Leading article: The end of the dollar spells the rise of a new order
This radical proposal is a reflection of a changing economic world
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Independent Minds
Last autumn's global financial crisis set off an economic earthquake. And we are still feeling the tremors. The latest sign of the ground shifting beneath our feet is our report today of plans by Gulf states, China, Russia, France and Japan to end their practice of conducting oil deals in US dollars, switching instead to a diverse basket of currencies.
It is not hard to see the motivation for oil exporters to move away from the dollar. The value of the US currency has fallen sharply since last year's meltdown. And fears are growing, in the light of a spiralling US government deficit, that a further depreciation is likely. They do not want to sell their wares in return for a currency with an uncertain future.
It is also easy to see why China would like a world trading system that is underpinned by other currencies as well as the dollar. For the past decade Beijing has been recycling the proceeds of its giant national trade surplus into purchases of US government bonds and other dollar-denominated assets. China too stands to make a significant loss if the value of the dollar falls. For China, however, the timing is much more sensitive. Beijing needs to reduce its dollar holdings, but if it does so too quickly it will bring about the very devaluation it fears. This explains why Chinese officials appear to want this transition to take place gradually over the next decade.
But the significance of this development goes much further. Since the end of the Second World War the dollar has been the bedrock of world trade. The pre-eminence of the American currency flowed naturally from the economic dominance of the US. Virtually everyone traded with America so it made sense to use their currency.
But the US is not the dominant power that it once was. The financial crisis has left it hobbled with significant government and household debts and sharply reduced prospects for growth. Developing nations such as China, Brazil and India, on the other hand, have weathered the economic storm significantly better. So while this latest proposal is born of financial calculation, it is also a reflection of a new economic world order.
We should not be sentimental for the dollar. It makes economic sense for world trade to be conducted in a variety of currencies. Relying on one only has the advantage of clarity, but it also creates instability if the economy that underpins it faces uncertain prospects.
Yet we need to understand that exchange rate volatility is a symptom, rather than a cause, of what truly ails the world economy. The biggest driver of global economic instability in recent years has been the determination of China to boost its export sector at all costs. Beijing's persistently large trade surpluses and manipulation to prevent its own currency from appreciating have effectively forced Western nations into running persistently large trade deficits. It was this pressure that blew up various asset bubbles that burst with such disastrous effect last year.
A gradual move away from the dollar makes sense. But without a commitment from world governments – both in the rich and developing world – to reduce these destabilising global trade imbalances we will enter an uncertain new era; and one that could yet make us pine for the days of the dominant greenback.
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Comments
The U.S. still trades with everyone. The U.S. consumes roughly 25% of global exports. The U.S. economy is over $14 trillion USD in size. No one else comes anywhere near it. Japan and China are next in line, with GDPs measured in the $4 trillion range. The U.S. is not as dominant as in the decades immediately following WW2, and its influence will be ameliorated somewhat further as other nations become wealthy simply as a result of it owning less of the growing pie, but even the implication that it will not remain the single largest and most influential actor is a pipe dream of anti-Americans, Europhiles and Sinophiles.
"The financial crisis has left it hobbled with significant government and household debts"
The government debt to this point is hardly unmanageable. If it continues at this pace it will become a problem.
This piece is - unfortunately typical for the Independent - completely wrong on household debt. The crisis has not left the U.S. hobbled with household debt. The reality is that savings rates have risen and household debt has decline since the crisis began. Net worth ratios for American households are actually now healthier than they have been at any time in the post-war period.
The outcome of the financial crisis will be a much healthier United States in aggregate. The dollar returning to its days of comprising "only" 40+ percent of global currency reserves would also be a healthy advent which will free America from having to shield economies like China from market forces, and from having to bear the brunt of exchange rebalancing - something that goes well beyond the dollar, though from the journalistic focus on the dollar you'd never know it.
Indeed, the nation that will benefit the most not in the short but the medium and long term from all of this will be the United States.
- This is true, just do the math. In less than 15 years China will have an economy greater than that of the US, and is about 20 years from now, more than twice the size. Its just a matter of math..and time.
