Why the Euro Won’t Replace the Dollar
Today's Financial News - Posted July 25, 2008
“A more immediate concern is the growing divergence of European economies. Two big European economies, Italy and Spain, are perceived as more risky than the two core members of the Eurozone, Germany and France.” — Lord William Rees-Mogg
by Lord William Rees-Mogg
Baltimore and London — (TFN): In the last year, the euro has decisively outperformed the dollar and the pound. Some commentators have argued that this means that the euro is the currency of the future, and that the dollar has been relegated to second place. However, there are problems about this argument.
The United States is incomparably the stronger defence power; indeed the U.S. is now the only defence superpower in the world. As Britain found at the height of imperial power, it is not always easy to convert defence capacity into financial strength. Nevertheless, it was the sails of the British navy that maintained world peace in the nineteenth century and made the gold standard possible.
In 1797 the Napoleonic War led to the suspension of gold convertibility, which was not resumed until after the Battle of Waterloo in 1815. Gold convertibility was again suspended in 1914, on the outbreak of the First World War. Britain was able to maintain gold convertibility for the hundred years of relative peace, which allowed the industrial revolution to spread around the world. In the 1860s, the United States had to suspend gold convertibility, during and immediately after the Civil War. The euro is now protected by U.S. defence capacity.
A more immediate concern is the growing divergence of European economies. Two big European economies, Italy and Spain, are perceived as more risky than the two core members of the Eurozone, Germany and France. Read on to learn why.
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March 24th, 2009 at 12:22 pm
It is an absolute certainty that Euro will replace the U.S. dollar. The concern should be when and not if.
If the country of China alone stops accepting the U.S. dollar (when doing import and export) that alone will crush the U.S. dollar.
It’s already happening in the world of import and export. In the olden days the U.S. dollar would be what all countries would trade in. Many companies across the globe have converted to the Euro. Either you trade in Euro or they won’t do business with you.
It won’t be just the U.S. converting to the Euro it will be all countries of the world.
Greenspan himself reported in 2007 that the Euro could replace the U.S. dollar.
I fear that it is a mathematical and economic certainty that this will happen.
A bankrupt U.S. will no longer be a superpower, and will force us closer and closer into an alliance with the European Union.
United States of Europe here we come !!
Just my thoughts