1 of 8

Write now Article Tools

First and foremost, lets get back to perspective: it is not the US Government that impose the US Dollar on the world, but rather the world that had adopted the US Dollar as their collective global currency of exchange convenience, because until the Euro actualized in 2000AD, there wasn't any credible rival global currency.

Will the Euro soon replace the US Dollar as the global currency?

It depends, whether in totality, partially or selectively.

If we look back to history, the essence of international trade is about the fair exchange of goods and services between two independent sovereign states and for long term sustainability, there must be mutual perceived equity in the exchange of goods and services for payment.

The two Opium Wars in China taught us valuable lessons about the unsustainability of trade and balance of payments imbalances.

England was drained dry of its silver to China in pursuit of her addiction to Tea.

The English reversed the flow of silver by addicting the Chinese with Indian grown opium and the Chinese retaliated with prohibition, the British reciprocated with war and were enriched with war reparations imposed on the militarily weaker antiquated Ching Dynasty regime.

However,neither the US Dollar nor the Euro are silver dollars; but mere pieces of printed paper fiducially issued. So technically, so long as there are fools out there in global market outside Europe and USA who are willing to exchange their goods and services for pieces of printed papers, it matters not which currency will replace which, so far as USA and Euro domained Europe are concerned. US and Europe are more than happy to print more paper to exchange for goods and services that satisfy.

My take is, it will come a time where neither the US Dollar nor the Euro will be the global currency, but a one world currency that every nation subscribe to, akin to the one time SDU (Special Drawing Rights)when producing nations wake up and realize that they had a raw deal holding on to pieces of worthless papers whereas the consuming nations are grinning from ear to ear from the satisfaction of consumption paid with "monopoly" money.

Had it not been that demand for US Dollars is sustained indirectly by the denomination of major global commodities like oil in US dollars, the US dollar would have collapsed long ago by the pure mechanism of the invisible arms of supply and demand.

The deficits in the balance of trade and balance of payments of USA vs the world would have imploded the derived demand value of the US Dollar, but it is not happening as yet, because major supplying nations like China and Japan had lend money to the USA by way of bonds purchase to enable US to continue its addiction to consumption and the continuous high demand for the US Dollar as the medium for the settlement of payments even for goods and services not manufactured or supplied in or via USA.

The US Government would want to stem the flow of Euro adoption in substitution of the US Dollar, but this will be riding against the tide.

Europe will eventually face the same identical problems that US had encountered and the end result will be the adoption of a truly international neutral currency of exchange as everybody dumps the Euro too.

Learn more about this author, Alex Kee.
Click here to send this author comments or questions.

Add your voice

Know something about The Euro will soon replace the US Dollar as the global currency?
We want to hear your view. Write now!