(The U.S. economy is over $14 trillion USD in size with a growth rate of about 2% per annum...China... next in line, with GDPs measured in the $4 trillion range, and a growth rate of 10%)
"The government debt to this point is hardly unmanageable. If it continues at this pace it will become a problem." - is also a true statement. Sure the recent additions to the debt and deficits are currently manageable, but, when adds in the massive overhang of aging US residents and this effect on Medicare and Medicade, and, add to it the pension and social security shortfall, and, add in low employment growth expectations for years ahead...the debt looms in to the unmanageable multi-trillion dollar range. Good luck to America in digging out of this cratering hole.
-Saverio Manzo
per capita is also fairly important
ALL of the countries mentioned by Fisk have completely denied the Indy's story, which probably made some forex speculators very rich - the same ones who planted the story through the now senile and increasingly conspiracy-minded Fisk.
I wonder if Sen O'Grady or anyone else at the Indy made a killing as well? Somehow I doubt that they should be so shrewd. My bet is that all they got from their bogus story was their dick in their hand.
A couple of months ago we hit a global corporate milestone, a Chinese company became the largest company in the world, clocking in at a recession-era value of $350 billion. Just cant imagine what its out-of-recession market value will be?
Time for Americans to go into ostrich mode. But dont worry, we'll wake you up when the transition is over. It will take time thats for sure...
==
The biggest driver of global economic instability in recent years has been the determination of China to boost its export sector at all costs.
==
The biggest cause of economic instability has been the madness of allowing the US to print so much money over the last 25 years. Everyone has known for ages that the US debt position is unsustainable, but no one has wanted to be the first to take the hit of getting out of the dollar. It's a train wreck itching to happen. Perhaps those with most to lose (China and Japan) are starting to realize how exposed they are.
As for the Britain and the Pound, Fisk is right - we'll be in the euro within ten years.
"Everyone has known for ages that the US debt position is unsustainable, but no one has wanted to be the first to take the hit of getting out of the dollar"
The U.S. debt position has as good or better than that of most of its peers. I don't understand why people don't understand this. All I can assume is that people see the absolute dollar amounts and don't understand just how massive the U.S. GDP is, both in absolute numbers itself, and relative to all other economies (including the Japanese and Chinese economies).
"All I can assume is that people see the absolute dollar amounts and don't understand just how massive the U.S. GDP is, both in absolute numbers itself, and relative to all other economies (including the Japanese and Chinese economies)."
I dont think you realize that the US government will continue its spending on the same course it has been and will most likely accelerate it. There is no signs it will change with the new administration. The American GDP will steadily fall as the years continue on, most likely as our middle class continues to dwindle. All great nations fall, nothing last forever. Your refusal to acknowledge this is naive at best. All the classic signs are in the air on multiple fronts. The fact is, as our middle class continued to fall, we needed a new way to keep that GDP you love to site going, yeah it was called debt (I.E. reckless lending). We got ourselves locked into this global economy, where the products we used to produce went over sea's along with so many of those jobs. We can expect to see his trend to continue. However, we all still wanted to live like kings, so we replaced it with massive household debt. I do agree with you in regards to the household debt falling since this mess started. However, when things start to show consistent signs of recovery, the flood gates will open with spending and investment, which inturn will release all that added money printed up over the last couple years info the economy, and give us a period of hyper inflation. This itself is going to cause many many problems. No I do not see a good future for this county in the next 5 to 10 years, unlike the "sunny day" economists we always hear from.
This economic crisis can best be described as a correction and the US, along with other nations refused to allow it to happen, thus prolonging the agony. We will not be able to spend/tax our way to prosperity. The changing of the dollar as the primary currency it just another sign.
A currency by any other name is just a worthless piece of promise.
What makes it valuable is that how sound its economical and industrial foundation is based on.
For example, I just learnt that if I receive a free gift, by mail not ordered by myself from any one, I can keep this and there is no need to send this back.
I can bury this feed this to the dogs, burn this as Hindus do, bury Muslims and others do, anything. Do you want to help me?
I am bad
I thank you
Firozali A. Mulla
Th UK has many of the same problems that the USA has since we both went down the wrong road years ago. Germany and Japan are Huge Creditor Nations along with Switzerland, Norway, Netherlands, Belgium, Finland, Sweden, Austria, Canada, China, UAE, Saudi Arabia, Russia, South Korea,etc. These are the leading economic powers in the world now.
