Euros

A couple of articles on the question of whether the euro will replace the dollar as the exchange of choice are in today's Supporting Facts.

That was a question I asked myself back when the U.S. was trying to make a case for multi-lateral invasion of Iraq. Remember all the nasty public rhetoric about "Old Europe"? I kept wondering WTF was up? Why were our politicos making such a public ruckus that was sure to cause some serious rifts - Old Europe: bad - New Europe: good. Eventually (I'm kinda slow) it dawned on me that there was a really good motive if you had your eye on the almighty dollar. The euro seemed to be gaining stability, and oil countries were talking about replacing the dollar with euros as their choice for trade. So, it made good dollar sense to try to drive a wedge into the European Union's solidarity. Shortly after coming to that obvious conclusion, I came across an interesting article: The Real Reasons for the Upcoming War With Iraq: A Macroeconomic and Geostrategic Analysis of the Unspoken Truth by W. Clark.

I know it's all more complex than I can follow (which pretty much anything involving dollars is), but it helped to explain why the sudden nastiness about Old Europe.

At any rate, from one of today's Supporting Facts articles:

[I]f the idea that the euro could become a rival to the dollar was a joke, then the joke may be on us. In the past 18 months, the euro has risen more than 30 per cent against the dollar. The dollar was already buckling under the strain of America’s giant trade and budget deficits. Now, following the Iraq war, politics has entered the equation. Suddenly eurozone policymakers sense the opportunity to realise their ambitions to create a rival to the dollar. We should all be worried. Their efforts to promote the euro could trigger currency wars which will leave the whole world worse off.

And from the intro:

If oil and other commodity producers start insisting on payment in euros rather than dollars, the argument goes, other exporters will follow suit, central banks will alter the composition of their reserves, the dollar will start to collapse, and the US government will be forced to retrench by, among other things, cutting back on its military adventures abroad and seeking international economic cooperation. But, as the Spectator’s Simon Nixon warns, it is a strategy fraught with risk: an uncontrolled collapse of the already shaky dollar could plunge the world economy into a deep depression. The US economist Howard Wachtel, writing in Le monde diplomatique, notes the historic European economic interest in supplanting the rival American currency with its own, but is sceptical the euro can dominate because of constraints within the EU’s financial system. He could have added it is doubtful European leaders would – at least for now – seriously embark on a course of euro supremacy for fear of the profound crisis this would engender in their relations with the more powerful US.

I'm not sure which might be the more reason for concern in the eyes of the European leaders: the collapse of the world economy or pissing off the U.S.

Al Martin once upon a time wrote an article that claimed Clinton found himself in charge of an inherited economic nightmare upon taking possession of the White House that he simply could not change, nor could he expose. I have some excerpts here of it: The Case for Sedition. Of course, it can't be proven because Al cites unidentified sources, but it's a pretty interesting read, and considering what I've seen of the Bush cabal, seems entirely plausible.

....but believe what you want....you will anyway.