UK Telegraph: Putin Calls for Eurasia Currency Union

One topic we have covered here some that gets little media attention is the ongoing movement around the world to form "regional monetary unions." These regional unions are long term ventures expected to unfold over many years. In many cases, a stated goal for these unions is to have a regional currency at some point. Mr. Putin has been pushing for a regional Eurasian monetary union and currency which is covered in this UK Telegraph article. Below some quotes from this Telegraph article and then a comment.

---------------------------------------------------------------------------------------------

"Vladimir Putin proposed on Friday creating a regional currency union with Belarusand Kazakhstan, Russia's partners in a political and economic union made up of former Soviet republics.

Mr Putin made his proposal at a meeting with the Belarussian and Kazakh presidents which highlighted the challenges facing the Russian-led Eurasian Economic Union following the fall in global oil prices and the decline of the Russian rouble.

"The time has come to start thinking about forming a currency union," Mr Putin said after the talks in the Kazakh capital Astana with Belarussian President Alexander Lukashenko and Kazakh President Nursultan Nazarbayev."

. . . . .

"Kazakhstan, the second-largest post-Soviet oil producer and economy after Russia, has traditionally been lukewarm to the idea of introducing a common currency, saying that first the three nations should synchronise their monetary policies.

Grigory Marchenko, a key Kazakh reformer and former central bank head, has estimated that it would take 10 to 12 years before such a currency is launched."

--------------------------------------------------------------------------------

My added comment: 

When you find articles about these regional monetary unions, they usually mention a fairly long term time frame before implementing an actual regional currency. What this shows us is that these monetary changes do not happen quickly. This is why we think that only a major global financial crisis would provide an impetus to move towards a new global currency very quickly. Absent a crisis, things like this tend to move slowly and steadily over longer time frames. We always have to allow for the risk of another major crisis, because the risk is real. However, if another major crisis is avoided, it is more likely that the major monetary system changes we think are coming will unfold more gradually in a controlled manner. We need to be prepared to deal with either scenario as best we can. That's harder to do, but it's the world we live in.

A reasonable plan is flexible enough to have some emergency fund reserves (in case of a crisis) while not going overboard. It's a balancing act. The only realistic way most people can prepare is to have an emergency fund and then just monitor events and stay informed over time. This is really just common sense. If you monitor events, it will likely be clear if we are heading into another financial crisis situation or not. We try to help here in monitoring events and pointing readers to sources that are more likely to help identify signs of a crisis ahead of time if possible. It is important not to assume either outcome (crisis or non crisis) is a certainty because no one can really know for sure.