The creation of the Euro in 1999 was a historic and ground-breaking event, as 11 independent nations shed part of their individuality and all adopted the same currency. Surprising its many early skeptics, the Euro matured into one of the most efficient and heavily traded currencies, proving the success of the largest monetary changeover ever. The introduction of the Euro made it possible for people, services, capital, and goods to move freely throughout Europe, greatly facilitating travel and trade. The Euro's success in Europe caused the long dormant idea of a Universal currency to reawaken and to once again become a hot topic. The concept of uniting the entire world under a single currency was first introduced in the 16th century by an Italian noble and while the idea may sound radical even today, it is advocated by many respected economists including Nobel Prize winner Robert Mundell.

Factors Favoring Currency Consolidation

An End to Transaction Costs

Everyday, roughly 1.4 trillion dollars are traded via the foreign exchange market. Buried within every transaction are fees and costs that amount to roughly .33% of the total amount exchanged. Although seemingly an insignificant number, when considering the vast volume traded in the foreign exchange markets it amounts to approximately 1 trillion dollars a year! The creation of a single currency would virtually eliminate all of these costs and allow a free flow of money. The money saved from the elimination of transaction costs could be put into positive global needs, such as feeding the hungry or funding research to cure diseases.

Troubled Currencies

With the rapid evolution of the global marketplace over the last several decades and the immense need for international trade, nations must not only be confident in the strength of their own currency, but also in the strength of their trading partners’ currencies. Economists speculate that a currency crisis in one nation has the potential to spread fear amongst its trading partners, which could eventually lead to a currency epidemic. The recent and disastrous currency crises in Thailand, Mexico, Argentina and Russia have proven this to be true. The introduction of a universal currency would eliminate the possibility of such a potentially catastrophic situation.

Countries in Debt

In the modern global market, it is very common for one country to borrow funds from another nation. As a result of the volatility in exchange rates, many creditor nations are concerned with the possibility of depreciation in the value of their loans due to a currency devaluation or crisis. For example, the United States and Japan have the highest national debts in the world and if their currencies were to depreciate in value then their debt would be worth less. While this would be beneficial to debtor nations, their creditors would essentially be losing money. A universal currency system without exchange rate volatility would ease the fears of creditor nations and might even encourage more lending between nations.

Factors Opposing Currency Consolidation

One Currency = One Monetary Policy

Implicit in the introduction of a universal currency is the creation of a central authority to control its monetary policy. The problem of having one monetary policy affect many different countries is that at any given time some economies will be at different points in the natural business cycles then others. For instance, one country's economy might be overheating and in desperate need of a tightening cycle in interest rates, while at the same time a different country on the other side of the world could be suffering through a terrible recession that would need a reduction in interest rates to stimulate the economy. Therefore, decision making at the central authority will be very difficult as it tries to balance the world economy as a whole at the expense of individual nations. Although this issue continues to plague the European Union, it would be a necessary sacrifice in order for the system to function properly and one that not many nations would be willing to make. In addition, nations often utilize the exchange rate system as a "shock absorber" in times of economic trouble and instability. For example, a nation with a large deficit may adopt a soft monetary policy causing their currency to depreciate in value with the purpose being to increase the country's exports and domestic spending. Similarly, many countries fix their exchange rates in order to boost their exports. China pegged the Yuan to the United Sates dollar which allowed their goods to remain the cheapest in the marketplace and gave them a competitive advantage. If a single currency system were adopted, then the ability to use exchange rates as a "shock absorber" or as a business tactic would be lost, potentially damaging exporting nations.

Nationalism

Nationalism is a very powerful emotion and one vehicle in which it manifests itself is a country's currency. Money is a major part of daily life and it often features illustrations of national heroes or leaders, causing individuals to feel that their currency represents their nation's individuality and sovereignty. Additionally, forcing a universal currency upon individual countries may anger many patriotic citizens. As a result, many governments might oppose the adoption of a universal currency due to the undesired consequence of a decline in individual identity. In fact, the loss of individual identity was one of the key reasons that the United Kingdom declined to accept the Euro as their currency.

Governance

The creation of a universal currency will require the creation of a universal central bank to manage it. The bank will control the world's interest rates and therefore, its leaders will have considerable influence over individual economies. The process of selecting bank officials and figuring out an appropriate amount of representation for each country will surely be sore points of contention. Also, in order for the bank to function properly, it must be a fully independent institution. If one country or even one continent were to have undue influence on the bank's decisions then it will surely fail. One of the reasons for the Euro's success has been the European Central Bank's (ECB) deft handling of its monetary policy and the ECB's management of the Eurozone economy. The bank's independence and strong leadership have ensured that for the most part the difficult, but correct decisions have been made.

