"...The €500 note is more bling than a gold-plated Uzi. No wonder it's become so popular with gangsters in Moscow..."

FOREIGN AFFAIRS magazine just called for the "end of national currency". Maybe it matters.

After all, "Foreign Affairs is the most important and influential journal of international relations in the world," as Cryptogon.com points out.

"It is the mechanism by which the Council on Foreign Relations (CFR) disseminates the game plan." The CFR itself claims to count nearly all past and present US presidents, secretaries of state, defense and treasury officials amongst its 3,400 members.

"Publications like the New York Times and the Wall Street Journal are dumbed down versions of Foreign Affairs," Cryptogon adds. "It's where politicians look to determine what's safe to say, which policies are do-able, and what needs to be done."

And now, says the wonks' favorite reading, "the world needs to abandon unwanted currencies, replacing them with Dollars, Euros, and multinational currencies as yet unborn."

"Economic development outside the process of globalization is no longer possible," explains the author, Benn Steil, a director at the CFR. "[So] countries should abandon monetary nationalism. Governments should replace national currencies with the Dollar or the Euro - or, in the case of Asia, collaborate to produce a new multinational currency over a comparably large and economically diversified area."

One assertion, two shoulds - what a busy day for "blue skies" thinking! Sovereignty in the Pound, Peso and Pengo gets in the way of free trade, says Steil. Foreign exchange markets don't help but hinder globalization. One country, one currency only adds fresh confusion.

The "myth" of monetary sovereignty also adds costs as well, as the Banca d'Italia can attest. Five years on from the death of the Lira, L'Espresso reports that Mario Draghi, governor of the Italian central bank, wants to close 58 of its 97 nationwide branches -"redistributing" 1,500 employees in the process.

No surprise; trade unions and politicians are against the move. Cutting domestic costs to pay for the latest post-national "ism"- in this case, "pan-Europeanism" - always upsets the rabble. What if they start waving pitchforks and rope? But it's only by cutting staff and trimming costs that the Italian state might finally keep its key Eurozone promise this year.

Eight years after the single currency was first launched, Rome now sits on target - just - to keep its government debt below 3% of GDP in 2007. Might meeting the limit on public deficits end the rumors that Italy will soon quit the Euro? It was only in June 2005, after all, that Rome's welfare minister demanded a referendum on reviving the Lira. He wanted to cure Italy's recession - the third in six years - by devaluing its money.

Devaluation had always worked in the past. It would work just as well post-Euro, too.

But what Roberto Maroni and his fellow cospiratori missed - just as Nicholas Sarkozy, the new French prime minister, missed when he called for Euro devaluation to compete with China during this spring's election campaign - is that the European Central Bank (ECB) has been making a good show of destroying the Euro all by itself.

On floating in Jan. 1999, the Euro proceeded to plunge by nearly one-fifth inside 24 months. Lacking political support - and hated by its citizens - the Euro was toast; yet the European Central Bank only turned up the heat.

The ECB slashed Eurozone rates from 3.75% to 1.0% over the following three years. Year-on-year growth in broad money doubled to 8% and above. Yet somehow, the ECB got a currency that leapt one-third higher.

The Euro has kept rising since the ECB finally turned its rates higher at the end of 2005. Now back at that 3.75% level, higher Eurozone rates have matched a leap in broad money growth to a near two-decade record. Twiddling with the knobs and dials just like its ancestor, the West German Bundesbank - "German mainstay and symbol of solidity," as the Washington Post put it - the ECB has delivered more Latin excess than Teutonic sound money.

But it's still lost the race to debase, despite its best efforts.

"It is widely assumed that the natural alternative to the Dollar as a global currency is the Euro," notes Benn Steil in his Foreign Affairs missive. "Faith in the Euro's endurance, however, is still fragile - undermined by the same fiscal concerns that afflict the Dollar but with the added angst stemming from concerns about the temptations faced by Italy and others to return to monetary nationalism."

"But there is another alternative," he adds, "the world's most enduring form of money: gold."

If Steil is serious about a return to the Gold Standard, he makes a pretty weak case. Yes, gold has acted as a store of value all throughout history. But none of its weight or rarity counts for much as a "unit of account" today.

The world has no fear, on the other hand, of transacting its business in Euros. Last December, the value of Euro notes circulating worldwide overtook the value of Dollar bills. The supply of paper Euros has doubled in value from the last days of pre-Euro currencies. And just as the Dollar functions outside the US, the Euro is now accepted outside the Eurozone's borders. Between 10-20% of all Euro notes circulate outside the 13 nations, according to ECB guesses.

The €500 note, for example, carries more bling than a gold-plated Uzi. Worth seven times the largest Dollar-denominated note - and eight times Japan's ¥10,000 bill - the Five Hundred Euro is perfect for large, anonymous cash transactions. Hence its acceptance in Russia, reports the Financial Times. The gangster republics of Kosovo and Montenegro want to go one better, in fact, and adopt the Euro as their national currency!

Foreign Affairs' vision...of a world run on two or three fiat currencies, issued and accepted by diktat...becomes only more likely every time that drug-lords in Moscow trade a kilo of crank. But as a store of wealth for the future, however, gold keeps winning out.

Since the dream of a European single currency became flesh at the start of 2002, gold has averaged 10.3% year-on-year gains measured in Euros. It's risen more than 12% annually against Sterling. In terms of gold-priced devaluation, the Dollar and Yen are now neck-and-neck. Gold bullion has averaged 17.5% gains per year against both since the start of 2002.

Do business in Euros...but hold your wealth in gold? Under monetary union the trend looks pretty solid so far. Foreign Affairs only hints at the prospect.

But maybe Washington's finest are reading.