# How The Euro Will Destroy America's Power

Discussion in 'World Events' started by Proud_Syrian, Apr 24, 2003.

1. ### Proud_SyrianGuest

The way to check American power is to support the euro

By George Monbiot.

The problem with American power is not that it's American. Most states with the resources and opportunities the US possesses would have done far worse. The problem is that one nation, effectively unchecked by any other, can, if it chooses, now determine how the rest of the world shall live. Eventually, unless we stop it, it will use this power. So far, it has merely tested its new muscles.

The presidential elections next year might prevent an immediate entanglement with another nation, but there is little doubt about the scope of the US government's ambitions. Already, it has begun to execute a slow but comprehensive coup against the international order, destroying or undermining the institutions which might have sought to restrain it. On these pages two weeks ago, James Woolsey, an influentiual hawk and formerly the director of the CIA, argued for a war lasting for decades, "to extend democracy" to the entire Arab and Muslim world.

Men who think like him - and there are plenty in Washington - are not monsters. They are simply responding to the opportunities which power presents, just as British politicians once responded to the vulnerability of non-European states and the weakness of their colonial competitors. America's threat to the peace and stability of the rest of the world is likely to persist, whether George Bush wins the next election or not. The critical question is how we stop it.
Military means, of course, are useless. An economic boycott, of the kind suggested by many of the opponents of the war with Iraq, can never be more than symbolic: US trade has penetrated the economies of almost all other nations to such an extent that to boycott its goods and services would be to boycott our own. Until recently, as Bush's government sought international approval for its illegal war, there appeared to be some opportunities for restraint by diplomatic means. But now it has discovered that the United Nations is unnecessary: most of its electors will approve its acts of aggression with or without a prior diplomatic mandate. Only one means of containing the US remains. It is deadly and, if correctly deployed, insuperable. It rests within the hands of the people of the United Kingdom.

Were it not for a monumental economic distortion, the US economy would, by now, have all but collapsed. It is not quite a West African basket case, but the size of the deficits and debts incurred by its profligacy would, by any conventional measure, suggest that it was in serious trouble. It survives only because conventional measures do not apply: the rest of the world has granted it an unnatural lease of life.

Almost 70% of the world's currency reserves - the money which nations use to finance international trade and protect themselves against financial speculators - takes the form of US dollars. The dollar is used for this purpose because it is relatively stable, it is produced by a nation with a major share of world trade, and certain commodities, in particular oil, are denominated in it, which means that dollars are required to buy them.

The United States does very well from this arrangement. In order to earn dollars, other nations must provide goods and services to the US. When commodities are valued in dollars, the US needs do no more than print pieces of green paper to obtain them: it acquires them, in effect, for free. Once earned, other nations' dollar reserves must be invested back into the American economy. This inflow of money helps the US to finance its massive deficit.
The only serious threat to the dollar's international dominance at the moment is the euro. Next year, when the European Union acquires ten new members, its gross domestic product will be roughly the same as that of the US, and its population 60% bigger. If the euro is adopted by all the members of the union, which suffers from none of the major underlying crises afflicting the US economy, it will begin to look like a more stable and more attractive investment than the dollar. Only one further development would then be required to unseat the dollar as the pre-eminent global currency: nations would need to start trading oil in euros.

Until last week, this was already beginning to happen. In November 2000, Saddam Hussein insisted that Iraq's oil be bought in euros.3 When the value of the euro rose, the country's revenues increased accordingly. As the analyst William Clark has suggested, the economic threat this represented might have been one of the reasons why the US government was so anxious to evict Saddam.4 But it may be unable to resist the greater danger.
Last year, Javad Yarjani, a senior official at OPEC, the oil producers' cartel, put forward several compelling reasons why his members might one day start selling their produce in euros.5 Europe is the Middle East's biggest trading partner; it imports more oil and petrol products than the US; it has a bigger share of global trade; and its external accounts are better balanced. One key tipping point, he suggested, could be the adoption of the euro by Europe's two principal oil producers: Norway and the United Kingdom, whose Brent crude is one of the "markers" for international oil prices. "This might", Yarjani said, "create a momentum to shift the oil pricing system to euros."6

If this happens, then oil importing nations will no longer need dollar reserves in order to buy oil. The demand for the dollar will fall, and its value is likely to decline. As the dollar slips, central banks will start to move their reserves into safer currencies, such as the euro and possibly the yen and the yuan, precipitating further slippage. The US economy, followed rapidly by US power, could then be expected to falter or collapse.

