The embattled Euro has gotten a surprise boost from an unexpected quarter―China. The country with the world’s largest foreign exchange currency reserves, China, has pledged to support Greek debt as well as the Euro in what is clearly a geopolitical decision. In doing so, China has signaled it seeks to prevent the US financial warfare attack on Europe and to play the EU off against the USA in a geopolitical chess game of a fascinating dimension … //
… Asia Crisis and British Pound EMU crisis:
The pattern of the hedge fund attacks on the Euro follows the financial warfare strategy carried out by select US hedge funds previously. In 1992, on what many market professionals believe must have been insider information, Soros claimed to have made $1 billion speculating against the British Pound Sterling and forcing the British government to abandon plans to bring Britain into the emerging Eurozone. Had Britain and the powerful financial resources of the City of London come into the new Eurozone, many in Wall Street and Washington privately feared that could spell the death knell for the dollar as world reserve currency. The fact that the dollar is world reserve currency has been one of two strategic props for American power in the world, the other being the Pentagon. Were the dollar to lose that, the future of the American Century, the sole superpower would be mortally in doubt.
Similarly, in May 1997, it was a concerted hedge fund attack again led by George Soros’s Quantum Fund, joined by Moore Capital Management and Julian Robertson’s Tiger Management Group and his Jaguar and Tiger funds, against the currencies of the Asian “Tiger” economies that turned Korea, Indonesia, Philippines, Malaysia. The wrecking of the Tiger economies in 1997-1998 turned those economies from self-sustaining dynamic economic growth, largely financially independent of US or IMF control, into de facto buyers of US Government debt as Asia tried to defend against future attacks. Like the Sterling crisis of 1992 the 1997-1998 Asia Crisis also served to give a few more years of life support to the fragile dollar.
Now, as the US depression deepens and the dimension of the banking problems worsens by the Day; the dollar’s future is threatened as never before. To counter this, clearly the most powerful circles of Wall Street and the Treasury and Federal Reserve are magnifying the small Greek crisis into an exaggerated picture of “collapse of the EU” in hopes of ruining the Euro as a potential alternative to the dollar for foreign central banks. This is not to say that the Euro and the Maastricht Treaty are a model for a healthy alternative to the problems of the dollar region. Far from it. It is merely to identify the geopolitical power battle going on behind the scenes to keep the dollar Titanic from sinking. China has evidently decided to weigh in on that battle on the side of the euro. (full text).
Link: China, Turkey upgrade ties to strategic cooperative relationship during Wen’s visit, on Xinhuanet.con/EN, Oct. 9, 2010.