Europe also has a very strong Social Safety Net or Social Democracy which adds to the strength of the people and their quality of life whether it be Education, Healthcare or other social nets. This is what makes Europe seperate from much of the rest of the world and why the Quality of life is so high.
Americans are having a very severe drop in their standard of living/quality of life, it has been on going for many years but over the past 8 it really picked up steam.
Even our Average life expectency is only ranked 50th in the world.
The USA is on deep trouble and it will take a huge effort with help also from the Creditor Nations to dig America out of it's deep pit.
ANd the USA does not import 25% of the world's exports it closer to 15 % and this is sure to shrink further as China, India and Eastern Europe Import more over the coming years.
The Chinese and Arabs know what they are doing. If the U.S. goes under it’s the end of the Zionist entity. Brilliant!
Much of Western Industry has been moved to China and all of this is financed by the big banks at the end of the day. Western Central Banks have been selling gold to stop the price going up too quickly whilst Asian central Banks have been buying. So the gold is going where the jobs are going. I currently see no reason to think that the Big International Banking families extensive network is still not working fully.
The much-vaunted "New American Century" forecast by the NeoNazis - Rumsfeld, Wolfowitz, Bush, Cheney, Bliar, Brown and their goosestepping pals - has fallen into ruins.
The "Rumsfeld Doctrine" of bombing, torturing, and blitzkrieging your own way to oil ownership has collapsed. Its author remains a washed-up Nazi awaiting his War Crimes trial, a sad study for a James-Bond-film evil villain.
Britain and Israel have thrown in their lot with the New World Orderers and will now pay the price all Doctor-No's pay at the end of the movie.
America is sinking beneath the ocean of debt it built up. Printing more oil-based paper-money isn't an option any more.
They'll be wrapping fish in dollars pretty soon - it'll be cheaper than old newspaper.
It's the US Navy.
The US Navy, Army, Marines, AF, etc ... all run on BORROWED and PRINTED DOLLARS, my friend. They can't steam those ships into harms way running them on vegetable oil. It takes a tremendous amount of money to project force, money we are quickly running out of. They can't print it fast enough to keep up with our spending.
Ask yourself this ... what IF a nuke goes off in NYC? What if a terrorist group then announces "we have five more in other US cities ...." and they begin making demands. What will we do then? What will you do? How will these carrier task forces help us? My guess is that most of them will begin steaming home so soon it will make your head spin. They'll be needed here to quell the riots.
I WISH we were the country we were 20 years ago. We just aren't. Burying your head in the sand and pretending to be the reincarnation of John Wayne and Ronald Reagan (both of whom I love and miss) isn't going to help you. Start preparing your family for the eventual end of America as we know it because neither our politicians or a majority of our people are willing to make the hard, nasty decisions that must be made to save us.
One of two things is going to happen .... we either wake up one morning to find our dollar extremely devalued (as FDR did) or we wake up to find out the dollar is as worthless as toilet paper and we must abandon it in favor of a new world currency. I believe the latter will happen. Seems to me I've read about it happening in a few books inside one Very Great Book.
For those who are not aware, the story on which all of these pieces are predicated has been thoroughly debunked, and was done so immediately by ALL of the alleged acting states involved.
Like pointing out to the cretinous fearful villager's that the old lady who lives up the road has a pointy nose.
Good enough for some burning entertainment! Such is the pitiful state of the UK media.
Most people here can use their common sense. If Canada is selling oil to China, why should we be forced to use the us dollar? Why should overextended US debt be used as a yardstick for valuing commodities.
You pointed out earlier the size of the US GDP is 14 trillion. But that is denominated in overvalued dollars! So what?
I doubt it also occured to you that US GDP is 80% composed of services, and not hard goods and is not exportable. What use is a haircut, a big mac meal or a financial services fee to a person in China? Can he consume them?
Also take note that the thunder of official denials the author predicted would happen did indeed occur. But really did you expect all these governments to confirm these meetings? If so then what planet did you just arrive from? Poor Rathsham, you obviously can't read between the lines and you believe everything your government tells you.
