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SDR
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 Posted: Sun Mar 27, 2005 12:03 pm Post subject: "A game of global 'chicken'. . ." |
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In a piece called "Collision Course" writer Stirling Newberry ("BopNews," "The Agonist") attempts an explanation of the current antagonism between the European community and the US, as a function of current US monetary and trade policy.
Near the end of the essay, he says "In 1987, when the US and Europe last disagreed about monetary policy, there was a stock market crash [he doesn't tell us which came first, the disagreement or the crash] that rocketed around the world. Cooler heads prevailed, and agreements were reached. This time, however, Bush has promoted the same gaggle of unilateralists that promoted this policy in the first place. . .if you want to know why Europe is increasingly estranged from the US, the reason is simple: by printing too many dollars, Bush is trying to tax the Europeans to pay for his borrow and squander policies. By appointing Bolton, Rice, Wolfowitz, and other neocons to high positions, he sends the signal that he expects Europe to capitulate."
www.truthout.org/docs_2005/032405Y.shtml
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SDR
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SDR
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Architorture
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Joined: 31 Jul 2004
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| Posted: Sun Mar 27, 2005 12:35 pm Post subject: |
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nothing new... ever since the EU went into full swing its been an all out, yet somewhat quiet, currency and trade battle...
for all the talk about how 'weak' the dollar is, the dollar's weakness right now is also the weakness of the euro... the euro has great backing and is definitely reliable, but right now its too expensive to get legs anywhere but on the european continent...
so long as the dollar stays at historic lows the euro is screwed and of course that doesn't sit very well with prominent western european countries such as france and germany....who of course the US hopes will start some infighting...
then you have poor italy who has been on the verge of getting kicked out from the start b/c they are oh so close to exceeding the fiscal margins laid out by the EU for member status...which of course would be a disaster to lose such a significant partner...and they certainly couldn't restructure to keep italy in, not after all the fuss over the eastern european countries
these are the things that make you really wonder about everyone's motives when it comes to situations like iraq and selling arms to china...
i have to disagree with the part about asia suddenly turning away from the US and the dollar though... they have so much US debt and so much of their economy is directly connected to the US it would be suicide to turn their backs on the US market by turning away from the dollar...
even if europe can offer a fine currency, they can't offer the market that the US can...
i was curious about the european unemployment numbers though...maybe richard knows better, but hasn't europe tradionally had unemployment figures in the 7-10% range? |
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SDR
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Joined: 02 Oct 2004
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Location: San Francisco
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| Posted: Sun Mar 27, 2005 12:40 pm Post subject: |
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| Could it be that these are un"traditional" times? |
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Architorture
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| Posted: Sun Mar 27, 2005 12:44 pm Post subject: |
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well i was just curious if unemployment was really that sharply up over what it is 'normally'
i guess considering everyone here was getting pretty upset over a 1% swing in unemployment a similar swing on the other side of the pond would be equally disliked... |
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SDR
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| Posted: Sun Mar 27, 2005 12:52 pm Post subject: |
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. . .maybe Richard will have some news or views. . .
SDR
_________________
"I'm the commander . . . see, I do not need to explain why I say things. That's the interesting thing about being the president. Maybe somebody needs to explain to me why they say something, but I don't feel like I owe anybody an explanation." GWB |
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Richard Haut
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Joined: 18 Apr 2004
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Location: Nice, France
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| Posted: Sun Mar 27, 2005 3:06 pm Post subject: |
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unemployment is high in parts of Europe - it has been high in France for some time. Also, serious damage to the dollar does damage to the Euro-zone.
that much is clear, but these are far from being ordinary times - and Bush is no ordinary friendly competitior.
firstly unemployment is something that goes up and down in all capitalist economies, but within certain limits. However recent changes in Britain and apparently America will make the effects of unemployment more extreme.
very heavy personal debt levels mean that the salary which may temporarily stop did not only have to house, clothe and feed a family - it also had to service the debt. For all the nonsense talked about people being covered in such situations, the reality is different. The fall in living standards for heavily indebted people is immediate and far greater than for those who balance the books or live in a cash, or virtually cash economy. I saw it happen to people in Britain - their lifestyles folded within weeks or even days and they would never be able to attain their previous living standards. The debt levels are simply too high (example of the increasing area of concern for UK debt counsellors: those who owe in excess of 66 times their monthly income - no decimal point, sixty-six times).
and that is the comparison for the US economy. The Far East does hold massive US debt, but that debt is only worth holding while America remains a credible economy. Many Far Eastern nations are ceasing to see the US economy as being rationally managed.
Far Eastern central banks are DUMPING the dollar. It is not a matter of opinion.
Iran is opting for a Middle Eastern gold-based oil-trading currency.
and the latest group to stop using dollars ? drug dealers.
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Richard Haut has worked with the architectural profession for over 25 years and produces the weekly Richard Haut's Competitions, which has given architects details of many thousands of projects for which they can apply across Britain and Europe. |
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