"Fascinating explanation of some major economic mechanisms involving dollars and euros and oil. A very big reason that the United States is such an economically and militarily dominating country is apparently that U.S. dollar is the de facto world reserve currency."

"LONDON: The problem with American power is not that it's American. Most states with the resources and opportunities the US possesses would have done far worse.

The problem is that one nation, effectively unchecked by any other, can, if it chooses, now determine how the rest of the world will live. Eventually, unless we stop it, it will use this power. So far, it has merely tested its new muscles.

...
Were it not for a monumental economic distortion, the US economy would, by now, have all but collapsed. ... It survives only because conventional measures do not apply: the rest of the world has granted it an unnatural lease of life.

Almost 70 per cent of the world's currency reserves - the money that nations use to finance international trade and protect themselves against financial speculators - takes the form of US dollars. The dollar is used for this purpose because it is relatively stable, it is produced by a nation with a major share of world trade, and certain commodities, in particular oil, are denominated in it, which means that dollars are required to buy them.

The US does very well from this arrangement. In order to earn dollars, other nations must provide goods and services to the US. When commodities are valued in dollars, the US needs do no more than print pieces of green paper to obtain them: it acquires them, in effect, for free. Once earned, other nations' dollar reserves must be invested back into the American economy. This inflow of money helps the US to finance its massive deficit. The only serious threat to the dollar's international dominance at the moment is the euro.

Next year, when the European Union acquires 10 new members, its gross domestic product will be roughly the same as that of the US, and its population 60 per cent bigger. If the euro is adopted by all the members of the union, which suffers from none of the major underlying crises afflicting the US economy, it will begin to look like a more stable and more attractive investment than the dollar. Only one further development would then be required to unseat the dollar as the pre-eminent global currency: nations would need to start trading oil in euros. Until last week, this was already beginning to happen.

...Last year, Javad Yarjani, a senior official at Opec, the oil producers' cartel, put forward several compelling reasons why his members might one day start selling their produce in euros. Europe is the Middle East's biggest trading partner it imports more oil and petrol products than the US, it has a bigger share of global trade and its external accounts are better balanced. One key tipping point, he suggested, could be the adoption of the euro by Europe's two principal oil producers: Norway and the United Kingdom, whose Brent crude is one of the "markers" for international oil prices.

"This might," Yarjani said, "create a momentum to shift the oil pricing system to euros." If this happens, oil importing nations will no longer need dollar reserves to buy oil. The demand for the dollar will fall, and its value is likely to decline. As the dollar slips, central banks will start to move their reserves into safer currencies such as the euro and possibly the yen and the yuan, precipitating further slippage. The US economy, followed rapidly by US power, could then be expected to falter or collapse.
..."

"To defend UK sovereignty - and that of the rest of the world - from the US, the British must yield some of their sovereignty to Europe. That they have a moral duty to contest the developing power of the US is surely evident. That they can contest it by no other means is equally obvious. Those British who are concerned about American power must abandon their opposition to the euro."

The FCC is about to put vital control of media in this country in a very few hands - and quickly needs to be stopped.

Under "deregulation" rules proposed by the Federal Communications Commission, the already dangerous monopoly of TV and radio (and therefore of news, public thought and action) would dramatically worsen.The five corporations that own TV networks would be green-lighted to buy up each other. Local TV and radio stations would be swallowed by larger companies. Local newspapers and broadcast outlets would be allowed to purchase each other.

In a few years, Fox, General Electric and the radio giant Clear Channel - the most ambitious players - would potentially have an iron grip on the way the majority of the public gets its information. These companies have shown no interest in the public good, only in protecting their bottom lines while putting out news that is more deceiving than informing, when not actually right-wing propaganda - witness the leadup to and coverage of the Iraq war.

The U.S. Senate Commerce Committee is preparing to hold crucial hearings on the proposed FCC deregulation. FCC chair Michael Powell is promising a vote on the new FCC regulations by June 2.

The media giants have spent huge amounts to buy support in Congress and have cleansed their news of any critical reporting on the Bush administration. Breaking with the industry line, mogul Barry Diller recently told Bill Moyers deregulation would greatly increase oligarchic control of media.

Join the new Media Challenge! actions. Contact Congress and the FCC to stop this anti-democratic takeover. Here's how to do it: