One decisive element is missing: the Internet’s underlying architecture itself. Beyond software dependency (Microsoft, cloud services, ERPs...), financial rails (SWIFT), and platforms, Europe relies on US-controlled infrastructure at every level: DNS, root authorities, CDNs, Cloudflare, relay servers, security services, certificates, and de-facto standards. Even when servers are physically located in Europe, control remains American — legally, contractually, and operationally. The United States does not need sanctions or military force; it already holds the switches. It is increasingly difficult to identify what, in the actual functioning of European societies — administrations, companies, local governments, associations — is not under US control. Any geopolitical scenario that ignores this material reality is reasoning about a world that no longer exists.
..not to mention that the largest army in Europe at present is actually the American (occupation) Army.
And that the European political ruling classes are selected or endorsed by Washington, European spy services are integrated with the CIA, and that at the top of the social hierarchy in all European countries are ruthless comprador elites whose interests are bound to the globalised dollar order imposed by the US.
... and as further addendum after having read the piece, there is no way Germany can break off of US influence.
The country is technically still an occupied territory, with a provisional constitutional order. The roof of the Reichstag has intentionally been left with holes from the battle of Berlin covered from the elements only with glass panels, to remind the country its present subordinate state.
Ditto for Austria, and I suppose for Italy as well.
So why would the United States voluntarily and willingly abandon their unofficial colonies, if right now they enjoy unchallenged control over them?
The author assumes the EU having far more agency than it possesses in the real world. This seems the trend with most Americans. They elevate Europe to the role of a potential antagonist, in order to flatter themselves they can still clearly outdo at least one other player on an increasingly multipolar world stage.
The EU is a joke with overpaid globalised finance flunkies at the helm. They are just playing bad cop with Russia right now, because they are told so by America, but this goes against their interests. No European takes the EU and its overpaid apparatus seriously, a part from the Baltics I guess.
I agree on the substance, but the issue is functional control. Greenland is already a war scenario aimed at weakening the EU — not to destroy it, but to keep it usable as a relay rather than as an autonomous strategic actor, in line with the 2025 NSS.
It's hard to dig anything in Greenland though... Internet infrastructure included, I guess. The place, especially the barren interior, is under a perennial cap of ice (not a simple glacier) at unworldly temperatures all year round
Around 1960 (approximately) the Americans wanted to use Greenland for the Iceworm project – a system of tunnels under the ice sheet, connected by a railway network leading to nuclear missile depots (all destined for the USSR). However, the ice proved unstable and drilling extremely difficult, so after a few years the project was abandoned.
While Europe is deeply dependant on the US, there might be a misconception here.
US troops are not occupying Europe. They are here because European countries want them there. They are much more like hostages to be certain that if ever the Russian attack, there will be US soldiers among the first casualties and the US cannot back down or pretend they are not involved. No more WW1 or WW2 delaying.
So if the European want them to go, US troops will pack, go home and save money. Trump might even be waiting for just that...
Yes. A few of them. Not enough to occupy the country. But just enough to ensure that if ISIS or anyone else attacks again, there will be American casualties. And far away Washington cannot ignore it.
This is the same in Europe. Actually, article 5 of NATO doesn't say that all countries must fight if one of them is attacked. It just say that they all must consider themself as attacked. This is not the same at all.
So in order to ensure that the US would be involved from the outset, European countries made sure that US troops stayed deployed in Germany. These are tangible security guarantees, whereas the treaty is nothing more than words.
You are probably one of those mythical people who -like everybody else- receives e-mails from Nigerian princes asking for money, but who actually do reply to them kindly, and send them the money they wish for
Russia and China are precisely the counter-examples that prove the point. Their internet “works fine” because they deliberately built sovereign stacks over 20 years: national clouds, domestic platforms, alternative payment rails (SPFS, CIPS), state control over DNS routing, and the political capacity to absorb disruption. Europe did the opposite. It outsourced its core functions to US vendors for efficiency and convenience. The issue is not whether an internet can function outside US control in theory — it clearly can. The issue is that Europe no longer can, without systemic disruption, because it never built the infrastructure to do so.
Meddling? Had the Serbs and Russians not meddled in Black Hand Terrorism shooting the Archduke in Sarajevo - this only being one instance of meddling but the one that dragged America in reluctantly - we’d not be having this conversation.
Tell me your country so I can list your virtuous deeds … aka meddling.
No matter. At present the USA has a government that is trying to extract us from Europe and concentrate on the Western Hemisphere,
We should have left Europe 35 years ago when the Warsaw pact ended. We are presently making it difficult to be our partner for this reason. Breaking up is hard to do.
As for Greenland it’s basic geography especially with the Northern Routes thawing.
We don’t have a choice.
We’ll almost certainly buy Greenland, but any scenario that leads to a breakup with NATO is beneficial to us.
Ahistorical? We were also involved in regime change in 1941- 1945, so interesting point to start the clock. We didn’t just suddenly start “regime change” 🤣 from nothing. “And then one day for no particular reason the USA suddenly started Regime change “
And here is the No. 4 sczenario (as it seems to be announced at the Geneva WEF forum): Trump, after seeing a downtrend on the stock market, makes a treaty with the EU and NATO, that the US is allowed to position more troups on Greenland to protect (anyone who seems to be concerned) against the bad Chinese and Russians. Plus some US Companies get contracts to exploit minerals.
Trump again has won and made peace and flies home gloriously.
Then the US companies explore their prospects and decide it is not financially possible for them to extract resources from Greenland. They need the government to provide the infrastructure to get to the minerals/resources they want and to transport the minerals/resources out to sell, which isn't going to happen.