3. ### robsaundersRegistered Member

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I completely agree with you. More importantly, I am delighted (and relieved) to see someone else aware of this massive 'issue'.

The week that abomination began to happen in Iraq, a late-evening radio show on our national station (RTE 1 - Ireland) hosted by one of our more emminent journalists and broadcasters (Vincent Browne) featured a discussion on this very issue. Interestingly, there were also 3 Irish individuals who work in prominent positions in 3 of the larger behemoths of the oil industry who were guests or contributors to the show. They all confimed (from an oil company's point of view), the absolutely critical effect the Euro is likely to have.

Rob Saunders

Do onto others as you would have them do onto you. :m:

5. ### SG-NRegistered Senior Member

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1,051
I hope that it will be that way soon

Vive l'€ !

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8. ### SaltyRegistered Senior Member

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Hasn't the Euro lost like 1/3 of its worth since 1999? Thats not what I call stable.

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This issue may be the US' greatest vulnerability, and if exploited the results could be interesting:
When will we buy oil in Euros? - The Guardian

Noteworthy general stats from KLS-Euro:

-The Euro has reserves of $350 billion (7x that of the dollar) -Euroland has a population of 20 million more than the US -Euroland has 25% greater exports than the US -Euroland GDP is$6800 billion, only slightly behind the US' $7250 billion -Japan, Brazil and Taiwan are introducing Euros into their reserves. There are theories that this issue was a central motivation for the occupation of Iraq: "The real reason the Bush administration wants a puppet government in Iraq -- or more importantly, the reason why the corporate-military-industrial network conglomerate wants a puppet government in Iraq -- is so that it will revert back to a dollar standard and stay that way." (While also hoping to veto any wider OPEC momentum towards the euro, especially from Iran -- the 2nd largest OPEC producer who is actively discussing a switch to euros for its oil exports)." - Indymedia 10. ### VortexxSkull & Bones SpokesmanRegistered Senior Member Messages: 2,242 EURO = missing WMD! Please Register or Log in to view the hidden image! 11. ### andy1033Truth SeekerValued Senior Member Messages: 1,060 when england joins the euro, is upto the usa. america controls if and when england will join the euro. you see as many has said, america does not want a euro currency. but they will not be able to hold england out of it forever. it sounds funny, but england joining the euro is a threat to the national security of the united states. this simply answers your questions. how you interpret the highlighted sentence in upto you. 12. ### Don HakmanRegistered Senior Member Messages: 619 You are dreaming if you think the World Bank is ever going to cut the US out of the action via euros or anything else. Well maybe if the US were 50% destroyed but short of that the euro will make little difference. What will make a difference over the next 20 years is the conversion to fuel cell tech. Who cares who buys oil then? Oil reserves will be at its final stage of diminishing returns in 20 years. 13. ### ClockwoodYou Forgot PolandRegistered Senior Member Messages: 4,467 The whole european continent doesnt have equal economic importance with the US. THey wont even have a chance of seriously increasing their importance without raising their per-capita-incomes and starting new industries. Only a handfull of european countries have any power at all, Britain and russia being the greatest of these. Neither are really going along with the euro and russia is not doing so hot itself. 14. ### KamiRegistered Senior Member Messages: 61 I think that you guys are missing something... to say that the european countries have little power individually is true, but collectively it couldn't be further from the truth. Collectively, Europe has greater population, greater exports and about the same GDP as the U.S. Top that off with the fact that other nations ARE switching to euros and you have a problem for the U.S. The European states realized a while back that they are irrelevant in world affairs if they do not band together. This is part of the impetus for the E.U. I think that it exemplifies this status if you look at the way that a division over Iraq paralyzed Europe and the U.N. The U.S. very masterfully caused this rift and was able to negate any real resistance before we invaded anyway. Now, if China, Russia and India decide to also band together, then you'll see a REAL superpower. Of course, you'd also have the basis for 1984. 