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Europe Finally Has an Excuse to Challenge the Dollar

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Re: Europe Finally Has an Excuse to Challenge the Dollar

#131
post #60

Sounds about as likely as that EU army that was supposed to make the EU independent of NATO, and thus, the US. How's that working out? The EU constantly talks about challenging US power (Macron and Merkel in particular), but almost never do. I'm sure this will be more of the same.

Well for one because with the current leadership in the US there is for the first time in history enough incentive to actually push through.

Like I've said, the EU said the same thing about an EU army and that army is nowhere to be found. Even on the petty insults Europe falters, like when they all got pissed about the US leaving the Paris Climate Accords and yet the US lead the world on reducing climate emissions.

The unfortunate (for them) truth about the EU is that outside of its economy, the EU is irrelevant on the international stage. People want access to their market, but Europe cannot project any force outside of their own borders. Outside of maybe Iran, there isn't a single country in the world that curbs their actions due to fears about what the EU will do. Even countries inside the EU act without fear of what the EU will do, just look at Poland.

I'd even venture to say most people in the world don't even know it exists. People know about Germany, France, and those countries individually, but people only know about the EU because of the news Brexit caused.

The United States has allies AND leadership in every region of the country - Europe doesn't. If all this commotion has to do with the Iran deal, the other major players in the region (Israel, Saudis, and UAE) all have close ties to the US and will be following American leadership and ignoring whatever Europe says. So I don't even see how Europe successfully protects Iran in this case.

So sure, Europe can talk all it wants about how they want to get rid of US leadership. But American leadership is felt all over the world, and major countries in almost every region will follow the US and not Europe.

Sometimes having a big ass army, economic and cultural hegemony, and a history of being in other people's affairs gives you some clout.

Re: Europe Finally Has an Excuse to Challenge the Dollar

#132

Earlier quoted context omitted.

Why does the US get to unilaterally decide who gets sanctioned and who doesn't? Europe has a lot more to loose on an unstable Iran than the US and can't risk deals being undone because the US has a new regime every 4 years.

Imagine a wrestling match. 2 wrestlers fight for some good amount of time. When they're tired enough, a 3rd wrestler gets in and beats both. That was World War II for the most part. After World War II, most of the world was destroyed except for the US. After the war, the US never left. Overseas bases still exist in Germany, Japan and many other places. They had everyone adopt a financial system (Bretton Woods) which…

Great summary, do you have any book recommendations further on this? I've got "confessions of an economic hitman" to read but wondering if you have any other suggestions?

Re: Europe Finally Has an Excuse to Challenge the Dollar

#133
post #99

Earlier quoted context omitted.

Well the UK is about to leave the team, without it the EU is significantly weaker...

Or perhaps significantly stronger. The UK was historically the naysayer of the EU, opposing more integration. Now the strongest Economies are Germany and France which are both very much in favor of a closer EU. If this leads to the EU being quicker in decision making and pooling more of their resources it could mean a big boon to the EU. On the other hand the UK used to be kind of a watchdog of the EU so that role mi…

The only thing Europe has going for it is the size of its economy, and Europe is about to lose almost 16% of it. For comparison, that's a larger decrease than California leaving the United States economy. That's before we talk about how how the UK was their biggest cultural driver and had one of the strongest (maybe the strongest) militaries.

The EU will not be stronger after the UK leaves.

Re: Europe Finally Has an Excuse to Challenge the Dollar

#134
post #68

Earlier quoted context omitted.

« pushing closer to the ennemi », yet i don’t think any european citizen will understand why we prefer to start a judiciary war against the US just so that we can help a muslim theocracy broaden its influence in the middle east. It doesn’t serm to me that the public opinion in europe is really heading toward that kind of opinion.

It's not about the type of government in Iran, it's about being sovereign in our own affairs.

Also about USA living at the expense of the rest of the world, printing their currency willy-nilly without the risk of devaluing it because all the main goods are priced in usd.

See how dollar plunges and US deficit becomes painful when usd is detangled from oil.

Then we will finally know if one can eat aircraft carriers and holywood movies.

Re: Europe Finally Has an Excuse to Challenge the Dollar

#135

Earlier quoted context omitted.

Given the unpopularity and utter ineptitude of the UK's brexit "negotiations" I'm tempted to say might be in the process of leaving. They're making such a mess, I would not be the least surprised to see the DUP withdraw support and a surprise election result. The Labour conference seems to be moving them towards a second referendum. 18 months ago I thought claims "it might not happen" foolish, now I'm starting to thi…

They are in the process of leaving. They activated article 50, which automatically starts a process of departure lasting 24 months. This period can only be prolonged by unanimity vote, I'm not even sure it can be cancelled. Concerning the prolongation, not going to happen. Also there's no way the rest of EU is going to accept for UK to stay in the EU with the same privileges as previously (non use of euro, tax exempt…

I'm not even sure it can be cancelled.

Both Junker and Tusk have repeatedly stated that they'd be happy to cancel the Article 50 negotiations at any time and let the UK stay in the EU under its current terms.