Yes. I agree with you. At least on the short term. Greenland will be american in all but name without a single shot.
Then, as the situation will still be unresolved and the European somehow humiliated, on a longer term, something like our host's 2d or 3d scenario can still take place.
NATO is destroying itself in Ukraine. Russia is on the threshold of a strategic victory the world hasn't seen since 1945. Donald Trump has nothing to do with it. The expansion of NATO finally reached a limit.
Brilliant, deeply imaginative stuff, not intended as actually predictive, which renders criticism of the three scenarios irrelevant. Some version of elements of all may well come to pass in the theater of idiocy that Trump is producing.
Fun hypotheticals. I think they're a bit short on the economic side of things. American military power is very dependent on American economic power which in turn is very dependent on the USDs reserve currency status. If NATO breaks apart (especially due to something the US instigated), the chances of the USD retaining this status are quite slim. That would send the US into a deep depression that'll make the Great Depression look like the Sunday Blues. China would be sure to step into the resulting economic vacuum.
A lot of people have this idea, that basically treats “reserve currency status” as a single political badge that can be lost quickly, and it ignores the deep, mechanical role the dollar system plays in global finance.
The dollar is infrastructure, not just preference, it is embedded in the plumbing of global finance: bank balance sheets, trade invoicing, commodity pricing, FX swaps, derivatives margining, and—critically—repo markets. US Treasuries are not just “debt”; they are the primary form of high-quality collateral globally. Replacing this is not a matter of sentiment or alliance politics. There is no other market with comparable depth, liquidity, legal clarity, and capacity to absorb trillions in safe collateral demand.
Treasuries anchor the global banking system. Modern banking and shadow banking rely on Treasuries as the risk-free reference asset. Repo markets, which are the backbone of short-term funding, function because Treasuries are universally acceptable collateral. If the dollar were to “lose reserve status” in the way suggested, the immediate result would not be a smooth transition to another currency—it would be a global collateral crisis. That alone explains why no major economy actively wants to replace the dollar.
Besides, no country wants the world currency role. Being the issuer of the global reserve currency is a burden, not a prize. It requires: persistent current-account deficits; open capital accounts; tolerance for foreign ownership of domestic assets, and; a willingness to export liquidity during crises
The US can do this because its political economy tolerates it. China cannot without dismantling capital controls and losing monetary sovereignty. Europe cannot because it lacks a unified fiscal authority. Japan cannot because of scale and demographics. Russia cannot for obvious reasons.
A lot of people have this idea... that every commentor on the internet is an idiot who doesn't know what they're talking about... Sigh... I've actually worked in the financial markets for well over a decade.
I skipped over some details because I didn't want to burden a short comment with lots of minor details. If you want to talk about the nuances of the USD reserve currency status, then one of those nuances has to be that it is already losing ground and has been for quite some time now. The Ukraine mess (and the massive overreaction to it) have sped up the pace. Foreign central banks are already starting to divest from US Treasuries. SAFE has been reducing its treasury holdings for over a decade: https://www.globaltimes.cn/page/202601/1353386.shtml.
US Treasuries are just one of many safe haven assets. European debt has traditionally been considered safe. So have JGBs and a number of other sovereigns. If the Chinese government wanted, they could definitely add Yuan denominated government bonds in the same category. If all else fails, there's always gold. And repo as the reserve currency savior is even sillier. They're daily contracts! They have to get constantly renewed or they disappear and there are at least half a dozen different ways to borrow cheaply starting with the Chinese repo market which very much exists. Besides, the market shifts across financial technology all the time. Before there was repo, there were fed funds loans. There is commercial paper. Or Banker's Acceptances. A shift from USD denominated repo to some other instrument would be at most as complicated as a shift from LIBOR to the various SOFR rates which wasn't easy but it wasn't exactly that difficult either.
In reality, the stickiest parts of the USD system are the first set of things you mentioned: custodial banks, invoicing and clearing systems, etc... But these institutions are only important because they have built up a reputation as impartial actors. Every time the US pulls some stunt like the Russia Sanctions, people are reminded that these nominally impartial institutions can be weaponized against them. A break-up of NATO, especially one triggered by unreasonable US demands, would in my opinion be the point of no return. Why should anyone trust BNY or DTC if their parent country is willing to shit on its most important military alliance?!
And reserve currency as a burden is just nonsense on stilts. Another way of describing a current account deficit is random foreigners sending you free shit in exchange for paper. Nor are these an inevitability. A critical component of the US current account deficit is the massive issuance of USTs driven by our welfare state. No welfare state, no account deficits. Foreign ownership of domestic assets likewise manifests as a massive appreciation of domestic assets. Appreciation that mostly ends up in the citizen's pockets! After all, the biggest holders of Yuan and Yuan-denominated assets right now are... the Chinese! If the Yuan did become the new reserve currency, certainly the Chinese government would have to change some policies. But at the same time, it would add untold riches to every Chinese citizen and China would leap ahead of every other country in a few short years (even more than they already have). And open capital accounts and exporting liquidity just mean that your regulatory reach now extends far beyond just your national borders.
Reserve currency status is all upside. It's what lets us spend obscene amounts on our welfare state and on our MIC at the same time. It lets us live well beyond our means. It lets us use a money printer instead of doing real work. All the negative effects people see are the result of our own lack of discipline. At best, reserve currency status enables laziness the same way a trust fund lets spoilt rich kids follow their dreams and travel the world. Would you say no to a giant strings-free trust fund?
I am not telling you're an idiot, but you're letting your biases contaminate your analysis.
> Reserve currency status is all upside
There's no such thing in economics as "all upside". The list of trade-offs of being an issuer of the world's reserve currency is on my previous comment, and I won't repeat them. Ask any blue-collar family in the rust belt if you want a more practical example of those trade-offs.
I am not a fan of American imperialism or of the global financial system. But the reality is not like I wanted it to be. Eventually, the dollar system will be eclipsed, but we are nowhere closer to that, no matter how strongly we wished this is true.
Let's take JPMorgan's paper. As you said, it is nuanced, and it concentrates on trade and commodities market, and ignores that a lot of the increased trade in other currencies is driven by sanctions. Russia is selling his oil at a significant discount, transaction costs are higher and liquidity worse. Those are workarounds of a conjunctural situation, not efficiency-driven movements.
> US Treasuries are just one of may safe haven assets is basically saying that cold days are just one of the many weathers you can have in Siberia. Nonsense. No other asset currently can support the same volumes with the same liquidity. And of course, nobody in the system is interested in this. Because everyone who counts is sitting over mountains of dollar denominated assets.
> I am not telling you're an idiot, but you're letting your biases contaminate your analysis.
Fair enough! Thanks. I was trying to be funny and went a bit too far I guess.
> There's no such thing in economics as "all upside".
More money is strictly better that lesser money. Money is all upside! So is better infrastructure, lower corruption, etc... In general, TANSTAAFL is a pithy but rather narrowly applicable statement that only applies on the efficient frontier for some specific technology. It's more a statement about _engineering_ than it is about economics imo... Appropriate given that Heinlein was an engineer.
> Ask any blue-collar family in the rust belt if you want a more practical example of those trade-offs.
The loss of manufacturing capacity and the corresponding economic destruction of the rust belt is quite awful. But you're wrong to blame reserve currency status for it. The real culprits are all our onerous environmental regulations. Regs like NEPA and the clean water act have destroyed the industrial sector. The industries that do survive are generally grandfathered in (most of our oil refineries for example), have their own special carve-outs (e.g. https://newsletter.doomberg.com/p/the-exception-that-proves-the-rule), or are small-scale/domestic for physical reasons and done at exorbitant cost.
Reserve currency status lets us be a super-power _despite_ the loss of manufacturing capacity. It makes it more bearable. Environmentalism (especially the rabid variety infecting our country) is a luxury belief and without the USD to cushion the impact, we would have hit the brick wall of physics a long time ago. As the most recent REE debacle with China demonstrates, we are not in fact exempt from physics and probably will end up hitting that wall eventually anyway. But is our wealth _responsible_ for our lack of discipline? Call me an idealist but I believe it is possible to be rich and responsible at the same time.
>Eventually, the dollar system will be eclipsed, but we are nowhere closer to that, no matter how strongly we wished this is true.
What's that joke about bankruptcy? It happens slowly and then all at once! I actually agree with you here. The USD is still quite prevalent in international finance (as I know from very close personal experience). But it is the height of hubris to imagine yourself beyond consequences. My original post was in response to a very specific hypothetical where the US did a staggeringly dumb thing. Trump has already backed away from that particular cliff thankfully. But we shouldn't fool ourselves about possible consequences. It just makes us more likely to do some other dumb thing in the future.
> Let's take JPMorgan's paper. As you said, it is nuanced, and it concentrates on trade and commodities market, and ignores that a lot of the increased trade in other currencies is driven by sanctions. Russia is selling his oil at a significant discount, transaction costs are higher and liquidity worse. Those are workarounds of a conjunctural situation, not efficiency-driven movements.
That's... exactly my point? Think of it like switching software (because in lots of cases like SWIFT, it literally is switching software!). The initial version might be a little janky. And there will always be switching costs. But that's hardly a fundamental statement about the relative efficiencies of the two systems. And the existing inefficiencies we observe are caused by the _sanctions_ not the currency used to do the transaction (e.g. hiding from satellites, finding intermediaries who don't mind pissing off the US, etc...). The new currencies (and really clearing and trade systems) reduce the cost of the sanctions which is why people want to use them in the first place. As the JPMC article notes, several commodity flows are switching to e.g. the Yuan. Are Yuan-based oil trades between the Gulf states and China inefficient?
> US Treasuries are just one of may safe haven assets is basically saying that cold days are just one of the many weathers you can have in Siberia. Nonsense. No other asset currently can support the same volumes with the same liquidity. And of course, nobody in the system is interested in this. Because everyone who counts is sitting over mountains of dollar denominated assets.
Sigh... We're back to nonsense here. A single ounce of gold can support the same volumes with the same liquidity. Mint it into a super-special coin, assign it a $100 trillion (or whatever) value. And then trade fractional shares of it. It's just numbers on a spreadsheet. Volumes and liquidity are a function of the _institutions_. The USD became the world reserve currency because (1) people trusted NYC banks (including the most important bank, the Fed) and (2) everyone wanted to trade with the US because (3) it made a quarter of _all the stuff in the world_. (2) and (3) are completely dead. And (1) frays further every time the US uses its financial system like a club or just a way to get more free stuff. Network effects help a lot but they aren't forever. Reserve currencies have changed in the past and will change again in the future.
Onerous environmental regulations? You mean like the exception every single fracking company has gotten for the clean water act, allowing them to pollute the water all over the country, causing an epidemic of chronic illnesses, cancers, and who knows what else?
