AZspot AZspot

blue bits. red rocks.
Sunday 29 July 2007

With the euro, whose importance as a trade and reserve currency has increased strongly, there is for the first time a potential competitor to the dollar. The largest dollar reserves worldwide are held by Japan and China because of their gigantic export surpluses. Even a partial conversion of these reserves into euros would substantially weaken the dollar and undermine the hegemonic position of the USA. A collapse of the USA would not suit the Asian and European export-oriented economies, but a weakening of its power would. But the hegemon will not just submit to such a process. Already the last Iraq war was not only fought for access to cheap oil, but also in order to defend the dollar as an oil-trading currency. Michael Heinrich

A GNT creation ©2007–2011