Re: Europe Finally Has an Excuse to Challenge the Dollar

#136
Historically the US-Dollar became dominant in the 50/60ties when the oil exporting countries were partially forced, partially by their own preference staring factoring their oil bills in USD. One reason among others was that only the USD market was big enough to provide enough liquidity for the oil market. Other exporters then started billing their export goods in USD Dollars so they could pay their oil bill with the Dollars earned.

Ever since this becoming more a self sustainable system by which more goods were billed in USD because more exporters wanted to buy imports billed in USD. The US itself as only country as extraordinary privilege in the world could just print the currency at will, while others had to sell products to earn the currency.

The other side of the deal was, that Europe an Japan were using their economic capacities producing civilian goods, whereas the U.S. could buy these goods with printed money and could use the capacities to build up an otherwise unsustainable large military sector to protect their allies.

As another effect, USD trades are ultimately settled buy the U.S. Fed, so the U.S. can effectively get countries or companies out of the market as long the settlement is done in USD.

Fast forward today: The Euro is as big as USD. With EUR or CNY you can buy all products you want to have. When Russia, Venezuela and Iran decide to sell Oil or Gas there is little technical need to stick for USD. Further Trump cutting the U.S. side of the deal. Why should Europe other further grant the extraordinary privilege to the U.S? And why it would put it's own countries and companies a the risk of Feds goodwill to perform the settlement? Given Trumps apparent will to use the USD as a weapon, it is a question of national security for Europe, UK, Japan, Iran and the BRICS to change to a different regime.

My personal expectation is that settlement in EUR will be only transitional before SDRs issued by the BIS will become the final currency of choice. These will resemble the "Bancor" proposed by Keyenes before the Bretton Woods system was implemented

Re: Europe Finally Has an Excuse to Challenge the Dollar

#137
post #68

Earlier quoted context omitted.

« pushing closer to the ennemi », yet i don’t think any european citizen will understand why we prefer to start a judiciary war against the US just so that we can help a muslim theocracy broaden its influence in the middle east. It doesn’t serm to me that the public opinion in europe is really heading toward that kind of opinion.

Public opinion in Europe ain't very positive about Trump either, every other day its another eye roll because of what that ego maniac did/said/didn't, how rude and unfair he is. This is what people see. On the other side, what specifically Iran did do to deserve this? Yes they meddle around their neighbors, just like every other country. US is the last who should be blaming others for this, Iran is at least home and…

you do realize iran is trying to get the maximum influence by destabilizing its neighbours ( such a lebanon and yemen), in a region crippled by war for centuries, while at the same time oppressing its own people (and women in particular) ?

i really don’t think europe should go to economical war against the US to save this regime’s *ss and sell them a few cars. Note that my reasoning would be absolutely identical if US decided to do the same with saudi arabia...

Re: Europe Finally Has an Excuse to Challenge the Dollar

#138
post #59

Earlier quoted context omitted.

It’s about Europe choosing sovereignty over their own international politics rather than cow towing to the US. It’s not the EU preferring Iran over the US

But if the means you choose to demonstrate your sovereignty is to defy a new wave of American sanctions on Iran, then you certainly are choosing Iran over the United States, as a brief glance at any recent news headlines will tell you. The current POTUS, and the large number of congressmen who hate Iran with a rather deranged fervour, will certainly interpret it that way.

It's not all black and white. I'd say it's not choosing Iran over the US, it's more a matter of distancing away from the US.

Re: Europe Finally Has an Excuse to Challenge the Dollar

#139
post #137

Earlier quoted context omitted.

Public opinion in Europe ain't very positive about Trump either, every other day its another eye roll because of what that ego maniac did/said/didn't, how rude and unfair he is. This is what people see. On the other side, what specifically Iran did do to deserve this? Yes they meddle around their neighbors, just like every other country. US is the last who should be blaming others for this, Iran is at least home and…

you do realize iran is trying to get the maximum influence by destabilizing its neighbours ( such a lebanon and yemen), in a region crippled by war for centuries, while at the same time oppressing its own people (and women in particular) ? i really don’t think europe should go to economical war against the US to save this regime’s *ss and sell them a few cars. Note that my reasoning would be absolutely identical if U…

> while at the same time oppressing its own people

That's the thing, though. Iran clearly isn't some redeemable den of evil, the populace used to be both well-educated and friendly towards the west. It might take a (democratic) regime change to restore relations to anywhere near "good", but at this rate you could say the same about the US.

Re: Europe Finally Has an Excuse to Challenge the Dollar

#140

Earlier quoted context omitted.

Russia invades another country. You are the President of the US. Your options are: 1.) Do nothing. Poland, and the parts of Germany that used to be East Germany, might not like the long term consequences of this plan. 2.) Start a nuclear war, killing hundreds of millions of people. A few disadvantages to this plan as well. 3.) Economic sanctions. You can certainly say this will kill people by way of depressing GDP gr…

The USA invades at least as many countries as Russia.

Please tell me, what countries had their parts annexed by USA in last century?
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