We are not separate from the environment. Would you put lead in your water before drinking? No, you wouldn’t. So why put lead in your gasoline so when it gets burned it comes out your car’s tailpipe and goes into our streams, to be taken up by animals that we the eat? You can thank the Clean Water Act for this change, and thank the environmentalists who pushed for it.
PFOS, microplastics, pesticides, and a thousand other categories of toxins are doing multi-generational harm
to our health. Problems such as endocrine disruption from
plastics don’t just affect the current generation. Studies with rats show effects can last 4+ generations. These poisons damage us for a longtime.
Look at reduced sperm count over recent decades. Look at rapidly increasing rates of chronic illness, mental disorders, and other health issues.
And it’s not just humans - nonhumans like deer are seeing drops in sperm counts too! Pollinators like bees are dropping rapidly, birds and other insects too. We will not survive without them.
And FFS, don’t blame environmentalists for deindustrialization. The ruling class could have changed a few policies and kept factories at home, forced them to operate cleanly (perhaps with new cleaner technologies - put American innovation to work) and everyone wins. The American ruling class was profoundly short-sighted. The environmentalists were not.
200 years from now, if anyone survives, they will remember our generation for producing huge amounts of poisons that they have to live with and avoid centuries later. They will not be proud of us for a few extra years of profligate lifestyles we got in exchange (and profligate only for the rich, at that).
> the exception every single fracking company has gotten for the clean water act
Exactly my point. Without those exceptions, the US would still be a massive net importer of oil and would be far further along the path to irrelevance.
> And FFS, don’t blame environmentalists for deindustrialization. The ruling class could have changed a few policies and kept factories at home, forced them to operate cleanly (perhaps with new cleaner technologies - put American innovation to work) and everyone wins.
Because... operating "cleanly" is free and has no economic costs? That's not how physics and economics work. And "innovation" isn't a magic phrase that can somehow turn idiocies like NEPA or the NRC into workable systems.
If you want to claim these costs are worthwhile, fine. But don't shy away from the (obvious and predictable) consequences of your policies.
> 200 years from now...
And in the meantime, China will leapfrog us economically. Which... is a choice. You can be in favor of either option but don't pretend we can have it all by sheer force of will. Again, that not how physics or economics work.
Unless of course the US elected government regains control of the Federal Reserve and says drop 2 points and it has gotten control and did say it.
Unless we 🇺🇸 reshore our industries and we are-
Unless of course the world with money outside China wants to keep financing America and it is…. In exchange for military alliances they are investing in Industries in America (as a Veteran I’m extremely pleased we were fighting for factories instead of T-Bills we pay interest on) and the world wants to keep us as ally and will as long as we control the seas and have the most powerful military that can project power and we do…
Especially that part of the world that agrees mostly with the Petrodollar… and it does agree, admittedly with some small hedges.
And by the way, your numbers don't seem correct. You seem to be mixing different statistics.
And define conducting. You can invoice in one currency, and the buyer settle in a different one. Then you have financing, then you have collateral for financing.
Never in history, 95% of international trade was either invoiced or settled in US dollars.
Most people who preach that the end of the dollar is nigh have no fucking idea even how international trade works, lest international finance. Don't go buying every single apocalyptic prediction you read out there.
As I said, trade is minor compared to capital flows. It is not the most important thing. Actually, my company in Brazil could be buying things in Yuan with a loan from a bank backed by a dollar denominated collateral.
Good luck trying to raise a loan at any bank in the world, including Russia, using a yuan backed collateral.
Big Serge should have included a poll for readers to vote on which scenario they think is most likely to occur.
My vote goes to the partitioning of Europe into two military blocks, with the Americans wedged in the middle. That seems like the probable outcome to me.
O Please. There will be no fighting, and europeans no more want to be independent than do dogs.
What is more likely to happen is that the europeans will sell Greenland for the only thing that they really care about, which is getting America to fight Russia on their behalf. Again.
I think the Europeans are puppets of the USA, which keeps pressure on Russia by way of these vassal puppet European States, while American resources are spared for the coming "pivot to East Asia Pacific".
There is no incentive for European states to renounce to cheap Russian energy and raw materials and in so doing to condemn the continent to inevitable industrial demise due to lack of competitiveness on the global markets. Clearly the EU's aggressive stance towards Russia makes no sense other than it's what they're being ordered to do by their masters across the ocean.
America's strategy has been lately to have others to fight for it, especially if the enemy is strong, so if anything they will try to make Europeans to fight Russia...
> There is no incentive for European states to renounce to cheap Russian energy and raw materials and in so doing to condemn the continent to inevitable industrial demise due to lack of competitiveness on the global markets.
There is. Perhaps not for the States in the abstract, but for the rulers in practice. Remember, they're all post-modernists. They care about power above all else, not about prosperity, which they don't understand, if they even consider it a weal. The weaker the citizenry, the more power they have. Internally, at least, rather than externally -- and there arises what little dilemma they face.
Years later in history books covering the era, there would be a frequent humorous aside about how shorty before these events history was frequently declared to be “over”.
Thanks Big Serge (I was going to abbreviate it to BS but that wouldn’t be respectful or in any way accurate 😊). Very interesting and well researched as usual. As far as EU warnings about the end of NATO, Trump is likely to say fine. Kellyjohnston on Substack had an interesting take on Greenland. I tried to copy the link but something went wrong. Sorry.
Unfortunately, Mr. Serge, your 3 scenarios are cartoonish as opposed to being based on any form of coherent analysis.
Scenario 1: The EU "defending" Greenland with actual real numbers of troops is a laughable idea.
Scenario 2: Trump would never pay $700B for Greenland. It would be orders of magnitude less, because precisely Denmark has no capability to defend Greenland.