What intrigues me though, is why do you keep coming back here to post this nonsense, don't you have anything better to do?
Perhaps Microsoft Windows might save the US dollar, but even that is probably offshored if you looked under the bonnet ;o)
Any uncertainty arises from HOLDING a currency, no uncertainty can arise from TRANSACTING in a currency unless you then decide to HOLD it for time after the transaction occurs.
The reason that the commodity markets are transacted in dollars is that this currency, above all others, is the easiest to avoid being FORCED to HOLD. This is another way of saying it. The US dollar FX markets are the deepest most liquid of any currency. Anyone selling oil can swap their dollars from the trade instantaneously for Euro's, Yen or whatever and the cost of doing so is less than any other i.e. the Yen - Euro FX market.
Oddly the world is doing the rational thing.
Should the oil producers decide to transact in their new basket it will decrease the liquidity of US dollar markets and increase that of... ?
How will they convert their basket into whatever currency's they need? They will perhaps be forced to HOLD the basket.
If the basket is set globally, whose FX requirements will it be set to match?
Anyone else wonder why the French are in on this?
His goals and intentions are to crash the US economy into the loving arms of Socialism/Communism, his actions back that premise up.
What ever B.S. he spouts to the contrary, his actions have proven disastrous to the Republic.
We patriots are at the limits of our patience. He has usurped the Constitution and there is growing calls to bring these facts to the front burner before it is too late. Unfortunately our lapdog press is malfeasant in their duties, we are forced to get our news from great publications like the Independent and other non-US sources.
The Tea Parties and Town Hall meetings are but the tip of the iceberg, revolution is at hand.
For the good of the Nation, Barry Hussein 0bama has got to go.
When I read your tirade all I saw was deep seated racism disguised as patriotism. We should be proud of a President who is both articulate and wise. Yes, I said wise. He is a new generation of politician in Washington: one who stands up to adversity, and is not swayed by the elders who seek to maintain the status quo. He is striving to create a new America that is able to hold it's head high on the world's stage, and not the butt of endless jokes. My children, I hope will reap the rewards of a modern America, where people, such as yourself will find themselves in the minority. God bless America !!!
Never having run a business, or had any qualifying experience, he would fix our economy. Never having any administrative background in medicine or health care, or in running anything other than some "community organizing" in local Chicago politics, he would overhaul our whole health-care system and make affordable health care available to every citizen – and without raising any taxes on anybody earning less than $200,000 a year. Miraculous! Though most Americans had learned from bitter experience "if it sounds too good to be true, it probably is," a slim majority bought the whole spiel and elected the charmer president of the United States.
And what has happened in the first six months of his administration?
Largely wrought by his team, though they did take over in a very dangerous economic environment, the Obama decisions have quadrupled the federal budget deficit and are hinting at the necessity of gigantic, unprecedented new obligations that the non-partisan Congressional Budget Office estimates will cost at least $1.1 trillion more in years immediately ahead.
The president himself is using every last drop of charismatic persuasion to force a universal health-care program on a public that doesn't want it. (Polls show 85 percent of us happy with what we have already.) And his White House team is warning Congress and the public that if they don't enact the 1,017-page House bill or something almost like it, they will throttle the Republicans and "blue dog" Democrats – who are actually listening to their constituents – and railroad the thing through, using just their slim Democrat majority in both houses of Congress.
Excerpts from article by a famous actor
(read more at http://www.wnd.com/index.php/index.p
Power corrupts. Absolute power corrupts absolutely.
That is what scares me about the continual and aggressive growth of governmental power. Whether it be banks, car companies, or anything else. It is the government that is playing God! Power needs to be decentralized, and that is the design of the states' rights.
Cloward-Piven is definitely Obama's strategy. The problem is that the economy will be destroyed before his precious Socialism can be fulfilled, and then all the dollars of the rich will be so worthless they will not succeed at funding Socialism! We will certainly be a third-world country, and it is NOT if, but WHEN!
This inevitable collapse of American economy will surely culminate in a North American Union which will later be merged into the EU, and yes, I believe that the Lord Jesus Christ will return in the clouds and Rapture His children before a seven year world wide peace treaty will be signed, which will be broken halfway through.
