German leader warns U.S. superpower era is over

[D-Mack]

WASHINGTON, Sept. 26 (UPI) -- German Finance Minister Peer Steinbrueck has proclaimed the Writing on the Wall for the United States: America's days as an economic superpower are over, he said Thursday.

Steinbrueck said the United States will "lose its financial superpower status" as a result of the current financial crisis. He said it was now inevitable that the major industrial powers would move into a multipolar financial world with better capitalized Asian and European banking centers rivaling the United States.

Ironically, far from prophesying complete catastrophe and meltdown, Steinbrueck was much more measured and cautious than the continuing fiscal irresponsibility and illiteracy in Washington and New York justified. He merely predicted the dollar would remain as a reserve currency, but only as one among several.

Indeed, it looks increasingly likely that the dollar will not even remain the leading reserve currency. For several years, Arab nations, led by Saudi Arabia, that were alarmed by the financial measures included in the Patriot Act have quietly been transferring hundreds of billions of dollars into euros. And strongly anti-American but major oil-producing nations such as Iran and Venezuela certainly have been talking themselves in that direction.

Now Russia, the largest combined oil and gas energy exporter in the world, is talking about using its record financial reserves to create a gold ruble. The dollar has not been backed by gold since President Franklin D. Roosevelt was forced to effectively devalue it by taking it off the gold standard in 1933.

...

http://www.upi.com/news/issueoftheda...9431222441387/

I already posted a blurp yesterday in another thread, but I thought this article was better.

[phirang]

Re: German leader warns U.S. superpower era is over

I already posted a blurp yesterday in another thread, but I thought this article was better.

If the world dumps the dollar, then asia's vendor economy collapses.

[unlucky]

Re: German leader warns U.S. superpower era is over

The German finance minister did state that he doesn't think that the dollar's reign as reserve currency is over just yet.

What he's talking about is the pre-eminence of the US as a financial services center. Foreign investors believed that the US finance sector was the most savvy, efficient, and transparent in the world... It was the standard to which everyone else aspired.

"was"

[FRED]

Re: German leader warns U.S. superpower era is over

Ok, so why does this come from Germany vs the head of the European Treasury Department?

Oh, that's right. The euro is a currency of many separate governments without multi-state control.

There is no European Treasury Department, only a euro Fed in the form of the ECB.

This commentary is like the governor of New York commenting on China's role in the world economy.

Next.

[unlucky]

Re: German leader warns U.S. superpower era is over

Don't think that all Europeans are gloating here. The general feeling is gloom and dismay, especially among business people. Some leftist journalists are trumpeting the end of "US capitalism", but that's just par for the course.

Most Europeans alive today grew up during an era when the US was seen as the natural leader of the "free world". Recent problems are seen by many in that context, as a blow to shared beliefs.

I spoke recently with an elderly German friend of my wife, who remembers WWII and the aftermath, and who worked in the US for several years. He expressed feelings of shock, dismay, and pain at what is happening (he is a pensioner). He worries that this signals the demise of an order under which Germany has prospered. His wife is more pragmatic: "The Americans are resilient".

[FRED]

Re: German leader warns U.S. superpower era is over

"The Americans are resilient".

Brilliant!

[rabot10]

Re: German leader warns U.S. superpower era is over

Brilliant!

Hey I'm Swiss for now. looking at a few other places to call home

[Olduvai]

Re: German leader warns U.S. superpower era is over

Europeans know very well they're to a big degree dependent on the US.
Consequently they'll hate to see her go financially mainly because they are afraid she'll go also militarilly. Europeans don't like naked capitalism and hope the US will go back to her democratic values of old. A strong US in which the average American can determine his/her future backed by the industrial power of old will be good for Europe. This recent capitalistic grab for totalitarian power is bad for everybody and hell for the average American. It kills US morals and virtues of old. The Americans should stand up for the American way of life and should not accept to be slaughtered by a few monsters who have only their own pockets in mind and don't give a damn for their fellow countrymen.

[touchring]

Re: German leader warns U.S. superpower era is over

I agree it's over. It will take 10 years to repair the damage on the reputation aspect.

Just two weeks ago, when AIG was all over the news, Citibank Singapore office had to make to publicize on local papers that they are safe, so we may guess what have happened behind the scene over the last few weeks.

[Mega]

Re: German leader warns U.S. superpower era is over

I wonder what "Fidel & Hugo etc" are thinking right now?
Mike

[c1ue]

Re: German leader warns U.S. superpower era is over

I spoke recently with an elderly German friend of my wife, who remembers WWII and the aftermath, and who worked in the US for several years. He expressed feelings of shock, dismay, and pain at what is happening (he is a pensioner). He worries that this signals the demise of an order under which Germany has prospered. His wife is more pragmatic: "The Americans are resilient".

It is amazing that introducing 1 extra remove of deniability seems to completely conceal.

Why is it this German family doesn't link the rise of Hitler to the US forcing repayment of war debts in turn leading to the punitive Versailles treaty terms? Or the first 'economic miracle' being simple a way of ensuring repayment of said Versailles debts?

Or the subsequent 2nd miracle being a way of ensuring no 3rd world war in a generation?

Even as Germany was 'miraculously' rebuilding both the 1st and 2nd time, the US was lining its pockets selling the industrial machinery and exporting agricultural products.

Germany as it is today is a product of the hard work of the German people, a people who fought all the rest of Europe and most of the world to a standstill for several years even under the leadership of a madman.

[D-Mack]

Re: German leader warns U.S. superpower era is over

Ok, so why does this come from Germany vs the head of the European Treasury Department?

Oh, that's right. The euro is a currency of many separate governments without multi-state control.

There is no European Treasury Department, only a euro Fed in the form of the ECB.

This commentary is like the governor of New York commenting on China's role in the world economy.

Next.

I don't now, it seems he has some ideas others dislike

Germany plans draconian financial regulation

The German finance minister Peer Steinbruck yesterday outlined a series of Draconian financial regulation proposals which, if adopted, would throw Germany back into the financial dark ages. Frankfurter Allgemeine reports that he wants to make short selling illegal (we don’t get it: if you think short-selling is wrong during downturn, then surely you must ban “long” buying during upturns. So why is he not proposing that? If you only ban short-selling, you may even make asset bubbles worse!) Furthermore, he wants to impose

unilateral legislation force banks to take on 20% of the credit risk, when selling on a bundle of credits to third parties for the purpose of securisation. The European Commission is also drafting legislation to force banks to retain some 10% of the credit risk. The reaction was predictably devastating. Jan Pieter Krahan, professor of finance in Frankfurt, is quoted as saying that this was precisely the regulation we do not need, as the right level of risk sharing cannot be determined global, but depends on the type of securitisation. Depending on how the package is construed, 20% can be either too little or too much.



The FT reported that Steinbruck, speaking in the Bundestag, also put criticised the Americans for being arrogant, having continuously rejected Germany’s proposals for better financial regulation. He also predicted that the Americans will lose their superpower status, and the dollar’s strength as a global reserve currency will become relative. This is the ultimately “I told you so” story.

http://www.eurointelligence.com/arti...409c752.0.html