The power of texting

By JEFF INGLIS  |  March 2, 2012

RN The fallacy of that is that not every national currency has achieved universal acceptability. That's why the Nigerian merchants have to convert their naira into dollars and their dollars into yuan, because the Chinese won't accept naira. And presumably there are a lot of other currencies, most African countries' for instance, that China is not interested in transacting currency exchanges in. They might take rand, maybe, but I'm not even sure they convert rand.

DW I like hearing this from you because it gives me the sense, I hope, that you liked the chapter in the book about Iceland and questioning the relationship between a sovereign currency and a sovereign state, and does it really make sense to have every single country have its own currency? No one wants to hold Malawi kwacha as a source of wealth, let alone the Chinese aren't going to accept it as payment for anything. So these are tricky questions, but then of course you turn it right on its head and look what happened in the Eurozone with the consolidation of national currencies and now these central bankers can't really do anything but write white papers at home because they don't have any tools at their disposal to help remedy their economies in Italy and Spain and Portugal.

RN If you're going to have a transnational currency, you need in some way a transnational government. What was the old line, disarmament requires world government? It's very tricky, the currency issues are very tricky. I'm certainly willing to pay you some gigantic stones from Yap if it goes on, but I don't think in our lifetimes the national currencies are going anywhere.

DW I don't think so, either, but I think there will be some further consolidation, but I'm not denominating my child's very modest college fund in Thai baht or anything like that.

RW No, I certainly concede that argument.

A REALLY INTERESTING THING THERE IS THIS IDEA OF CURRENCY AND GOVERNMENT. OBVIOUSLY YOU'RE TALKING ABOUT THAI BHAT AND DOLLARS. WHO IS THE "GOVERNMENT" OR GOVERNING AUTHORITY OF AIRTIME MINUTES? IS IT THE COMPANY? WHO WOULD DEFINE OR DEFEND THE VALUES OF THE UNITS BEING TRADED?

DW I think what you are hinting at is that, if airtime minutes are a currency in this way, the issuing authority of the currency is really the company. It's a private entity and is that safe and okay? I think there are real concerns about that because steering the money supply is a tricky game. And so with airtime minutes as a currency, you imagine some people out there right now may be sitting on a mountain of wealth denominated in airtime minutes. But what if for whatever reason, the issuer of those airtime minutes — MTN or someone — was just suddenly giving them away for free? With an oversupply of this form of money it hyperinflates it overnight. Now people who actually sold clothing and cows based on the idea that this is a safe thing, now they're hosed. Their value goes up in smoke.

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