15. ### ClockwoodYou Forgot PolandRegistered Senior Member Messages: 4,467 Notice many non-american countries use the american dollar? Even the ones that hate us. 16. ### KamiRegistered Senior Member Messages: 61 Most because they have no choice. Now the do... or soon will. I still think that it's debatable whether the currency standard will remain the dollar or whether it will switch to the euro or even the yuan. If China loosens up a little on the social freedoms of its people, I think that we could definitely be looking at a new Chinese century. Already China is working on manned space flight, moonshots and other advanced technologies. India's chief export is software programming. Meanwhile America is all but ignoring its space program and we watch as our venerable spacecraft explode or burn up on re-entry. But America is a schizophrenic country, so who knows? I'd also pose another question: Why are we so keen on seeing the downfall of American power? Is it self-loathing? Distaste for bullies? Loneliness at the top? What is it? 17. ### 7DZRegistered Senior Member Messages: 30 Realistically it is difficult to imagine the Euro surpassing the US dollar as the preeminent currency because of the political complications of the European Union. When you have one or two countries running continous deficits (due to political pressure or whatever), then the entire EU suffers and sooner or later another member will argue that if they can do it so can we - and the result is a considerable weakening of the value of the Euro (and without economic fundamentals if speculators keep the Euro inflated, sooner or later there will be a crash). If the various nation states were to surrender sovereignty and form a United States of Europe, a federated Europe, then it would be a different story. In fact, at this time, America's power is being weakened from within. It is the accounting scandals of Enron and the like, more than anything else, that have caused the flood of money out of the US. On the issue of oil, I think by the next ten years, engineering advances from Japan and the US (arguable motivated by world politics) will see a shift from petrol to hydrogen based cars. Therefore I think the wealth of oil will soon diminish, for better or worse. === http://www.australiancurrentaffairs.net/ 18. ### SG-NRegistered Senior Member Messages: 1,051 How The Euro Will Destroy America's Power ? In 20-30 years : - No more petrol... - China is the biggest cunsumer state and has better relationship with Europe than with USA -Eastern European countries get stronger - € stronger than$ so that US can't create new green money whenever they want
That's the answer to the question...

19. ### Psycho-CannonHome grown and PsychoRegistered Senior Member

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Hmmm i'm not sure we are going to go to Hydrogen so soon its not as practical as people seem to think, i read a post about it on the science forums a while back, heres the important part.

There are alternatives to Hydrogen that are still better than Fosil Fuels but we will have to see where this all goes.
What will be interesting is what will happen when the world is out of Oil except for the few countries like the USA that are starting to horde and preserve their own natural pools and importing from the rest of the world instead?

20. ### Proud_SyrianGuest

Thanks Rob, I hope this process will speed up, we in the middle east and in fact most of the world are FED UP, SICK AND TIRED from America and its arrogant power, it is the time for someone else to take over, America is deeply rotten now.

Syrian Greetings to the people of Ireland.

21. ### Proud_SyrianGuest

This is BS.

Now Europe is 25 countries, they already put America in their small pockets.

We, in the arab world as well, are thinking to ask for EUROS in return for our oil, OPEC also are studying this possibility...so say GOOD BYE to your satanic dollar.

22. ### Proud_SyrianGuest

Not for long so...soon, they will flash your dollars down the toilet.

23. ### Proud_SyrianGuest

As an Arab and Muslim, I can answer by saying:

It is distaste for ugly fat bully and killer.