"There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved."
- Ludwig von Mises

Sunday, October 3, 2010

Follow Up to Pre-G20 Meeting Between France, Germany and Russia

In a prior post Pre - G20 Meeting between France, Germany, and Russia - What's Cooking? , I referenced an article from China's Xinhua describing an upcoming meeting between these three countries, the US, was noticeably absent.  Well, here are more details from The Australian:

NICOLAS Sarkozy will use his G20 leadership role to push forward a new diplomatic and monetary world order that embraces Russia...

He proposes a powerful European alliance which could threaten to destabilise US dominance.
At the same time, the ambitious French President wants to craft a new global economic framework that would give China greater influence. He plans to use the French presidency of the G20 group of world nations, which starts on November 14, to promote his redrawing of the world diplomatic and monetary stage.

From the French point of view, the time is ripe to forge new global architecture because the end of the postwar monetary system has left a void and the world needs shock absorbers on the financial and commodities markets. China and Russia are critical to his new post-Cold War vision...

He will put forward his radical new proposals for Moscow when he chairs a summit with Russian President Dmitry Medvedev and German Chancellor Angela Merkel in Deauville, France, on October 18. His plans will raise concerns in Washington, which has long resisted French attempts to counter US power and impose global regulations.

But Paris insists its ideas are complementary to a strong Atlantic partnership and the NATO alliance, which France has rejoined fully under Mr Sarkozy. He wants Russia and the 27 nations of the European Union to form close bonds on issues as diverse as national security, diplomatic relations, economic policy, human rights and immigration. A senior French source said: "We must do everything for Russian rapprochement with Europe."

The Australian article HERE.

The article also discusses Sarkozy's eroding domestic support, but in my view, that's irrelevant.  What is going on here is not merely between statesmen, but between age old European nations trying to evolve beyond the current US centric world.  A new monetary system can not be ignored.

And from the New York Times, which includes US (unofficial) response:
President Nicolas Sarkozy of France plans to propose a new security and economic relationship between Europe and Russia when he meets with President Dmitri A. Medvedev of Russia and Chancellor Angela Merkel of Germany this month in Deauville, senior French officials said Friday.

The idea is to have a single zone of security and economic cooperation, the officials said, that will pull Russia closer to Europe but apart from the North Atlantic Treaty Organization. The alliance itself is holding a key meeting in November intended to approve a new strategic doctrine, and American officials are unhappy with the idea of France and Germany talking to Russia — without the United States present — about security in advance of the talks.

“Since when, I wonder, is European security no longer an issue of American concern, but something for Europe and Russia to resolve?” asked a senior American official, who spoke on condition of anonymity. “After being at the center of European security for 70 years, it’s strange to hear that it is no longer a matter of U.S. concern.”
NY Times Article HERE.

So what is really going on?  Is it about security?  Against what threats?  Is it only about economic cooperation, and not a new monetary order?  Who wins, who loses?  And can such a meeting really effectively take place without the US, or is it a challenge to the US?

Does anyone remember this from last year:

Medvedev Shows Off Sample Coin Of  New 'World Currency' at G-8 

No comments: