World wide monetary system

Ren and Cyan - the USD comparison is a good one. The reason why the USD works is because there is Federal Government in the US. There is no such equivalent in the Eurozone (yet). Without fiscal integration (and therefore political integration), monetary integration (through common currency and monetary policy) is half-baked and untenable.
The US went through precisely these growing pains when the common currency was known as the Continental Currency:

Continental currency depreciated badly during the War of Independence, giving rise to the famous phrase "not worth a continental". A primary problem was that monetary policy was not coordinated between Congress and the states, which continued to issue bills of credit.
The painful experience of the runaway inflation and collapse of the Continental dollar prompted the delegates to the Constitutional Convention to include the gold and silver clause into the United States Constitution so that the individual states could not issue bills of credit or "make any Thing but gold and silver Coin a Tender in Payment of Debts." This restriction of bills of credit was extended to the Federal government, as the power to "emit bills" from the Articles of Confederation was abolished, leaving Congress with the power "to borrow money on credit." writes financial historian Robert E. Wright.

In order to make the USD work the individual states were banned from issuing debt. This was simplistic and draconian, but necessary in the 18th Century. In the Eurozone, there are restrictions (e.g. debt to GDP limits) but they are not enforced. Unless they are - the Euro is half-baked and will remain at risk. Currency integration cannot work without fiscal, and therefore, political integration.

Not to stray too much off of the beaten path but what about going back to good old fashioned bartering? In the trade of import for exports, actual currency just seems more like a middle man that is wide open to intereptation. Plus, say those homeless have trade skill but nobody has the currency to pay them. They would still be able to sustain themselves on the small scale by....trying to find the term, kinda like outsourcing, but anywho could use thier skills or handmade products to at least get three hots and a cot.
On the grand scale it would reintroduce "horse-trading" into the economy where no money changes hands but only goods between local and nation powers. "500 BMW's for 10,000 lbs of beef." This would force all nations to have to open communication to all other nations and, the Force willing, better relations.
Any thoughts?

It does happen and it's a pain, even between large multinational companies. We couldn't get the contract because we simply couldn't find a buyer for something we simply did not need. Our smaller competitors did find a buyer though and took the job. I don't even remember what the stuff was, some kind of mineral resource from china.

Bartering is always a good idea between individuals - websites like this seem to be reinvigorating it: http://www.skillsbarter.com/barter/index
But governments don't like it because they can't tax it. Money is a good idea because it is a medium of exchange, a unit of account, a store of value and portable. Anything that fulfill those criteria can be considered 'money'. Currencies are transparent because there is always an exchange rate to reference. Pure barter, without a currency alternative, is very inefficient as Ren's example amply demonstrates. BMW's, raw meat and most other things do not meet the necessary criteria. Gold, silver, salt, barley, shells, even bark - has been used, but paper money probably works best of all.
The system we use is unfair and open to abuse but it is currently the best we have . . .

I've frequently thought about what the world would be like if we reintroduced a bartering system. What I always conclude is that eventually people would get tired of everything being subjective (more so than they are with a standard monetary system) and would want some sort of agreed upon standard, say they want everything related to the amount of chickens things are worth. Then they might need something to represent those chickens rather than using actual chickens all the time. So people decide to create a coin or a piece of paper that says it's worth 5 chickens or 10 chickens. Basically I think if we all switched to a bartering system we'd just end up going back to a monetary system. It came into place all over the world for a reason. It makes (or at least made) sense.

The current economic system is very much like a bartering system, and one that is far more speculative than "chicken" money. The good thing about bartering chickens for cows is that there's no fractional cooping or stabling. wysiwyg

It never ceases to amaze me how money is pretty much made up. Especially now that everything is electronic. I work at a bank, I could just say that an account has money in it. I'd get caught no doubt, but I could do it. The money doesn't have to physically exist anywhere, we can basically snap our fingers and say "Presto! More money!" Money is numbers on a spreadsheet now, that's it. Soon enough I'll bet that paper money as a whole will be obsolete. Next thing you know it's going to be chips in our hands like in Demolition Man. (great movie!)

But yes, it is very much a bartering system, but what we're bartering with is fictional. I'd rather go back to coins made of metals that are actually worth the metal that they're made of (plus there's just something about coin money that I like. I wish the U.S. made larger denomination coins, though I get why they don't). Of course, there are problems with that system too. No such thing as a perfect system.

I'm enjoying this discussion a lot.

Goken - you're so right. Fiat currency is completely made up. It always cracks me up when governments say they don't have enough money, and then proceed to print more and more of it - which is basically what Quantitative Easing (QE) is.

Clearly just printing more money can turn into a zero sum game - the value is inflated away and if over done can lead to catastrophic hyperinflation. But inflation is so low (deflation in some places) and with negative interest rates in many places at the moment I would argue there is plenty of scope to print some more - certainly in the US, Britain, Europe and Japan. The Fed currently holds some US$2 trillion in government bonds (govt debt). I see no reason why that couldn't just be written off - after all its already been spent. The money is already in the economy and it hasn't caused inflation

That's already kind of happening here in the UK. The Bank of England holds about 30% of UK govt bonds and last year they paid the interest they'd received on those back to the government! If you refuse the interest on loans and don't need to be paid back you might as well just write it off. I guess the authorities are worried that people will realise the whole thing is made up if they do that - I'm pretty sure they won't!

This is why sovereign states need to retain control of their currency - so they can muck about with it in times of financial disaster