Today, you can call me a crackpot, but when you hear that thousands of people worldwide are mysteriously missing, then you might think twice... Please consider seeking God today...
You and every other "American" that talks like that are the very ones responsible for our unavoidable demise, and hastily turned absolute power over to George Bush. The new world order is in place. What other president begins the State of the Union Address with a statement like "I don't have to give it it has already been delivered" following the Patriot Act resolution. America is gone. It took 100 years to get the World Court, the court Hitler wanted after burning down their state building to persuade the people to give him absolute power to kill at will (funded of coarse by Prescott Bush, Goerge Jr's grandfather) and you guys are debating a solution to our place in the world today? Lol go suck the queen's dick, cause that's why royalty has you bow down. Just like George's entire top cabinet has done as honorary Knights of England, their true loyalty. Americans, being lazy pigs, living off the backs of slaves foreign and domestic it's ENTIRE inception, let a long time enemy infiltrate and control our government since the civil War. Research your history them stop these silly ass discussions and roll or get rolled over. WTF are we with a DOMINANT United Nations CONTROLLED WORLD COURT, minus Liberty, the very core of what we were? Face it, America is dead w/out a head and you guys are just the flailing remaining limbs. STFU and pass away, please or get humble and ingenious, which I pray you pick the more positive action.
I don't even know why I'm speaking to you all. With the technology actually available, we don't need a debt system anymore. Who's the genious who thought an entire World would buy that bs for 1000 years? Ordinary citizens that's who. Actually aren't they the Most dispensible? The sacrificial lamb "Patriots" whom, in Prctice, worship the money more than the creator by actually bringing money in order to worship, even though ther's a more prudent way. I could go on forever but it's building up to one thing...whatever has happened in America is the people's mess, and the way you're talking isn't cleaning the floor, so it serves those right that slip in their own shit.
Amvet, corporate greed is just 'noncompetitive tax and regulatory system' by another name. And no "home countries" have gone "to hell". Trade imbalances have caused SOME people in some countries to suffer, no doubt. Economics = trade offs after all. But functioning political systems allow people to vote for shifts in trade offs. And recent political trends, eg in the US and Japan, indicate that electorates are pushing back against the tradeoffs of the past two decades. The US could help rejuvenate its manufacturing economy by lowering corporate tax rates and easing regulatory burdens, but that seems unlikely to happen at the moment.
Constitution1, from one gun toting libertarian to (I assume) another: if you or any of your tea party cronies touch one hair on my President's head there'll be hell to pay. And do your homework rather than baby birding right minded hyperbole.
First, Cloward and Piven had a goal of implementing a guaranteed minimum income to every American; one of their tactics to spur that was to overwhelm local and regional welfare rolls by enrolling all *eligible* recipients. Socialist? Definitely. Communist? Not quite. Is socialism always and everywhere a road to serfdom? Maybe, but I'm skeptical. Here's one example: if you understand finance, then you'll understand that public benefits that exist for all citizens - eg, Australia's super annuity fund, Alaska's natural resource dividend - are smaller scale analogues to the kind of national lifetime pension that Cloward and Piven envisioned. Other analogous ideas are a publicly conferred "birth right" to each citizen (e.g., money put into trust for every natural born citizen). These ideas are obviously unpalatable to some political ideals and principles. But the debate is as timeless as prostitution: all societies struggle with how to optimally allocate (share) resources. And I don't think there's any actual evidence that supports an either/or approach, unfortunately. Plenty of theory, but little evidence.
