Global Finance, Geopolitics and “The Big American Retreat”

Nevertheless, if one excludes the United States based on a status quo in their favour (15), a truly international system can’t be created without the Eurozone, whose currency accounts for around 30% of world trade and reserves (16), the number two international currency far ahead of its pursuers. Yet, and we analysed it at length in the last GEAB issue, the Euro remains more a support for the Dollar than an alternative, in particular by its inability to impose itself on its own international trade instead of the Dollar, which leads to this paradox: the huge European trade dynamic directly serves Dollar sustainability (17). The shift towards a multipolar monetary system therefore still depends, for the time being, on Euroland’s decision to abandon the Dollar and join the bandwagon of the inevitable current monetary change, led primarily by China.

Banking union which is slowly progressing (18) is the opportunity to strengthen the single currency and make it play the true role to which it lays claim when European decision-makers of another era (19) invented it; as well as the beneficial impact of the 2014 European elections which will distance the Eurozone from the EU a little further. The end of 2014 or, at the latest, 2015 is, therefore, the date when the Euro will finally play its part in exiting the international monetary system from the Dollar’s rut.


Notes :

1 From Goethe.

2 Called at the time: 2013, the first steps of a “world afterwards” in complete chaos.

3 Source : Gulf News, 01/12/2013.

4 In fact the preceding article explains that economists already want to abandon the peg to the dollar…

5 Source : Business Day, 01/12/2013.

6 From China especially : CNBC, 29/11/2013.

7 Source : Caixin, 10/12/2013. See also Le Monde, 13/12/2013.

8 Some even think that the West won’t be able to manipulate the gold price for much longer… due to its lack of physical gold. Source : Peak Prosperity, 06/12/2013.

9 Gold can be used to support a currency in the process of international (re-) legitimisation but once it reaches international status, it de facto recreates confidence in currencies. Gold is then relegated to its role of “barbarous relic”, leaving currencies to rely on the true riches of modern times: energy, production quantified as wealth, etc… The collapse of the economy’s actual productivity (US) on which the international currency (Dollar) was based explains the huge monetary crisis in the world and which the Yuan’s emergence is largely meeting, providing the base for a re-securing of currencies to economies. The problem is that in reaching international status, the Yuan will cause the Dollar and the US’ virtual economy to collapse, which will inevitably affect the rest of the planet. This is why, at this stage still, LEAP is continuing to advise its readers to diversify part of their assets into physical gold to lessen the shocks in view in 2014, but one must also know the time to sell.

10 Commented on in the GEAB n°79. Sources : The BRICS Post (29/06/2013), The BRICS Post (12/11/2013).

11 On this issue, following the attacks on European ratings by the American rating agencies, Europe was amongst the first to propose creating an alternative agency. Unfortunately, in April 2013, it found it impossible to finance a European rating agency: too expensive, too complicated! Since then, the Chinese, the Russians and the Africans (with WARA, etc., have all launched their own rating agencies structured on global networks (for example within the framework of the UCRG to create a rating system adapted to the multipolar world… without European participation: Europe isn’t part of the multipolar rating system that has been emerging for some time. It’s disappointing and still and always asks this question: who prevented the creation of such an agency in Europe? Probably the same who are trying to sneak the Transatlantic Treaty past us, the areas of anti-Russian free trade with the Ukraine, Moldavia, Armenia and Turkey’s EU integration, etc and who really hope to see Europe definitively exit world affairs. Pointing at European leaders, we reiterate our recommendation to launch such an agency as soon as possible! And don’t tell us that Europe has neither the resources nor the expertise to carry out such a project…

12 Source : Reuters, 03/12/2013. Note, contrary to what is generally understood, the Yuan isn’t (yet) the second currency for international trade and by far: here, it’s simply a matter of a certain kind of transaction and not all international trade (source : Le Monde, 03/12/2013). Nevertheless, the Yuan’s rise is very impressive.

13 Source : Reuters, 03/12/2013.

14 Source : CNBC, 11/12/2013.

15 In reality they don’t really have a choice whilst their power rests on their ability to maintain dollar supremacy.

16 Cf. GEAB n°62 (February 2012).

17 It’s certain that this aberration has the significant advantage of avoiding the European common currency becoming overvalued. But it’s really the only advantage…of which one may wonder if it really offsets those which would have led the Euro to independence.

18 And which distances the EU further and further… Source : EUObserver, 11/12/2013. We will deal with this subject in greater detail in the Telescope section.

19 Mitterand, Kohl and others, at the end of the 80s and the beginning of the 90s.

Source: Global Research