When analyzing such matters as the vulnerability of the US economy and the chances of its collapse, it is vital to avoid the two extremes of "calamity howling" on one hand and investing blind faith in the status quo on the other. Unforeseen and unexpected attack-induced collapses of grand proportions can and do occur. The sudden collapse of both towers of New York's World Trade Center, for example, took everyone by surprise - who could have foreseen that the two towers, which survived the massive lateral impact of two huge planes, would, only minutes later, collapse vertically upon themselves, their own massive weight ensuring their demise?
Fundamental vulnerabilities exist in the US economy too. But there also exists a widespread consensus that there is little real chance of a collapse, no matter what the attack might be. Even most contrarian experts dismiss the possibility of an actual collapse. They generally speak only of a prolonged "bear" period for the economy, not a collapse. The towers also enjoyed such widespread confidence before September 11. The previous targeting of the towers in 1993 and their survival only reinforced this misplaced confidence.
President Vladimir Putin has stated both publicly and privately that invoicing Russia's crude-oil and gas exports to the European Union in euros instead of in dollars makes very good sense for both Russia and the EU. Putin is known to have very close relations with "old Europe", primarily Germany and France. His statements and those of German and French leaders have even on occasion drawn attention to the fact that US global dominance fundamentally rests on the fact that the dollar is the international currency, and that if an exit from the dollar were to occur in the sphere of global petro-transactions, the effect would be seriously to undermine that global dominance. Furthermore, a number of oil-exporting countries have already gone on public record as to their preference to make an exit from petro-dollars in favor of petro-euros. They have indicated that if Russia begins such a move to petro-euros, they will rapidly follow Russia's lead. The net effect would be a rapid international abandonment of the dollar as the international currency, which would in turn "bring down the towers" of the heavily debt-ridden US economy.
If Russia is perhaps positioning itself to make even a partial exit from the dollar in the pricing of its petro-transactions, then the Asian and other economies don't want to risk being left out in the cold, unprepared, seeing the value of their own huge dollar reserves undermined by a steep or chaotic decline in the value of the dollar. They cannot afford to ignore Russia's moves. Hence as Russia moves to decrease the percentage of its own holdings of dollars, so are the big Asian economies, as well as many other economies around the globe. No one wants to get burned in the event Russia moves to the euro. Additionally, as the dollar continues to weaken and crude oil continues to rise in price, having the dollar as the preferred international currency for petro-transactions will become more of a liability, especially for the big Asian economies, which are heavy importers of crude oil. This fact will tend to further undermine Asian, as well as the rest of international support for the dollar.
http://www.atimes.com/atimes/Global_Economy/FK25Dj03.html
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