As well as neatly laying out his monetary dilemmas as governor of the Reserve Bank of New Zealand (RBNZ), Graeme Wheeler, in a speech last week confirmed the New Zealand dollar's reputation as the 'South Pacific peso'.

Among the developed market currencies, the Kiwi has been the third strongest performing currency against the US dollar (after the Mexican peso and Swedish krona) over the past 12 months, Wheeler told the Institute of Directors in Auckland.

This, of course, has dire implications for the 'peso' tag, which was originally intended as a derogative indicator of currency weakness. And just as the tequila-soaked worm has turned, the entire global currency system has a topsy-turvy, drunken feeling to it right now with the 18 per cent over-valued NZ dollar (according to Wheeler) one of the minor hiccups.

The reasons for the currency upheavals have been well-documented but one of the major causes, as Wheeler reiterates, can be attributed to various types of quantitative easing [that] have added USD5 trillion of assets to central bank balance sheets over the past four years.


These policies, which seek to stimulate growth by 'printing money', have negative currency spillovers for attractive investment destinations such as New Zealand, he says in the speech.

As governments and central banks dick around with their currency settings, however, alternative models of monetary exchange inevitably spring up.

Bitcoin is perhaps the most famous alter-currency of the day but it's not alone. For instance, just today an offer turned up in my inbox for a free $200 in Safety Currency, which is described as a people-powered currency... designed to support the well being of mankind and not personal interests.

Safety Currency appeals to me more than Bitcoin (and the Safety Currency website includes an interesting comparison of the two new pretenders to monetary power) mainly because it takes money-creation magic to crazy new dimensions rather than imposing crypto-geek limitations.

If we can create a system delivering scarcity - we can just as easily create a system delivering abundance - it's our choice, the Safety Currency website claims.

And why not conjure up as much currency as we feel like? It's not that far removed from reality.

Maybe we shouldn't worry about monetary innovation anyway, as this teaser excerpt from a new book 'Money: the unauthorised biography' by Felix Martin argues ... money the concept of universal value and the idea of an objective economic space were founded upon the ancient institution of communal sacrifice: and as such upon the invisible but irresistible communality of mankind.

The downside to Safety Currency is that I'd have to join Facebook to earn the 200 free dollars: I would require at least 1 billion illusory dollars before considering that option.

There's also a problem with the name. Safety Currency is hardly catchy but unfortunately, the Canadians have already taken the 'loonie'.