And Scenario 3 is the worst: because it would not be Denmark failing to stand up against Trump - it would be Denmark failing to stand up against the rest of the EU.
The Germans, the French, the Poles, the EU Commission - none of these entities care about Denmark and Greenland any more than they cared about Belgium and Euroclear with respect to the fallout from any successful theft of frozen Russian Central Bank funds.
One decisive element is missing: the Internet’s underlying architecture itself. Beyond software dependency (Microsoft, cloud services, ERPs...), financial rails (SWIFT), and platforms, Europe relies on US-controlled infrastructure at every level: DNS, root authorities, CDNs, Cloudflare, relay servers, security services, certificates, and de-facto standards. Even when servers are physically located in Europe, control remains American — legally, contractually, and operationally. The United States does not need sanctions or military force; it already holds the switches. It is increasingly difficult to identify what, in the actual functioning of European societies — administrations, companies, local governments, associations — is not under US control. Any geopolitical scenario that ignores this material reality is reasoning about a world that no longer exists.
..not to mention that the largest army in Europe at present is actually the American (occupation) Army.
And that the European political ruling classes are selected or endorsed by Washington, European spy services are integrated with the CIA, and that at the top of the social hierarchy in all European countries are ruthless comprador elites whose interests are bound to the globalised dollar order imposed by the US.
... and as further addendum after having read the piece, there is no way Germany can break off of US influence.
The country is technically still an occupied territory, with a provisional constitutional order. The roof of the Reichstag has intentionally been left with holes from the battle of Berlin covered from the elements only with glass panels, to remind the country its present subordinate state.
Ditto for Austria, and I suppose for Italy as well.
So why would the United States voluntarily and willingly abandon their unofficial colonies, if right now they enjoy unchallenged control over them?
The author assumes the EU having far more agency than it possesses in the real world. This seems the trend with most Americans. They elevate Europe to the role of a potential antagonist, in order to flatter themselves they can still clearly outdo at least one other player on an increasingly multipolar world stage.
The EU is a joke with overpaid globalised finance flunkies at the helm. They are just playing bad cop with Russia right now, because they are told so by America, but this goes against their interests. No European takes the EU and its overpaid apparatus seriously, a part from the Baltics I guess.
I agree on the substance, but the issue is functional control. Greenland is already a war scenario aimed at weakening the EU — not to destroy it, but to keep it usable as a relay rather than as an autonomous strategic actor, in line with the 2025 NSS.
It's hard to dig anything in Greenland though... Internet infrastructure included, I guess. The place, especially the barren interior, is under a perennial cap of ice (not a simple glacier) at unworldly temperatures all year round
Around 1960 (approximately) the Americans wanted to use Greenland for the Iceworm project – a system of tunnels under the ice sheet, connected by a railway network leading to nuclear missile depots (all destined for the USSR). However, the ice proved unstable and drilling extremely difficult, so after a few years the project was abandoned.
While Europe is deeply dependant on the US, there might be a misconception here.
US troops are not occupying Europe. They are here because European countries want them there. They are much more like hostages to be certain that if ever the Russian attack, there will be US soldiers among the first casualties and the US cannot back down or pretend they are not involved. No more WW1 or WW2 delaying.
So if the European want them to go, US troops will pack, go home and save money. Trump might even be waiting for just that...
Both statements can be true. A dog may be a dog, but more than any abuse, a dog fears that Master will abandon him.
Like in Iraq, when the Iraqis told them to leave, they left, right?
Europe is not Iraq.
But, it took them a while to leave. And in the end, they did. And the Iraqi government lost half of the country to ISIS. See my point ?
They are still there ...
Yes. A few of them. Not enough to occupy the country. But just enough to ensure that if ISIS or anyone else attacks again, there will be American casualties. And far away Washington cannot ignore it.
This is the same in Europe. Actually, article 5 of NATO doesn't say that all countries must fight if one of them is attacked. It just say that they all must consider themself as attacked. This is not the same at all.
So in order to ensure that the US would be involved from the outset, European countries made sure that US troops stayed deployed in Germany. These are tangible security guarantees, whereas the treaty is nothing more than words.
This also is true.
You are probably one of those mythical people who -like everybody else- receives e-mails from Nigerian princes asking for money, but who actually do reply to them kindly, and send them the money they wish for
Not quite and Russian and Chinese internet is working just fine.
Russia and China are precisely the counter-examples that prove the point. Their internet “works fine” because they deliberately built sovereign stacks over 20 years: national clouds, domestic platforms, alternative payment rails (SPFS, CIPS), state control over DNS routing, and the political capacity to absorb disruption. Europe did the opposite. It outsourced its core functions to US vendors for efficiency and convenience. The issue is not whether an internet can function outside US control in theory — it clearly can. The issue is that Europe no longer can, without systemic disruption, because it never built the infrastructure to do so.
Great ! Hopefully we’ll 🇺🇸never see or hear of the entire Eastern Hemisphere again.
👋🏻
That would be possible is the USA stopped meddling in the other people's affairs, but you won't.
A Serb perchance?
Hmm. Meddling you say?
Perhaps a Russian?
Meddling? Had the Serbs and Russians not meddled in Black Hand Terrorism shooting the Archduke in Sarajevo - this only being one instance of meddling but the one that dragged America in reluctantly - we’d not be having this conversation.
Tell me your country so I can list your virtuous deeds … aka meddling.
No matter. At present the USA has a government that is trying to extract us from Europe and concentrate on the Western Hemisphere,
We should have left Europe 35 years ago when the Warsaw pact ended. We are presently making it difficult to be our partner for this reason. Breaking up is hard to do.
