The European Experience

Following the conclusion of World War II - WW2, Germany and France created the European Coal and Steel Community - ECSC to promote trade prosperity in Europe. Out of the ECSC came European Union - EU, which would help lay the ground work for the European Central Bank - ECB and the euro. Since 1999, the euro has existed as a global currency and competed directly with the U.S. dollar. The lack of single European fiscal authority and a European Treasury comparable to the U.S. Treasury is the only thing that stands in the way of the euro overtaking the U.S. dollar as the leading global reserve currency. Two events, China going through a political transformation or Europe creating a European wide fiscal mechanism will cause either the Chinese Yuan or European Euro to overtake the U.S. dollar.