Fund managers predict euro will rival dollar

[Henry C.K. Liu]

The Asian Financial Crises have sparked the reemergence of regionalism.  The
G7, G10 or G20 structures, categorizing economies by wealth, are
increasingly irrelevant, as reflected since by the loss of influence of the
Trilateral Commission, the Club of Rome, and the like.  The surprised
success of the euro is stimulating new thinking about Asian regionalism,
among intellectuals and some government officials.  During the annual IMF
meeting held in Hong Kong in October 1997, 3 months after the collapse of
the Thai currency that began it all , a Japanese proposal for a regional
rescue plan was killed, not surprisingly, by the Americans in favor of the
US-controlled IMF.  Many in Asia had thought that a Japanese-led rescuse
would have been more effective and at least less damaging than the failed
IMF attempts.  That view is now reluctantly acknowledged, if still not
openly accepted, even within the IMF and the US Treasury Dept.
With the coming of the euro, the vision of an unified Asian currency has
gained momentum.
In the long run, the world may see the replay of a new Bretton Woods
agreement, but instead of a gold-backed US dollar that became fatally
wounded in 1973 by decades of US fiscal irresponsibility, this time it may
well be a USD-EURO-Asian Unit parity arranged under the umbrella of a UNO
world currency, to rid us of the destructive currency turmoil of the past
decades.  The problems to be overcome toward this vision is immense,
including a need to reorient Asian political attitudes and a historical
legacy of conflicts further poisoned by the divide and rule policies of 150
years of Western imperialism.  And the G7 now must cut the smaller economies
a better deal.
But then less than 10 years ago, no one expected the euro to be
realistically possible.
And if Europe, with its long history of wars and conflicts, can come
together for a common good, why not Asia and the world?

Henry C.K. Liu

Randy Stone wrote:


> >From Financial Times Tuesday, Nov 10, 1998:
>
> (Open quote)Global fund managers now believe the euro will be a strong
> currency in relation to the US dollar and will soon rival the dollar as
> the preferred currency for debt issuance...this implies that the euro
> could also rival the US dollar as a reserve currency by 2003.(Close
> quote)
>
> Will the euro be able to accomplish what the D-Mark could not do by
> itself?
>
> Assuming concentration and centralization of capital at three poles in
> the world market as developed by the UN Committee on Multinational
> Corporations, and the present instability of that structure due to
> stagnation in the Japanese pole, does this indicate a shift to a world
> market structure dominated by two poles, US and Europe?  If so, how will
> this affect the economies attracted to each pole that are "emerging"
> from non-capitalist political economic forms to capitalist political
> economic forms, especially China and India?
>
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