As for Greenland it’s basic geography especially with the Northern Routes thawing.
We don’t have a choice.
We’ll almost certainly buy Greenland, but any scenario that leads to a breakup with NATO is beneficial to us.
Cheers
Oh please spare me of your ahistorical BS. Some real history: Since 1945 the USA was involved in 60+ regime change operations abroad.
Ahistorical? We were also involved in regime change in 1941- 1945, so interesting point to start the clock. We didn’t just suddenly start “regime change” 🤣 from nothing. “And then one day for no particular reason the USA suddenly started Regime change “
… and your country is what country?
And here is the No. 4 sczenario (as it seems to be announced at the Geneva WEF forum): Trump, after seeing a downtrend on the stock market, makes a treaty with the EU and NATO, that the US is allowed to position more troups on Greenland to protect (anyone who seems to be concerned) against the bad Chinese and Russians. Plus some US Companies get contracts to exploit minerals.
Trump again has won and made peace and flies home gloriously.
No one can make up this stuff.
Then the US companies explore their prospects and decide it is not financially possible for them to extract resources from Greenland. They need the government to provide the infrastructure to get to the minerals/resources they want and to transport the minerals/resources out to sell, which isn't going to happen.
But Trump had his show and his headlines. So who cares?
Until it does.
Yes. I agree with you. At least on the short term. Greenland will be american in all but name without a single shot.
Then, as the situation will still be unresolved and the European somehow humiliated, on a longer term, something like our host's 2d or 3d scenario can still take place.
NATO is destroying itself in Ukraine. Russia is on the threshold of a strategic victory the world hasn't seen since 1945. Donald Trump has nothing to do with it. The expansion of NATO finally reached a limit.
Brilliant, deeply imaginative stuff, not intended as actually predictive, which renders criticism of the three scenarios irrelevant. Some version of elements of all may well come to pass in the theater of idiocy that Trump is producing.
These are always fun. You need to do more. I want detailed descriptions of how/when the US finally "pacifies" Canada.
Fun hypotheticals. I think they're a bit short on the economic side of things. American military power is very dependent on American economic power which in turn is very dependent on the USDs reserve currency status. If NATO breaks apart (especially due to something the US instigated), the chances of the USD retaining this status are quite slim. That would send the US into a deep depression that'll make the Great Depression look like the Sunday Blues. China would be sure to step into the resulting economic vacuum.
A lot of people have this idea, that basically treats “reserve currency status” as a single political badge that can be lost quickly, and it ignores the deep, mechanical role the dollar system plays in global finance.
The dollar is infrastructure, not just preference, it is embedded in the plumbing of global finance: bank balance sheets, trade invoicing, commodity pricing, FX swaps, derivatives margining, and—critically—repo markets. US Treasuries are not just “debt”; they are the primary form of high-quality collateral globally. Replacing this is not a matter of sentiment or alliance politics. There is no other market with comparable depth, liquidity, legal clarity, and capacity to absorb trillions in safe collateral demand.
Treasuries anchor the global banking system. Modern banking and shadow banking rely on Treasuries as the risk-free reference asset. Repo markets, which are the backbone of short-term funding, function because Treasuries are universally acceptable collateral. If the dollar were to “lose reserve status” in the way suggested, the immediate result would not be a smooth transition to another currency—it would be a global collateral crisis. That alone explains why no major economy actively wants to replace the dollar.
Besides, no country wants the world currency role. Being the issuer of the global reserve currency is a burden, not a prize. It requires: persistent current-account deficits; open capital accounts; tolerance for foreign ownership of domestic assets, and; a willingness to export liquidity during crises
The US can do this because its political economy tolerates it. China cannot without dismantling capital controls and losing monetary sovereignty. Europe cannot because it lacks a unified fiscal authority. Japan cannot because of scale and demographics. Russia cannot for obvious reasons.
A lot of people have this idea... that every commentor on the internet is an idiot who doesn't know what they're talking about... Sigh... I've actually worked in the financial markets for well over a decade.
If you want a more nuanced take, start here: https://www.jpmorgan.com/insights/global-research/currencies/de-dollarization.
I skipped over some details because I didn't want to burden a short comment with lots of minor details. If you want to talk about the nuances of the USD reserve currency status, then one of those nuances has to be that it is already losing ground and has been for quite some time now. The Ukraine mess (and the massive overreaction to it) have sped up the pace. Foreign central banks are already starting to divest from US Treasuries. SAFE has been reducing its treasury holdings for over a decade: https://www.globaltimes.cn/page/202601/1353386.shtml.
US Treasuries are just one of many safe haven assets. European debt has traditionally been considered safe. So have JGBs and a number of other sovereigns. If the Chinese government wanted, they could definitely add Yuan denominated government bonds in the same category. If all else fails, there's always gold. And repo as the reserve currency savior is even sillier. They're daily contracts! They have to get constantly renewed or they disappear and there are at least half a dozen different ways to borrow cheaply starting with the Chinese repo market which very much exists. Besides, the market shifts across financial technology all the time. Before there was repo, there were fed funds loans. There is commercial paper. Or Banker's Acceptances. A shift from USD denominated repo to some other instrument would be at most as complicated as a shift from LIBOR to the various SOFR rates which wasn't easy but it wasn't exactly that difficult either.
