Today’s announcement that Europe (at least the few remaining solvent countries) have agreed to join the Chinese led infrastructure bank is the end of the dollar. We can debate this point but it will not make a difference.
The consequences will soon be felt at the market: both the grocery store and stock market.
Major European “Allies” Desert Obama, Join China-led Infrastructure Bank
It appears the sea of de-dollarization has reached the shores of Europe. With Australia and UK having already moved in the direction of joining the China-led AIIB, The FT reports that France, Germany, and Italy have now all agreed to join the development bank as ‘pivot to Asia’ appears to be Plan B for Europe.
As Greg Sheridan previously noted, “the saga of the China Bank is almost a textbook case of the failure of Obama’s foreign policy,” but as The FT concludes, the European decisions represent a significant setback for the Obama administration, which has argued that western countries could have more influence over the workings of the new bank if they stayed together on the outside.
As Forbes notes, this leaves Obama with 3 uncomfortable options…by