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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

#141

Post by gandhium »

quantummkv wrote: post #120
chvid wrote: post #65

Earlier quoted context omitted.

Whoa. Downvotes ... As if world power had something to do with technicalities, IT-systems, which currency to transact in. Sorry guys. This is not how the world works. The USD is dominant currency not because of the lack of alternatives. The USD is the dominant currency because USA is the dominant military power by an order of magnitude. As long as that is the case it means the EU can get only token independence. Ulti…

You know the brits used to have such delusions back in the day. Look where they are at now. >The USD is the dominant currency because USA is the dominant military power by an order of magnitude. Wrong. The USD was dominant currency because USA was the only major country untouched by WW2. Every other major country had it's infrastructure bombed and shattered. It is the dominant currency today because everyone is lazy…

> Every other major country had it's infrastructure bombed and shattered.

Spain? Portugal? Brasil? Australia?

> your armed superiority is a joke.

Ah, comrade, I understood now. Check the score of recent clash with your "Wagner" mercs. How many US lost? Yes, zero.

Re: Europe Finally Has an Excuse to Challenge the Dollar

#142

Post by krageon »

bsaul wrote: post #68
close04 wrote: post #33

Earlier quoted context omitted.

These measures usually have 2 unpleasant side-effects for the initiator: they trigger some form of retaliation and they push the other party closer to the enemy. In this case it could come back to harm the US tech sector for example, and it would push EU closer to China and Russia.

« 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.

Very few people love the US' meddling in politics. If we have good trade deals, presumably those were made by our politicians deciding they are alright. We can have opinions about that, but they are separate from this issue. This is the US trying to bully the EU into doing what they want, which is something that should be opposed.

Re: Europe Finally Has an Excuse to Challenge the Dollar

#143

Post by close04 »

true_religion wrote: post #125
decentralised wrote: post #121

Earlier quoted context omitted.

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

Well you are soverign, and thus free to trade with Iran over the USA. It is really up to Europeans to decide if leaving their closest historical ally and trading partner is a good thing, just ao they can grow closer to Iran. I would be really disappointed if it goes that way though.

It would appear that one man was allowed to turn an alliance into a hostage situation. So I guess all bets are off. And again, this is not about getting close to Iran. It's about not having your "ally" try to dictate all critical aspects of your existence.

You wouldn't want your friends overriding you on what to eat, what you drink, where you sleep, and who you talk to, would you? You'd question the nature and value of that friendship.

Re: Europe Finally Has an Excuse to Challenge the Dollar

#144

Post by decentralised »

true_religion wrote: post #125
decentralised wrote: post #121

Earlier quoted context omitted.

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

Well you are soverign, and thus free to trade with Iran over the USA. It is really up to Europeans to decide if leaving their closest historical ally and trading partner is a good thing, just ao they can grow closer to Iran. I would be really disappointed if it goes that way though.

I wouldn't think that is a likely possibility given the impact tariffs would bring to all of us. What is more likely (and lets keep in mind we are discussing public policy of economical super powers) is that we would reach an agreement that the unilateral blockades and sanctions are really unilateral.

Re: Europe Finally Has an Excuse to Challenge the Dollar

#145

Post by axtn »

bsaul wrote: post #68
close04 wrote: post #33

Earlier quoted context omitted.

These measures usually have 2 unpleasant side-effects for the initiator: they trigger some form of retaliation and they push the other party closer to the enemy. In this case it could come back to harm the US tech sector for example, and it would push EU closer to China and Russia.

« 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.

> 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.

European citizens don’t seem to care that much about the EU’s tight relationship with Saudi Arabia... Why should they feel differently about Iran?

Re: Europe Finally Has an Excuse to Challenge the Dollar

#146

Post by Havoc »

westiseast wrote: post #92
Havoc wrote: post #56

Earlier quoted context omitted.

>The ubiquity of US dollars in international trade allows US to torpedo the economy of any country it so desires. And that's exactly why this is necessary. The above is only cool if you're part of the ~5% of the world that is American.

It’s been a fair trade off of benefits/drawbacks in the past - you don’t have to hold gold, you can hold a currency that is stable and reliable, you can use it to trade around the world for modern goods and services. You put yourself at the mercy of the US, but if the US follows international rules and acts multilaterally and you’re not North Korea, the risks are small.

>It’s been a fair trade off of benefits/drawbacks in the past - you don’t have to hold gold, you can hold a currency that is stable and reliable

I'd contend that holding a basket of currencies is even more stable and reliable. Basic diversification logic would suggest that a basket of USD / EUR / GBP / AUD / CAD / NOK is safer than just USD.

Re: Europe Finally Has an Excuse to Challenge the Dollar

#147

Post by grecy »

qubax wrote: post #128
grecy wrote: post #95

> The cost of defying American sanctions can be steep: in 2015, BNP Paribas SA, the French bank, paid a penalty of almost $9 billion for violating U.S. sanctions against Iran, Cuba and Sudan I'm cruious, who imposes that fine and how do they enforce payment? Can the US Government FORCE a French Bank to pay them a fine? Surely a French bank could just say "no thanks".

> I'm cruious, who imposes that fine The executive branch can ( via executive order, treasury sanctions, etc ) and of course congress can. > and how do they enforce payment? By threat of financial collapse. > Can the US Government FORCE a French Bank to pay them a fine? Yes and no. Are we going to invade france and force the bank to pay the fine? No. Could we threaten to place sanctions on the bank and exclude it fro…

Thanks very much for the detailed answer, I had no idea how it worked.

So it seems likely that nothing will change until the US is not the heart of the international financial system...

Re: Europe Finally Has an Excuse to Challenge the Dollar

#148

Post by plopilop »

dagw wrote: post #135
plopilop wrote: post #119

Earlier quoted context omitted.

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.

Yes but given that prolongations must be voted by unanimity, wouldn't be logical that cancellation should be, too? I really don't know if that would be attainable.

Re: Europe Finally Has an Excuse to Challenge the Dollar

#149

Post by plopilop »

NeedMoreTea wrote: post #123
plopilop wrote: post #119

Earlier quoted context omitted.

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…

No way to one of the largest net contributors of the EU budget? I wouldn't take that bet. Sure things in politics have a way of biting back. It's vanishingly unlikely in the time remaining, but I would not be surprised to see huge amounts of flexibility magically appearing, if the UK somehow gained a different administration supporting remain or a second referendum. Even at this stage.

Honestly, given how the negoctiations led by Michel Barnier on the EU side has been openly skeptical towards Brexit negociations, I doubt it.

Re: Europe Finally Has an Excuse to Challenge the Dollar

#150

Post by sigvirt »

menotyou wrote: post #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…

There is similar premise in James Rickards 2014 book The Death of Money. He describes trade dynamics and international organizations, including the Bank for International Settlements and their unit/basket of reserve currencies called Special Drawing Rights. Several years ago China was on about having the Yuan declared a reserve currency so it would be included as one of the currencies which comprise an SDR unit.
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