Eurasia: A Geo-political re-alignment

[Lauren Johnson]

A couple of more commentaries:

from the [URL="http://www.moonofalabama.org/2014/07/germany-getting-ready-to-divorce-us-ally.html"]Moon of Alabama
[/URL]

rom recent talks and discussions in Germany I conclude that the U.S. is losing more and more support and sympathies. The admiration of earlier times has turned into disgust. While a lot of higher politicians and some journalists still cling to some (well paid) myth of U.S. friendship the party base in all political parties as well as the general public has changed its opinion. The NSA spying headlines are only one, though important issue. Consider how you would feel about such an intrusive "ally":

• German intelligence employee arrested on suspicion of spying for US on Bundestag NSA committee
  
• NSA whistleblowers testify in Bundestag inquiry, disclose totalitarian' surveillance
  
• Germany NSA's main target, claims ex-staffer
  
• Irked by N.S.A., Germany Cancels Deal With Verizon
  
• German parliament drops US telecom firm Verizon over links to NSA spying
  
• NSA Turned Germany Into Its Largest Listening Post in Europe
  
• Report: NSA targeted German privacy activist
  
• NSA targets Tor administrators and people searching for privacy tools, reports claim
  

The German constitution, as interpreted by the constitutional court, defines privacy as a basic human right. That the U.S. is so casually violating the basic human rights of all German citizens is met with utter disgust. Even the paid and trained Atlantic Council (a U.S. lobby) trolls in German news-site comments have problem defending this issue.

But the NSA spying is not the only problem. The economic breakdown after 2008 clearly had its roots in the United States and is, in Germany, blamed on lax U.S. regulations. And while Germany itself pressed for a change in government in Ukraine the outbreak of violence, the bloody coup and the fighting in the east is considered as "Fuck the EU" U.S. intervention in European affairs.

It may still take a decade or more but my sense is that the U.S.-German alliance in on its way to an unfriendly divorce. Something that 15 years ago seemed unthinkable.
Posted by b on July 4, 2014 at 11:28 AM | Permalink

and from Zero Hedge

Not even we anticipated this particular "unintended consequence" as a result of the US multi-billion dollar fine on BNP (which France took very much to heart). Moments ago, in a lengthy interview given to French magazine Investir, none other than the governor of the French National Bank Christian Noyer and member of the ECB's governing board, said this stunner at the very end, via Bloomberg:

• NOYER: BNP CASE WILL ENCOURAGE DIVERSIFICATION' FROM DOLLAR
  

Here is the full google translated segment:

Q. Doesn't the role of the dollar as an international currency create systemic risk?

Noyer: Beyond [the BNP] case, increased legal risks from the application of U.S. rules to all dollar transactions around the world will encourage a diversification from the dollar. BNP Paribas was the occasion for many observers to remember that there has been a number of sanctions and that there would certainly be others in the future. A movement to diversify the currencies used in international trade is inevitable. Trade between Europe and China does not need to use the dollar and may be read and fully paid in euros or renminbi. Walking towards a multipolar world is the natural monetary policy, since there are several major economic and monetary powerful ensembles. China has decided to develop the renminbi as a settlement currency. The Bank of France was behind the popular ECB-PBOC swap and we have just concluded a memorandum on the creation of a system of offshore renminbi clearing in Paris. We have very strong cooperation with the PBOC in this field. But these changes take time. We must not forget that it took decades after the United States became the world's largest economy for the dollar to replace the British pound as the first international currency. But the phenomenon of U.S. rules expanding to all USD-denominated transactions around the world can have an accelerating effect.

In other words, the head of the French central bank, and ECB member, Christian Noyer, just issued a direct threat to the world's reserve currency (for now), the US Dollar.

Putting this whole episode in context: in an attempt to punish France for proceeding with the delivery of the Mistral amphibious warship to Russia, the US "punishes" BNP with a failed attempt at blackmail (recall that as Putin revealed, the BNP penalty was a used as a carrot to disincenticize France from concluding the Mistral transaction: had Hollande scrapped the deal, BNP would likely be slammed with a far lower fine, if any). Said blackmail attempt backfires horribly when as a result, the head of the French central bank makes it clear that not only is the US Dollar's reserve currency status not sacrosanct, but "the world" will now actively seek to avoid USD-transactions in order to escape the tentacle of global "pax Americana."

And, the biggest irony of all is that in "punishing" France for dealing with Russia, that core country of the Eurasian alliance of Russia and China, the US merely accelerated the gravitation of France (and all of Europe) precisely toward Eurasia, toward a multi-polar (sorry fanatic believers in a one world SDR-based currency) and away from the greenback.

Meanwhile, the DOW yawns and closes above 17,000.