Global Systemic Dislocation: Economic Implosion in the EU, Internationalization of the Yuan, Crumble of the Dollar
By Global Europe Anticipation Bulletin (GEAB)
December 12, 2013
“It was night, and the rain fell; and, falling, it was rain, but, having fallen, it was blood.”
These words of Edgar Allan Poe (1) apply perfectly to the slow process of global dislocation now in progress, where seemingly innocuous events – like the “rain” – combine to undermine the foundations of an international system that is dying, hence the “blood.”
If the process is slow, if the events seem trivial, it is paradoxically because the crisis is the first truly global systemic crisis, one much deeper than the one in 1929, affecting all countries and overwhelming the heart of the system. Whereas 1929 was the adolescent crisis of a new world power, the US, we now experience the last days of an incurable, and incurable that had been the world’s sole superpower since 1945. But the whole organization of the world was built around the US, and it is no one’s interests for it to collapse before a complete decoupling. So it is for everyone to safeguard the usual appearances while ensuring a smooth transition, which explains the slow crash in progress.
It’s a little like the parent who sneaks out of the nursery, hoping to avoid waking the baby and starting up the bawling again, but the baby is the dollar, and the parents are unworthy, for they are abandoning it altogether.China is the master of this art, but we can see that all other countries are moving away from the US, in a more or less subtle fashion, like Saudi Arabia for example. (2) For the EU, one of the last Americanist bastions outside the US itself, the task is more difficult. Our team anticipates that the European elections of 2014, along with the inevitable rise of extreme right-wing and euroskeptic forces, will lead to an implosion of the current EU framework, with the possibility for Euroland to fill in the place. We analyze in detail the case of Europe in this issue.
The rapid internationalization of the Yuan, causing a decline in the central role of the dollar; the loss of Saudi support, a key part of the petrodollar edifice; and the loss of the Americanist bastion of the EU, replaced by a Euroland relying on the Euro, are all threats to the three remaining essential pillars of American power, which will disappear in 2014, precipitating considerable global upheaval.The US is betting that the potential barrier (3) between the status quo and the world thereafter is too painful to go through, and that countries, despite all of the benefits that would accrue in the new organization of the world, will not cross that Rubicon.