It’s very scary to me that no one in Washington ever talks about the possibility of what would happen if other world powers decoupled their currency from the American dollar. With the Euro at an all time high against the dollar, and it’s likely that it will get stronger, perhaps it’s time that we give this issue due consideration.
There are two drivers that are likely to make this happen. First, the European Union member states have now all signed the Lisbon Treaty. This act firmly established the EU as an up and coming power with a formalized governing body. Second, the Lisbon strategy is well under way in its execution to transform EU members into an information society with a knowledge-based economy. With a formal government structure, the continued execution of this strategy will likely strengthen and gain speed in implementation. This can only strengthen the Euro even more.
It would only take two small steps to deliver a knock out punch to the American dollar. First, suppose the EU decided to decouple the Euro from the dollar and make it the standard world currency. Second, what if OPEC decided to base the price of oil on the Euro. Impossible you say – not hardly. Rumors and rumblings of such actions have already made their way onto the news scene. It really seems that these events are only a matter of time before they unfold.
Should that happen, our dollar would sink even lower. We would effectively be knocked out as a world economic power.
God help us all should this happen.
Gary W. Griffin, Ph.D.