PREFACE

In the recent two centuries, international trade has led to integration of global economy.The progression and integration of global politics, economy, military, science, and technology are moving at faster pace.The development of the Internet and telecommunications further unify among countries.After completing a great amount of research and conducting numerous studies, the authors believe that the trend of world economic development and business model needs a world currency.Therefore, economic globalization will inevitably lead to monetary integration.

A world economy is likely to operate in accordance with the following track.Withinthirtyyears, the U. S. dollar will annex Euro.The U. S. and Europe will use one currency between each other.This will occur as a result of the development of the U. S.economy and technology, as well as the decline of Eurozone economy.To ensure this monetary system operates steadily, the North Atlantic Treaty Organization（NATO）established over 50 years ago, will oversee the operations of the system.Because of its export-oriented economy, Japan's political system is similar to the U. S. political system.Thus, the U. S., Europe, and Japan will merge into a major economic system, which will account for 51 percent of the entire world economy.In the following two decades, the other small countries will gradually join this monetary system and will form a unified world currency system.

In 2008, the U. S.subprime mortgage crisis led to a global economic crisis, which made the Euro depreciate against the US dollar.It also has made RMB against the U. S.dollar continue to appreciate.As a result, a“currency war”has been happening in American Continent and Eurasia.The economic crisis has also made the world enter into an era filled with challenges and opportunities.On one hand, the economic crisis makes each country immerse into an unprecedented complex situation.The United States had to face Wall Street's dissatisfaction of the government's bailout policies, rising social welfare in battling high unemployment rate, and blames from the international community.The European Union had to face economic contradictions and dispute among EU members, as well as new problems and challenges during the Eurozone expansion process.Emerging market countries have to deal with pressures of industrial structure adjustment and economic structure optimization while ensuring sufficient economic growth.On the other hand, each country actively seeks solutions to overcome the crisis. Thus, a new round of the great power game is quietly carrying out. During a period of the uncertainty, anything is possible in terms of whoever controls the initiative, controls the world economy's future.Therefore, reforms in finance, trade, economic structure, international monetary system, and other fields have become the focus of the great power game.

If the economic crisis could bring some changes to world, then the international monetary system reform is one of the most important of these changes.Throughout the development of the world economy, the international monetary system was always reformed and altered after each economic crisis.From the Gold Standard, which occupied more than 100 years from 19th century to 20th century, to post World War II establishment of the Bretton Woods system, the World Bank, and International Monetary Fund, to the formation of Jamaica Agreements in 1976, to the formation of monetary union in 1980s, to the establishment of Eurozone in early 2000s, the monetary system went through several adjustments and reforms.This indicates that people are looking forward to building a much safer and equal credit system that will not be swayed by any country.

Currency has always been in the spotlight.It is not only the reflection of world trade and finance, but it also is the weather vanes of political, economic, and social development.The reformation of the existing international monetary system is a starting point of world political and economic reformation.Countries are contending for power in this fierce game.The United States, China, the EU, Japan, Russia, and other major powers are in a“Friend or Foe”relationship.It is difficult to say who will be the winner.

This economic game among great powers is a war without smoking guns.Every game between great powers also promotes world political and economic reformation.The U. S.is in trouble with an economic crisis due to slow economic growth, but the U. S.is still the world's most powerful country because of its dominance in world class science, technology, and education.The EU is the largest economy which is able to compete with the U. S.currently.The establishment of the Eurozone greatly weakened the U. S.dollar dominance, but the Eurozone debt crisis also gives the U. S.dollar an opportunity to expand its sphere of influence.The rise of other developing countries including China, as well as the rise of RMB's international status, to some extent, also challenges the U. S.dollar's dominance.Diversification of international reserve currency greatly impacts the U. S.dollar's dominance, as well as reduces the risk of losses caused by exchange rate.

We believe that the future of an international monetary systemwill be a new pattern that the U. S.dollar will gradually annex the Euro. The U. S.dollar will be the dominate currency.The Yen, Australian dollar, and other reserve currencies will coexist in new international mo netary system.The world economic development trend should be that the monetary system will gradually improve toward perfection as national currencies will move toward integration.Therefore, establishing a safe and fair credit system which cannot be swayed by any countries is in need.It can ensure healthy economic globalization.At the same time, the monetary integrationwill alsobring new vigor and vitality to the world economy.

Dr.Yunlong Zhao, Ms.Qian Hao

Oct. 2013