The weakness of the U.S. dollar is no accident,

The weakness of the U.S. dollar is no accident, billionaire George Soros says - it's the result of Russian and Middle East oil exporters switching some of their oil transactions from dollars to euros. 

Where's the tipping point on this?

-- in Newsmax, via John Robb

Back when I was at 2SER FM, I remember being involved in some discussions pre the Iraq occupation that perhaps part of the reason for the invasion was to stablise the American currency in face of the euro (and EU) threat. The treat was that Iraq amongst other oil exporters was going to switch to the euro for oil trading.

For most of the Bush presidency the US dollar has been sliding downward, while the Euro has only been gaining in strength. By anchoring the US dollar in a tangible commodity like oil, there is a limit on its downward slide... a real value attached to it. It literally becomes a black goal standard. Something which may help the US in the impeding economic collapse (okay, that's pushing it)... the irony is, of course, that it didn't work. In fact, there seems to be a 'conspiracy' to weaken the US dollar. Which, ironically, reduces America's foreign debt in real terms.

Another aspect to the situation is the battle of legitimacy between the EU and the US. Since the collapse of the USSR, Europe and the US have been needing each other less & less. In the Cold War, it was a relationship of co-dependency. Now its a competitive relationship to win the moral civil war in the West. The EU is emerging as a single supernational (or transnational) entity to challenge the US' hyperpower. The Old World vs. the New. Add the rising power of China, and we're going to see a tense geopolitical triangle between the EU vs the US vs the New Asian Trading Block (I've forgotten its name, but its effectively becoming an Asian Union, the AU) emerge over the next say, 20 years. How that geopolitical relationship interoperates with other emergent trends, like global guerillas, the greenhouse effect, over-population, remain to be seen. I can't say I think it'll be good either. Though, I must say I think the fundamental commodity of international trade will shift from fuel resources like oil to basic foodstuffs like grain. "No War for Food" doesn't quite have the same ring to it, does it? No wonder some large TNCs are trying to own the food chain via an unholy mix of law and genetic modification.

We live in interesting times indeed.