In reality, the stickiest parts of the USD system are the first set of things you mentioned: custodial banks, invoicing and clearing systems, etc... But these institutions are only important because they have built up a reputation as impartial actors. Every time the US pulls some stunt like the Russia Sanctions, people are reminded that these nominally impartial institutions can be weaponized against them. A break-up of NATO, especially one triggered by unreasonable US demands, would in my opinion be the point of no return. Why should anyone trust BNY or DTC if their parent country is willing to shit on its most important military alliance?!
And reserve currency as a burden is just nonsense on stilts. Another way of describing a current account deficit is random foreigners sending you free shit in exchange for paper. Nor are these an inevitability. A critical component of the US current account deficit is the massive issuance of USTs driven by our welfare state. No welfare state, no account deficits. Foreign ownership of domestic assets likewise manifests as a massive appreciation of domestic assets. Appreciation that mostly ends up in the citizen's pockets! After all, the biggest holders of Yuan and Yuan-denominated assets right now are... the Chinese! If the Yuan did become the new reserve currency, certainly the Chinese government would have to change some policies. But at the same time, it would add untold riches to every Chinese citizen and China would leap ahead of every other country in a few short years (even more than they already have). And open capital accounts and exporting liquidity just mean that your regulatory reach now extends far beyond just your national borders.
Reserve currency status is all upside. It's what lets us spend obscene amounts on our welfare state and on our MIC at the same time. It lets us live well beyond our means. It lets us use a money printer instead of doing real work. All the negative effects people see are the result of our own lack of discipline. At best, reserve currency status enables laziness the same way a trust fund lets spoilt rich kids follow their dreams and travel the world. Would you say no to a giant strings-free trust fund?
I am not telling you're an idiot, but you're letting your biases contaminate your analysis.
> Reserve currency status is all upside
There's no such thing in economics as "all upside". The list of trade-offs of being an issuer of the world's reserve currency is on my previous comment, and I won't repeat them. Ask any blue-collar family in the rust belt if you want a more practical example of those trade-offs.
I am not a fan of American imperialism or of the global financial system. But the reality is not like I wanted it to be. Eventually, the dollar system will be eclipsed, but we are nowhere closer to that, no matter how strongly we wished this is true.
Let's take JPMorgan's paper. As you said, it is nuanced, and it concentrates on trade and commodities market, and ignores that a lot of the increased trade in other currencies is driven by sanctions. Russia is selling his oil at a significant discount, transaction costs are higher and liquidity worse. Those are workarounds of a conjunctural situation, not efficiency-driven movements.
> US Treasuries are just one of may safe haven assets is basically saying that cold days are just one of the many weathers you can have in Siberia. Nonsense. No other asset currently can support the same volumes with the same liquidity. And of course, nobody in the system is interested in this. Because everyone who counts is sitting over mountains of dollar denominated assets.
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> I am not telling you're an idiot, but you're letting your biases contaminate your analysis.
Fair enough! Thanks. I was trying to be funny and went a bit too far I guess.
> There's no such thing in economics as "all upside".
More money is strictly better that lesser money. Money is all upside! So is better infrastructure, lower corruption, etc... In general, TANSTAAFL is a pithy but rather narrowly applicable statement that only applies on the efficient frontier for some specific technology. It's more a statement about _engineering_ than it is about economics imo... Appropriate given that Heinlein was an engineer.
> Ask any blue-collar family in the rust belt if you want a more practical example of those trade-offs.
The loss of manufacturing capacity and the corresponding economic destruction of the rust belt is quite awful. But you're wrong to blame reserve currency status for it. The real culprits are all our onerous environmental regulations. Regs like NEPA and the clean water act have destroyed the industrial sector. The industries that do survive are generally grandfathered in (most of our oil refineries for example), have their own special carve-outs (e.g. https://newsletter.doomberg.com/p/the-exception-that-proves-the-rule), or are small-scale/domestic for physical reasons and done at exorbitant cost.
Reserve currency status lets us be a super-power _despite_ the loss of manufacturing capacity. It makes it more bearable. Environmentalism (especially the rabid variety infecting our country) is a luxury belief and without the USD to cushion the impact, we would have hit the brick wall of physics a long time ago. As the most recent REE debacle with China demonstrates, we are not in fact exempt from physics and probably will end up hitting that wall eventually anyway. But is our wealth _responsible_ for our lack of discipline? Call me an idealist but I believe it is possible to be rich and responsible at the same time.
>Eventually, the dollar system will be eclipsed, but we are nowhere closer to that, no matter how strongly we wished this is true.
What's that joke about bankruptcy? It happens slowly and then all at once! I actually agree with you here. The USD is still quite prevalent in international finance (as I know from very close personal experience). But it is the height of hubris to imagine yourself beyond consequences. My original post was in response to a very specific hypothetical where the US did a staggeringly dumb thing. Trump has already backed away from that particular cliff thankfully. But we shouldn't fool ourselves about possible consequences. It just makes us more likely to do some other dumb thing in the future.
> Let's take JPMorgan's paper. As you said, it is nuanced, and it concentrates on trade and commodities market, and ignores that a lot of the increased trade in other currencies is driven by sanctions. Russia is selling his oil at a significant discount, transaction costs are higher and liquidity worse. Those are workarounds of a conjunctural situation, not efficiency-driven movements.
That's... exactly my point? Think of it like switching software (because in lots of cases like SWIFT, it literally is switching software!). The initial version might be a little janky. And there will always be switching costs. But that's hardly a fundamental statement about the relative efficiencies of the two systems. And the existing inefficiencies we observe are caused by the _sanctions_ not the currency used to do the transaction (e.g. hiding from satellites, finding intermediaries who don't mind pissing off the US, etc...). The new currencies (and really clearing and trade systems) reduce the cost of the sanctions which is why people want to use them in the first place. As the JPMC article notes, several commodity flows are switching to e.g. the Yuan. Are Yuan-based oil trades between the Gulf states and China inefficient?
