Page 205 - The Drucker Lectures

186 [ The Drucker Lectures

time to be the main trading currency. And no other currency,
neither the German mark nor the Japanese yen, is remotely ready
or willing to take over the key currency role.
Maybe there will be a working European currency in five
to eight years, which will then perhaps become the world’s key
currency. Frankly, I consider that wishful thinking on the part
of the Germans. But if and when that should happen, you may
have again relatively stable currencies. Until then, we face a pe-
riod of increasing currency instability. Add to this that the world
is awash in nonmoney. Most of those billions that float around in
the world economy are money only in the most narrow, theoreti-
cal meaning of the term.
Economically, none of those billions serve an economic func-
tion. None of them is the result of an economic transaction, whether
production or trade. They are the result of speculation in currencies
by and large. They are not real money; they are virtual money. And
this money is desperate to earn a little return. But it is also “ hot
money,” and as such it is prone to panic at the drop of a handker-
chief—in fact, at the drop of a toothpick. And we have seen in the
last few weeks how fast this can happen. And we will see a great
many more such currency panics in the future. I would say that you
can count on such a panic at least twice a year during the next few
years. And that means that you have to learn how to manage the
foreign exchange exposure of your organization. Very few people, so
far, know how to do this. It is not speculation; it is the opposite.
The second thing to say, and it is pretty closely related to what
I have just said, is that the developed world—North America,
Western and Northern Europe, and Japan—all face a period of
growing and severe underpopulation. We face a period in which
a dominant issue in all developed countries is a new social ques-
tion: the growing cleavage between a steadily shrinking number
of young people of working age and a steadily growing number
of people past traditional retirement age.