Second, there is absolutely no evidence that Obama has harmed the US economy since his inauguration - quite the contrary. And while we're myth busting, the same is true of FDR, despite what we both learned while being nourished on the right wing teat (insert Rush Limbaugh joke here). If you look at the ACTUAL DATA with a skeptical/critical mind, you'll note that the seeds for the Great Depression were sewn under Hoover (hell, as far back as McKinley and beyond), and most of the seeds of the current economic turmoil were sewn under Republican rule, with both GWB and WJC in the Oval Office. Under FDR, the economy did OK - much better than it had 1929-1932. It hit a rough patch when deficit hawks caused problems in 1936-37, but otherwise it was apparently preferable to the alternatives, judging by the elections of 1932, 1936, and 1940. And speaking of the Oval Office, don't you dare f*** with my president. You can have Nancy, but leave Barry alone. ;)
by jingo
I have read the above comments with great disdain for the obnoxious Facisist sympathizers. They should beware for they are far outnumbered. Of course the Gulf states, China, Russia, France and Japan have started discussing their practice of conducting oil deals in US dollars and their desire to get out of the dollar. It is a prickly subject, no doubt. It has no historical equivalent. Let them try and do what is in their own best interest but let us find economic and financial stability in returning to hard currency and not waiver from our demands for fair trade because there never was and never will be any "free trade." Once they sold that pipe dream the economic troubles of today were preordained.
For those who think seriously about replacing our flawed monetary system with the surrender of our sovereignty to a one world banking system - well that's not very patriotic, is it? To think about it, anything but ending the foreign majority owned private Fed is not patriotic, either. I say, arrest all the internationalist bankers, seize their assets, pay our debts with the money they have stolen (100 Trillion+) and make peace with the World.
Patriots who call for such real changes, now, and who dis-invest themselves from the delusion of hope sometime tomorrow or in three years are not racist. No, these patriots love their country and their countrymen of all colors. Supporting the current administration is to support eugenics - now, that IS racist. Thinking otherwise is simply not logical. Mr. Soetoro is certainly a new breed of politician - probably the best liar to have ever held the office. But, he's really not the problem; he is merely a puppet of the old world international banking elite. They must be totally defeated at all costs.
For those who think they know economics, here are a few questions for you. Once the self imposed food shortages start this winter due to the federal government's "misguided" policy to save a purported endangered minnow, how long will it take the starving to break into their neighbor's back door to find something to eat? How long will it take for people to turn to violence? When there is another false flag operation that kills thousands more Americans how many will be willing to fight to the death to keep their guns and ammunition? Who will prevail in the struggle to disarm America? If you fancy yourself an "economist" these are questions you should think long and hard about before you ever again express that economics is a science and not a philosophy. Flawed economic dogma got us into this - the philosophy of liberty is the only thing that can get us safely out.
If you are not willing to give up everything to maintain your own freedom and to try and protect mine in the process, then you are my enemy. Don't even think about trying to tread on me or my friends.
The real truth of the matter is, as you and I know, that a financial
element in the larger centers has owned the government ever
since the days of Andrew Jackson."
--Franklin D. Roosevelt
(32nd U.S. President)
"It is well enough that people of the nation do not understand
our banking and monetary system, for if they did, I believe there
would be a revolution before tomorrow morning."
--HENRY FORD
(Founder of the Ford Motor Company)
"The money power preys upon the nation in time of peace and
conspires against it in times of adversity. It is more despotic
than monarchy, more insolent than autocracy, more selfish than
bureaucracy. Corporations have been enthroned, an era of corruption
will follow, and the money power of the country will endeavor to
prolong its reign by working upon the prejudices of the people,
until the wealth is aggregated in a few hands, and the republic
is destroyed."
--ABRAHAM LINCOLN
(16th U.S. President)
"Controlling our currency, receiving our public moneys,
and holding thousands of our citizens in dependence would
be more formidable and dangerous than a military power
of the enemy."
--ANDREW JACKSON
(7th U.S. President)
"Banking institutions are more dangerous to our liberties
than standing armies. If the American people ever allow private
banks to control the issue of their currency, first by inflation,
then by deflation, the banks and corporations that will grow up
around will deprive the people of all property until their children
wake-up homeless on the continent their fathers conquered."
