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Editorial
   Professor Arindam Chaudhuri
Professor Arindam Chaudhuri
[Chief Editor - 'The Sunday Indian']
[Nov 2005]

Iran is the excuse. The new war is between the Dollar and the Euro

For years Americans have had it very easy. As a result of the Dollar being the universally accepted form of international currency, the US made merry at the cost of the rest of the world. While countries like India craved for Dollars and had to give products against the Dollar, America could simply print paper and buy products. Since countries with Dollar reserves have typically no option but to finally put it back in the American treasury itself - at an abysmally low 1.5% rate of interest - for the Americans, the cost of supplying Dollars to the world in effect has been as low as 1.5% interest per annum on the money being supplied! In fact with all the Dollars they print eventually coming back to their treasury itself, US has been so flushed with Dollars that American citizens over the years have got the cheapest of housing and car loans possible - thus keeping their economy up and running too, in more ways than one.

With the advent of the Euro that seems to be changing. In spite of all the apparent friendlyIran Excuse joint front that the Americans put up with the Europeans there is now an under current of tension because of the advent of the Euro as a strong currency and a possible alternative to the Dollar. As more and more people and more and more countries start finding the Euro as a stable mode of foreign exchange and start opting for the same, the demand for the American Dollar has started falling fast. To Americans this is scary given the good times they had got used to. Past history is testimony to the fact that Americans have stopped at nothing when it has come to their economy. Even if one word to overlook their inhuman use of the nuclear bomb in an era bygone, be it the relentless bombing of Afghanistan or be it misleading the world about Iraq's possession of WMDs and the eventual war on Iraq (both for oil), Americans have stopped at nothing. It is a myth that they discriminate only against the Black (Katrina being just a small case in point) or the Muslims. When it comes to their economy (read profits) they spare none.

The latest of course is their political onslaught on Iran. The apparent reasons they give could be anything. But the real reason is Iran's decision to accept the Euro against sale of oil in place of the Dollar from 2007. It has peeved the Americans no end and they are preparing to take Iran head on despite their huge flop show in Iraq. This time though, they may not have the European support in the same way as they had last time. After all the problem is not with Iran, the problem is with the Euro's growing acceptance. It is now to be seen if the controversy will remain centered around Iran or will it boil down to a larger debate and war (of words - at the least) with the west itself getting divided into east (Europe) and west (America)?

Back home, India as of now looks more inclined to back the US vis-a-vis Iran. The big question for us though is, IS INDIA PREPARED to partner the US in the long run given that US has historically been an unreliable partner to third world countries?


  
 
 
       
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