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"With the euro now trading around 1.56 against the dollar, the size of its annual output (at market value) has exceeded that of the United States," US investment bank Goldman Sachs estimated last week.
The single European currency has skipped from record to record amid fears the US economy is heading into recession at a time of national housing and financial crises.
Now that the dollar isn't backed by the largest economy in the world anymore, should we adapt the euro as the new on-line trading currency? I am currently selling adspace on my sites in euro's, even to customers from the US and I haven't heard any protests yet. It seems that many people already have accepted the idea that the euro is becomming the new international trade currency.
The problem with the US economical zone is that it is based on one country. The eurozone started with twelve countries and all new members of the community have to use the euro too. And most new members are developing countries with an economical grow rate higher than the average developed country. In my view--even if the dollar comes closer to the euro again--it will be difficult for the US to stay the largest economy in the world.
Phranque has a valid point that as long as the dollar used for oil trade it will keep a base value, but OPEC countries are already talking about diversifying their currency policy. Starting with US "friends" Venezuela and Iran of course :) Only one OPEC member had the balls to switch to the Euro in November 2002 for all oil trade, and we all know what happend with them a few months later (FYI, that was Iraq).
>>Only one OPEC member had the balls to switch to the Euro in November 2002 for all oil trade, and we all know what happend with them a few months later (FYI, that was Iraq).
Didn't Iran's internet cables get cut all of the sudden a few days before their Oil Bourse debut ;) [en.wikipedia.org...]