THE CLAIRE FOSS JOURNAL


EURO VERSUS DOLLAR: RIVALRY BETWEEN AMERICA AND 'OLD EUROPE'


Date: September, 2003

Location: excerpt from Michel Chossudovsky's book

The Euro encroaches upon the hegemony of the US dollar. Wall Street is clashing with competing Franco-German financial interests. The war in Iraq pertains not only to control over oil reserves, but also the control over currency, money creation and credit.

BY MICHEL CHOSSUDOVSKY

The European common currency system has a direct bearing on strategic and political divisions. London's decision not to adopt the common European currency is consistent with the integration of British financial and banking interests with those of Wall Street, not to mention the Anglo-American alliance in the oil industry (BP, Exxon-Mobil, Texaco Chevron, Shell) and weapons production (by the 'Big Five' US weapons producers plus British Aerospace Systems). This shaky relationship between the British pound and the US dollar is an integral part of the Anglo-American military axis.

What is at stake is the rivalry between two competing global currencies: the Euro and the US dollar, with Britain's pound being torn between the European and the US-dominated currency systems. In other words, two rival financial and monetary systems are competing worldwide for the control over money creation and credit. The geopolitical and strategic implications are far-reaching because they are also marked by splits in the Western defense industry and the oil business.

In both Europe and America, monetary policy, although formally under State jurisdiction, is largely controlled by the private banking sector. The European Central Bank based in Frankfurt - although officially under the jurisdiction of the EU - is, in practice, overseen by a handful of private European banks including Germany's largest banks and business conglomerates.

The US Federal Reserve Board is formally under State supervision - marked by a close relationship to the US Treasury. Distinct from the European Central Bank, the 12 Federal Reserve banks (of which the Federal Reserve Bank of New York is the most important) are controlled by their shareholders, which are private banking institutions. In other words, "the Fed" as it is known in the US, which is responsible for monetary policy and hence money creation for the nation, is actually controlled by private interests on Wall Street.

Currency Systems and "Economic Conquest"

Ultimately, control over national currency systems is the basis upon which countries are colonized. While the US dollar prevails throughout the Western Hemisphere, the Euro and the US dollar are clashing in the former Soviet Union, the Balkans, Central Asia, sub-Saharan Africa and the Middle East.

In the Balkans and the Baltic States, central banks largely operate as colonial style "currency boards" invariably using the Euro as a proxy currency. What this means is: German and European financial interests are in control of money creation and credit. That is, the pegging of the national currency to the Euro - rather than to the US dollar - means that both the currency and the monetary system will be in the hands of German-EU banking interests.

More generally, the Euro dominates in Germany's hinterland: Eastern Europe, the Baltic States and the Balkans, whereas the US dollar tends to prevail in the Caucasus and Central Asia. In these countries (which have military cooperation agreements with Washington) the dollar tends (with the exception of the Ukraine) to overshadow the Euro.

The 'Dollarisation' of national currencies is an integral part of America?s Silk Road Strategy. The latter consists in first destabilizing and then replacing national currencies with the American greenback over an area extending from the Mediterranean to China?s Western border. The underlying objective is to extend the dominion of the Federal Reserve System - namely, Wall Street - over a vast territory.

What we are dealing with is an 'imperial' scramble for control over national currencies. Control over money creation and credit is an integral part of the process of economic conquest, which is in turn supported by the militarisation of the Eurasian corridor.

While American and German-EU banking interests are clashing over the control of national economies and currency systems, they seem to have also agreed on "sharing the spoils" - i.e. establishing their respective "spheres of influence". Reminiscent of the policies of 'partition' in the late 19th Century, the US and Germany have agreed upon the division of the Balkans: Germany has gained control over national currencies in Croatia, Bosnia and Kosovo where the Euro is King. The US has established a permanent military presence in the region (i.e. the Bondsteel military base in Kosovo).

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The above text is an excerpt from Michel Chossudovsky's book, War and Globalisation, The Truth behind September 11, Global Outlook, Shanty Bay, 2002. All rights reserved. Copyright belongs to the author.