USA 2006-2010 - The Fall of the Dollar « Wall » or the end of the other Superpower born in 1945


Abstract GEAB N°1 – January 15, 2006 (published September 6, 2006)



At the end of 2005, LEAP/E2020 elaborated a medium-term anticipation scenario concerning the United-States. Using the same conceptual tools that gave birth to the now famous “Europe 2009” scenario – “When the grand-sons of Pétain, Hitler, Mussolini, Franco and Staline will take over the EU”. This new scenario is entitled : “USA 2010 – When the Washington Wall falls”.
This scenario was released on January 15 in the first issue of LEAP/E2020’s confidential letter, the GlobalEurope Anticipation Bulletin, at a time when nearly all experts firmly believed in the sustainability of the Dollar’s strength, in the structural superiority of the US economy, in the harmlessness of US deficits, in the solidity of NATO and the transatlantic axis, and in the US military and diplomatic capacity in handling properly the occupation of Iraq, the nuclear crisis with Iran and the North-Corean case.

A synthesis of this scenario goes as follows :

Assumption 1: The current period reflects in particular the end of the world order founded after World War II.
Assumption 2: The End of the Cold war triggered an increasing objective disconnection between most of planet and the evolution of the two major players of this Cold war: the USSR and the United States.
Assumption 3: Globalisation has considerably weakened the capacity of each State to influence in a decisive way its own evolution, and collectively it has strongly reduced the possibility of preventing / managing major crises.
Assumption 4: A "super power" cannot durably see its external credibility (cultural, moral and intellectual attractiveness, and military power) and its internal credibility (institutional legitimacy, capacity to embody its own speech) being strongly reduced without soon seeing the basis of its power and influence called into question.
Assumption 5: The Fall of the Iron Curtain in 1989 which led to the disappearance of the USSR three years later, is the result of a historical evolution which affects the United States also.
/…
First series: USSR
1. 1979 - The USSR invades Afghanistan, and loses all its remaining prestige as "protector" of the Third World as opposed to the First world (Western); the world witnesses the Red Army’s incapacity to control and solve the conflict triggered by this invasion.
2. 1986 – The Chernobyl catastrophy shows to the world Soviet society’ and infrastructures’ decay; the Russians themselves and a large majority of the “satellite” countries become aware of the obsolescence of the Soviet power and of its disinterest for its own people.
3. 1989 - Fall of the Berlin Wall soon followed by the general fall of the Iron Curtain.
4. 1992 - End of the USSR.

Second series: USA
1. 2001-2003 – The terrorist attacks on New-York and Washington put an end to the myth of invulnerability of the US territory and trigger the invasion of Iraq, leading to a loss of the moral leadership acquired along the last decades and highlighting the US army’s incapacity to control and solve the conflict triggered by this invasion.
2. 2005 – The Katrina catastrophy destroys one of the very large cities of the US, highlighting a complete lack of prevision, a disinterest for unprivileged classes, the scope of hidden « poverty » and the disorganisation of relief systems.

The two questions raised by comparing these two series of events are the following:
3. What is the Berlin Wall for the US ? Or in other words: What is the “Washington Wall” enabling the country to keep its grasp on what is at the centre of its power?
4. When will it fall?

Europe 2020 suggests the following answers:
. The “Washington Wall” is the Dollar, and the fall of the “Washington Wall” will consist of a serious loss of confidence in the Dollar.
. Considering the USSR series of events, a probable date ranges between 4 and 7 years from now. Europe 2020 thus symbolically chose the date of 2010.

Precision: The current evolutions in the financial, monetary and economic fields, in particular the increasing American deficits, the emergence of the Euro as a partial alternative, the immense commercial and monetary dependence of the United States with respect to some of its most ferocious competitors like China,… do not make it possible to invalidate such a scenario. Quite the contrary.

Lundi 2 Octobre 2006

GEAB N°61 - Contents

- Published on January 16, 2012 -

Global systemic crisis - 2012: The year of the world’s great geopolitical swing
This GEAB issue makes it six years that the LEAP/ E2020 team have shared their anticipations with their subscribers and readers of their public briefing on the development of the global systemic crisis each month. And, for the first time, in the January issue which presents a summary of our anticipations for the year to come, our team anticipates a year which will not result solely in a worsening of the world crisis but which will also be characterized by the emergence of the first constructive elements of the “world after the crisis”… (page 2)
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USA 2012: on the way towards the tragedy of QE3
Today, US financial policy is confronted by the sovereign debt crisis of which it will be the ultimate victim in 2012. As LEAP/E2020 anticipated, the 2011 European debt detonator has truly ignited the 2012 American sovereign debt bomb, even if the media coverage desperately tries to make us believe the opposite. The massive sale of US Treasury Bills by the planet’s major central banks in the second half-year 2011 perfectly illustrates this situation incidentally… (page 7)
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ANTICIPATIONS 2012 - ‘20-UP AND 15-DOWN’, THIRTY FIVE KEY TRENDS FOR 2012
Up or Down? The United States' political paralysis; The City and Wall Street ; The rise in interest rates; The forfeiting of value to Wall Street and the City; The value of Chinese reserves; The Pound Sterling (and Gilts); Euroland as new European sovereign; The USA-China “little cold war”; Italy; The importance of the US Dollar in world trade transactions; Rating agencies; The “great European public borrowing” (GEPB); MerkHollMont; Ron Paul; The number, size and influence of Western banks; The continuation of gold’s return in the international monetary system; Recessflation; Sarkozy, Cameron, Netanyahu and Medvedev; The BRICS maturing as a pro-active world player; Turkey’s exit from the Western camp; The Tobin Eurotax; Secular and pro-Western forces in the Muslim world; Growth; The usefulness of the G20; Lawsuits against those managing banks and hedge funds; The splitting of the world monetary system into three zones: Dollar, Euro, Yuan; The widespread downgrade of Western public debt; Peoples' anger; The Euro crisis; The EU as the principal incarnation of Europe; QE3 as the ultimate weapon for saving the US economy; The US’ capacity for military intervention; The West as a community of relevance and values; Scottish independence; Le détroit d'Ormuz et un nouveau contexte de crise au Moyen-Orient ; L'indépendance de l'Ecosse; The Straits of Hormuz and a new context of the Middle East crisis (page 19) (page 19)
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The GlobalEurometre - Results & Analyses
We are seeing a strengthening in the majority considering that common European solutions to the crisis are more effective than national ones (80% in January versus 77% in December)… (page 33)
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