--THOMAS JEFFERSON
(3rd U.S pres
http://avalon.law.yale.edu/18th_cen
George Washington's Farewell Address 1796
excerpt>
In contemplating the causes which may disturb our Union, it occurs as matter of serious concern that any ground should have been furnished for characterizing parties by geographical discriminations, Northern and Southern, Atlantic and Western; whence designing men may endeavor to excite a belief that there is a real difference of local interests and views. One of the expedients of party to acquire influence within particular districts is to misrepresent the opinions and aims of other districts. You cannot shield yourselves too much against the jealousies and heartburnings which spring from these misrepresentations; they tend to render alien to each other those who ought to be bound together by fraternal affection. The inhabitants of our Western country have lately had a useful lesson on this head; they have seen, in the negotiation by the Executive, and in the unanimous ratification by the Senate, of the treaty with Spain, and in the universal satisfaction at that event, throughout the United States, a decisive proof how unfounded were the suspicions propagated among them of a policy in the General Government and in the Atlantic States unfriendly to their interests in regard to the Mississippi; they have been witnesses to the formation of two treaties, that with Great Britain, and that with Spain, which secure to them everything they could desire, in respect to our foreign relations, towards confirming their prosperity. Will it not be their wisdom to rely for the preservation of these advantages on the Union by which they were procured ? Will they not henceforth be deaf to those advisers, if such there are, who would sever them from their brethren and connect them with aliens?
To the efficacy and permanency of your Union, a government for the whole is indispensable. No alliance, however strict, between the parts can be an adequate substitute; they must inevitably experience the infractions and interruptions which all alliances in all times have experienced. Sensible of this momentous truth, you have improved upon your first essay, by the adoption of a constitution of government better calculated than your former for an intimate union, and for the efficacious management of your common concerns. This government, the offspring of our own choice, uninfluenced and unawed, adopted upon full investigation and mature deliberation, completely free in its principles, in the distribution of its powers, uniting security with energy, and containing within itself a provision for its own amendment, has a just claim to your confidence and your support. Respect for its authority, compliance with its laws, acquiescence in its measures, are duties enjoined by the fundamental maxims of true liberty. The basis of our political systems is the right of the people to make and to alter their constitutions of government. But the Constitution which at any time exists, till changed by an explicit and authentic act of the whole people, is sacredly obligatory upon all. The very idea of the power and the right of the people to establish government presupposes the duty of every individual to obey the established government.
I have already intimated to you the danger of parties in the State, with particular reference to the founding of them on geographical discriminations. Let me now take a more comprehensive view, and warn you in the most solemn manner against the baneful effects of the spirit of party generally.
This spirit, unfortunately, is inseparable from our nature, having its root in the strongest passions of the human mind. It exists under different shapes in all governments, more or less stifled, controlled, or repressed; but, in those of the popular form, it is seen in its greatest rankness, and is truly their worst enemy.
The alternate domination of one faction over another, sharpened by the spirit of revenge, natural to party dissension, which in different ages and countries has perpetrated the most horrid enormities, is itself a frightful despotism. But this leads at length to a more formal and permanent despotism. The disorders and miseries which result gradually incline the minds of men to seek security and repose in the absolute power of an individual; and sooner or later the chief of some prevailing faction, more able or more fortunate than his competitors, turns this disposition to the purposes of his own elevation, on the ruins of public liberty.
Without looking forward to an extremity of this kind (which nevertheless ought not to be entirely out of sight), the common and continual mischiefs of the spirit of party are sufficient to make it the interest and duty of a wise people to discourage and restrain it.
It serves always to distract the public councils and enfeeble the public administration. It agitates the community with ill-founded jealousies and false alarms, kindles the animosity of one part against another, foments occasionally riot and insurrection. It opens the door to foreign influence and corruption, which finds a facilitated access to the government itself through the channels of party passions. Thus the policy and the will of one country are subjected to the policy and will of another.
There is an opinion that parties in free countries are useful checks upon the administration of the government and serve to keep alive the spirit of liberty. This within certain limits is probably true; and in governments of a monarchical cast, patriotism may look with indulgence, if not with favor, upon the spirit of party. But in those of the popular character, in governments purely elective, it is a spirit not to be encouraged. From their natural tendency, it is certain there will always be enough of that spirit for every salutary purpose. And there being constant danger of excess, the effort ought to be by force of public opinion, to mitigate and assuage it. A fire not to be quenched, it demands a uniform vigilance to prevent its bursting into a flame, lest, instead of warming, it should consume.
Good!
And watch the pound flutter and fall. Bring on the Euro by 2020. 2016?
The EU is losing an opportunity to push for a more rational, democratic, stable and equitable world monetary system. For more info about this reasoning see: http://is.gd/4exQs