Most Americans have no idea why the world switching from the dollar to the euro as the global reserve currency, just like they have no idea why excessive government intrusion into their personal lives in the form of mandated health care is bad or why $14 trillion and growing in national debt is bad.
Yet, Vladimir Putin, de facto ruler of the worlds 12th largest economy is warning of the fact that Russia may abandon the dollar in favor of the euro and eventually join the Eurozone.
“So what?” you might say.
Well, the so what is that almost everything you probably think of as being part of your standard of living and current way of life derives from the fact that the rest of the world currently views the dollar as the standard for international trade. Oil, food, and industrial commodities are all bought and sold in dollars, and it is the strength or weakness of the dollar that determines the ebb and flow of international markets.
In short, it is the dollar, and therefore the United States, that dictates the rest of the worlds economy, up to and until the world switches to another standard. The other standard most likely to replace the dollar is the euro, and the moment that switch takes place, it will be the EU dictating terms to us.
Now, I know that there are people who think this is a good thing; who think the US needs to be brought down a peg. Unfortunately, those people do not consider the consequences of their thinking. The euro replacing the dollar will not mean that we suddenly will live in a more egalitarian world. On the contrary, such a change will simply mean that the powerful nations of Europe are calling the shots instead. The last time I checked, Europe’s record of calling the shots was a pretty bad one.