Monetary sovereignty

Monetary sovereignty refers here to nations that issue their own non-convertible, floating currency. That was a mouthful: what we mean is that a fully sovereign country is one that issues its own national currency (e.g. the U.S., Japan, Canada) and maintains the following:
  • Makes no promises to convert its currency to other currencies or gold at a fixed rate;
  • Allows the currency to float in foreign exchange;
  • Has no (or minimal) debt in other nations’ currencies (or gold);
  • Operates a central bank function to manage interest rates and payments.
Anything less than this leads to limits on a nation’s monetary sovereignty and domestic policy options.