Final Point

In the aftermath of World War II, the idea of creating a universal currency was discussed at the Bretton Woods Summit, but eventually dismissed because the United States and Great Britain disagreed on which currency to base it on. The United States wanted a dollar-based currency called the "unitas", while Great Britain was in favor of a pound-based currency called the "bancor". In light of this piece of history, it is easy to understand why even the staunchest advocates of a universal currency do not expect its inception anytime soon. Considering that a small dispute over the base of the currency between only two nations was enough to scrap the idea, the idea that the entire world will eventually agree on every single issue seems far fetched at this point in time. Perhaps the future will bring a changed political and economic landscape more receptive to the creation of a universal currency, but until then it will remain a radical idea. Before dismissing the thought entirely though, consider that when the unification of Europe under the Euro was suggested, many initially doubted its prospects for the same reasons as those listed above. However, not only does the Euro exist today, it is a thriving currency worth more then the United States dollar and thus should provide a small ray of hope for those dreaming of a world wide currency.

If lying in the sun, playing water sports, and taking long walks on the beach are what you're looking for in a vacation, then a relaxing week in Bali, Indonesia is perfect for you. Bali has everything to offer someone looking for an island getaway including tropical rain forests, beautiful temples and palaces, towering volcanoes, gorgeous golf courses, and of course miles and miles of sandy beaches filled with sun bathers and surfers. The temperature in Bali is consistently beautiful with the average low throughout the year at about 75º F and the average year high 88º F. Watch out for the rain from December through March though, when Bali can be hit with the Monsoons coming from the West resulting in heavy rain. The excellent exchange rate between the Indonesian Rupiah and the American dollar allows tourists to find excellent rates on hotel rooms in Bali. One can get a standard room at a five star hotel for two adults on a Friday evening for about $100.00. If you were to stay in a less luxurious hotel the prices decrease sharply with a three star hotel on a Friday night for two adults in a standard room costing under $40.00. In addition to the inexpensive accommodations, travelers can enjoy great food and entertainment at a low cost.

If Bali doesn't sound appealing to you, but you are still looking for fun in the sun then Thailand may be the place to spend your vacation. Of course if you are going to go to Thailand then a visit to Bangkok should be part of the itinerary, but Phuket or one of the other beautiful beach towns would be a good main destination. Phuket is Thailand's largest island and has beaches lining the coast all around. The accommodations in Thailand are similarly priced to those in Bali, due to the strength of the dollar against the Thai Baht.

A more culture filled, diverse vacation what you looking for? Both Beijing and Hong Kong have lots to offer and both have the benefit of having weak currencies against the US dollar. In both destinations accommodations can be found in five star hotels for around $100.00 a night, and in three and four star hotels starting at around $40.00 a night depending on the location. These cities have everything to offer ranging from museums to temples to amusement parks and even beaches. The weather in both these places is similar to the weather in the Northeast of the United States with Hong Kong having slightly milder seasons than Beijing.

The downfall to vacationing in Asia is that these places can be expensive to get to. However, it is possible to fly inexpensively to Asia. The trick is book ahead of time at least a few months and travel during the middle of the week. Flights to Asia go up by hundreds of dollars on the weekends. Although, travel expenses are going to be higher when traveling from the U.S. to Asia rather than Europe or the Carribean, the dollars value against the major Asian currencies make it a great bargain once you get there. Remember if you are saving two to three hundred dollars a night on your hotel room plus an additional few hundred on food and entertainment then the airline ticket is paid for within the first few days of the vacation. This is a great opportunity for people to visit and explore a new destination while taking advantage of the value of the US dollar.

Whether you want to lie on the beach of the beautiful coasts of Spain or Greece, climb the Eiffel Tower in Paris or visit any of the amazing museums in Italy, there is a way to do it without going broke. Although a European vacation may not be the most economical of vacations right now for an American due to the strength of the Euro against the American dollar, traveling to Europe does not have to be as expensive as you may think. The trick to coming home with money still in your pocket is extensive research and planning.

The first thing to consider when planning a trip to Europe on a budget is the time of year that you go. If you don't mind traveling to Europe in the winter, which is low tourist season there, then worry no more. During the low season there is much less of a demand, therefore both hotels and airlines offer exceptionally good deals. Low season has its benefits such as virtually no crowds, no waiting in line, and lower prices on just about everything in addition to great skiing for those interested, but it is called low season for a reason. Beach towns will be mostly shut down for the winter and you have to be prepared for bad weather and empty streets everywhere you go, in contrast to high season when everything will be open ready and waiting for you. Unfortunately, this convenience will cost you money, time and patience. Expect long lines, crowds, and tour buses everywhere you go.

