wrong and your gonna fail your test and your not gonna get into anu and your gonna end up going to jail.