“Watch your back Europe”
Something is wrong! Something is wrong with the way the dollar stay strong as a global trading currency survive one storm after another. There has been a bookstore written about the falling dollar and widening of the U.S. public debt. Yet know the dollar continues to survive. Has it all to make with the power of its nation? Has it to do with the power of the world leaders and how they are able to manipulate the world trade in currency?
Politics is about power. It is according to the ancient Greeks the art of rhetoric and debate. Shipowners with the aim to convince the other of your own right with convincing arguments. The debate is war with words. It is the highest art practice within the company policy “to convince the other.” But rarely manage to convince one another of being right, because in essence it is not convincing. The political game is about power and influence all. Creating a statement, a new truth or a vote where no one can go along. To get coalitions to run the less powerful for the powerful back. That looks like a ritual dance, and behind that ritual dance is a hidden world that we can not see. Those are the things that’s really truth. This is politics in the year 2010 and this game they use to play.
The debate may well known by people but how ultimately a political decision is reached is for many people difficult to understand. Unlike a debate, the assumed political power is interdependent. They are interdependent and decision rights of majorities.
The power factor is also determined by economic and military power. The U.S. is undoubtedly the country where political power is elevated to high art. Nowhere are politicians so driven and the other to influence the general mood. This is often the hard way, while no means shunned. It often begins with an attack. An attack on the enemy’s weaknesses. Then the truth and forged coalitions to put their own hands. Different actors play an important role in this play.
Let us take the dollar as an example. The U.S. has successfully introduced the dollar as world currency. All major goods are traded in dollars. The decoupling of the dollar to the gold price (Nixon) has been a master move. Oil is a much stronger product and the linking of oil to the dollar has meant that 70% of world trade are in U.S. dollars. All attacks against the U.S. dollar have systematically declined to be to maintain power. We see many examples in recent decades, systematic attacks by the Americans. These are the many oil crises, and which, recently, the attack by the Americans on the Yuan and the Euro. There is war between the dollar and the euro. The Euro is after its launch successfully introduced. It is a good alternative to the dollar. The hegemony of the dollar is in fact decline. It is now 30% of world trade in Euros and the share of the dollar dropped to 60%. With the huge public debt of the U.S. dollar, the confidence was drifting. The dollar is already 10 years on the decline in value to the Euro.
This is difficult for a country like the U.S.. Especially if the faith in the currency decreases the huge debt and openly questioned the reliability of the currency by other countries. Some Arab countries have openly declared their oil in dollars would no longer trading and China was busy in her spare Euros to enlarge. So what do you do as an American? Then you put an attack on the weakness of your opponent as befits a political power game.
In this case it was easy. The Greek public debt and deficit in Spain was a good issue to focus on the dollar track. The Americans have made that everything in the house. The Greek government was advised by six major banks. One is the U.S. Wall Street bank Goldman Sachs. This bank had managed to get Greece to speculate on the mortgage market and speculation outside the budget books to keep. You know the story by now. We call that fraud.
But hold on, Goldman Sachs is still advisor to Greece and has taken the lead in advising the government budget to get back in order. Was Goldman not one of the U.S. banks that was safe by the U.S. government? How is that possible!
And then something else. There are three major rating agencies and all three are of American origin. Moody’s, Standard & Poor’s and Fitch. All three are they protected by laws and rating agencies perform their own (independent) policy.
It is these three offices that have reduced the credit dignity of Greece and Spain. I hear you say, ‘That was right, is it? Yeah maybe, but why has the U.S. than even the highest AAA rating? There is no difference between the financial position of Greece and the U.S.. Both have a great debts. The only difference is the dominance. Then the next attack: the media. Let a pair of independent experts say the EU’s financial system is not on orders, and a new reality is born. Just look at the clips on CNN. They speak of weaving faults in the European monetary system and divisions within the European Union. Nice try but the reality is somewhat different. And as a master of the political game, Barack Obama plays of the winner. It is he who has made sure that Europe will do its public finances. A confidence crisis in the Euro was started.
The U.S. government must refinance its public debt by an average of 140 billion a week. Five of the U.S. states are bankrupt and let their prisoners early free or do not clean the streets that often. The fact is that the EU countries are much less able to blame and that the engine of the economy is still running. Yes, there are many dangers and yes, the IMF is right to point out the dangers facts of Europe. The attack on the Euro against the dollar has been used successfully but slowly this attack ends. The underlying weakness of the dollar is up again. The Chinese don’t accept Euro devaluation. They have too much invested in this world reserve currency.
The cover is now a fact. A new attack is necessary to control the focus on somebody else than the dollar. Europe is in a war with the U.S. that protect its currency, but Europe don’t realizes that. So watch your back Europe! There will certainly be a new wave of loan reductions and a speculative attack by hedge funds on the Euro.