If traveling during either the low season or high season are both either out of your budget or not appealing to you then a traveler should look to travel during those months that are in between the low and the high. For Europe this would be March and early April in the spring and September and early October in the fall. During these times, some prices have started to fall due to lower demand, but things are still going strong in the cities and towns. While lines may still exist they will not be as long as they are during peak season and beautiful weather can still be enjoyed at the beaches in southern Europe during these times, mainly Italy, Greece and Spain. Some places won't have lowered their prices yet so it takes some time to find the best deal. The internet is a great resource for finding these deals and can allow you to plan your trip more efficiently.

The internet has made planning a trip much easier and in some cases much less expensive for the consumer. Hotels are able to bring in a great deal of business with little or no cost to them which allows them to pass on some of those savings to the consumer. Look at sites that offer specials to the consumer just for using their website and read reviews from past users to get a handle on other people's experiences. Websites that offer "hostels" can also be useful because these are not exclusively for those college kids backpacking through Europe as many people may think. Most will offer not only hostels for those on an extremely low budget, but they also offer good deals on what Europeans call "budget hotels." These are "no frills" hotels with usually forty rooms or less that offer all the necessities to make your stay comfortable with none of the extras that boost the price. They are perfect for travelers who intend on only sleeping in there hotel room and getting the most out of their destination. In addition, if you are planning a last minute vacation, there are places to go to look for last minute deals on hotel rooms which can sometimes offer up to seventy percent off a room

For many travelers, one of the central sources of angst and confusion is how to tip in a manner that is neither miserly, nor extravagant. Travelers run into far more situations where tipping is a concern than they would in their everyday life at home. And it's made more uncomfortable due to the fact that when visiting abroad, the customs are foreign and easily misunderstood. Taxi drivers, porters, valets, waiters, and barbers/hairstylists are just some of the people you will encounter who will provide you with a service, and may or may not expect or require a gratuity.

The first key to understanding tipping is realizing the situation at hand. Starting with restaurants, the general rule is between 10-20% of the bill before taxes. Some people choose to tip extra if they feel the service is outstanding, while many will leave a small tip or not tip at all if they feel the service is terrible. However, not leaving a tip because the service did not meet expectations can often lead to a confrontation. It is often better to leave some kind of a tip; but be sure address the situation with the manager. It is also vital to know the local customs when it comes to tipping. In America, tipping is expected, and we are known to be some of the most generous tippers around. Many people in the service industry depend on tips to supplement their wages, which are often set artificially low in expectation of the tips they will receive. The key thing to remember is that tipping is a personal decision, but it affects others. So the idea of treating others as you would want to be treated clearly resonates. Be wary of restaurants that add a tip to the bill automatically: no one should pay two tips for the same meal.

In Europe, workers in the service industries are generally paid higher wages than in America, and therefore tipping is not always customary. When people do tip they generally tip less than in the states. However, it varies from country to country. Central European countries like Germany, Switzerland, Austria, and Holland tip between 5-10% as a common practice, although it is not always required to tip. Countries like Spain and Italy are not advocates of tipping. In France and the Scandinavian countries, a service charge is included in the bill, while Ireland and the U.K. generally adhere to an optional tipping policy. When traveling in Europe, unless you are in Spain or Italy, it is generally a good idea to leave a tip close to 10% unless the charge is included, or the service was not satisfactory.

Traveling in Asia is often a culture shock, and this is magnified when it comes to tipping. While most of the globe follows the thinking that gratuities are required, or at the very least expected, many countries in Asia strictly forbid it, and many service workers will be offended if you attempt to tip them. Tipping is not the custom in India, China, Korea, Taiwan, and especially Japan. Likewise, in Australia and New Zealand, tipping has not historically been a custom and it is not expected, although the practice is growing, and has become especially common in the tourist areas.

Other parts of the globe also have some guidelines for tipping. Canada is very similar to the U.S., as is Mexico. The key thing to keep in mind when traveling is to be respectful of the customs in the country you are visiting. It is also better to lean towards generosity rather than stinginess when in doubt. Also, keep in mind that many restaurants and hotels add on a charge for gratuity, so carefully inspect the bill before leaving a tip. Furthermore, if you are traveling on business it is especially important that you represent yourself well. Always be sure to tip well when it is called for, and give your client the impression that you are interested in seeing others succeed. Tipping is definitely a touchy subject for many, but if you can master it, then you will enjoy yourself far more, and also ensure the happiness of those around you.

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