> US Treasuries are just one of may safe haven assets is basically saying that cold days are just one of the many weathers you can have in Siberia. Nonsense. No other asset currently can support the same volumes with the same liquidity. And of course, nobody in the system is interested in this. Because everyone who counts is sitting over mountains of dollar denominated assets.
Sigh... We're back to nonsense here. A single ounce of gold can support the same volumes with the same liquidity. Mint it into a super-special coin, assign it a $100 trillion (or whatever) value. And then trade fractional shares of it. It's just numbers on a spreadsheet. Volumes and liquidity are a function of the _institutions_. The USD became the world reserve currency because (1) people trusted NYC banks (including the most important bank, the Fed) and (2) everyone wanted to trade with the US because (3) it made a quarter of _all the stuff in the world_. (2) and (3) are completely dead. And (1) frays further every time the US uses its financial system like a club or just a way to get more free stuff. Network effects help a lot but they aren't forever. Reserve currencies have changed in the past and will change again in the future.
Onerous environmental regulations? You mean like the exception every single fracking company has gotten for the clean water act, allowing them to pollute the water all over the country, causing an epidemic of chronic illnesses, cancers, and who knows what else?
We are not separate from the environment. Would you put lead in your water before drinking? No, you wouldn’t. So why put lead in your gasoline so when it gets burned it comes out your car’s tailpipe and goes into our streams, to be taken up by animals that we the eat? You can thank the Clean Water Act for this change, and thank the environmentalists who pushed for it.
PFOS, microplastics, pesticides, and a thousand other categories of toxins are doing multi-generational harm
to our health. Problems such as endocrine disruption from
plastics don’t just affect the current generation. Studies with rats show effects can last 4+ generations. These poisons damage us for a longtime.
Look at reduced sperm count over recent decades. Look at rapidly increasing rates of chronic illness, mental disorders, and other health issues.
And it’s not just humans - nonhumans like deer are seeing drops in sperm counts too! Pollinators like bees are dropping rapidly, birds and other insects too. We will not survive without them.
And FFS, don’t blame environmentalists for deindustrialization. The ruling class could have changed a few policies and kept factories at home, forced them to operate cleanly (perhaps with new cleaner technologies - put American innovation to work) and everyone wins. The American ruling class was profoundly short-sighted. The environmentalists were not.
200 years from now, if anyone survives, they will remember our generation for producing huge amounts of poisons that they have to live with and avoid centuries later. They will not be proud of us for a few extra years of profligate lifestyles we got in exchange (and profligate only for the rich, at that).
I thought Carbon was evil ? Now it’s oil?
So confusing!
> the exception every single fracking company has gotten for the clean water act
Exactly my point. Without those exceptions, the US would still be a massive net importer of oil and would be far further along the path to irrelevance.
> And FFS, don’t blame environmentalists for deindustrialization. The ruling class could have changed a few policies and kept factories at home, forced them to operate cleanly (perhaps with new cleaner technologies - put American innovation to work) and everyone wins.
Because... operating "cleanly" is free and has no economic costs? That's not how physics and economics work. And "innovation" isn't a magic phrase that can somehow turn idiocies like NEPA or the NRC into workable systems.
If you want to claim these costs are worthwhile, fine. But don't shy away from the (obvious and predictable) consequences of your policies.
> 200 years from now...
And in the meantime, China will leapfrog us economically. Which... is a choice. You can be in favor of either option but don't pretend we can have it all by sheer force of will. Again, that not how physics or economics work.
Masterful. Spares me the effort to reply in kind. He argues like an Indian
Unless of course things change and they are;
Unless of course the US elected government regains control of the Federal Reserve and says drop 2 points and it has gotten control and did say it.
Unless we 🇺🇸 reshore our industries and we are-
Unless of course the world with money outside China wants to keep financing America and it is…. In exchange for military alliances they are investing in Industries in America (as a Veteran I’m extremely pleased we were fighting for factories instead of T-Bills we pay interest on) and the world wants to keep us as ally and will as long as we control the seas and have the most powerful military that can project power and we do…
Especially that part of the world that agrees mostly with the Petrodollar… and it does agree, admittedly with some small hedges.
Oh dear..........
In 2020 over 95% of international trade was conducted using the USD. In 2024 it was 70%, by last year it had fallen to 57%.
And by the way, your numbers don't seem correct. You seem to be mixing different statistics.
And define conducting. You can invoice in one currency, and the buyer settle in a different one. Then you have financing, then you have collateral for financing.
Never in history, 95% of international trade was either invoiced or settled in US dollars.
Most people who preach that the end of the dollar is nigh have no fucking idea even how international trade works, lest international finance. Don't go buying every single apocalyptic prediction you read out there.
As I said, trade is minor compared to capital flows. It is not the most important thing. Actually, my company in Brazil could be buying things in Yuan with a loan from a bank backed by a dollar denominated collateral.
Good luck trying to raise a loan at any bank in the world, including Russia, using a yuan backed collateral.
Have you ever heard of Alexander, and how he managed to untie the Gordian knot?
This is good for 🇺🇸 and not as good as they think for the 30%.
"Russia cannot for obvious reasons."
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Be so kind as to state the obvious, for those of us who are oblivious?
Basically the size of the financial market and sanctions.
Having your national currency as the international reserve currency is indeed an enormous advantage on the world stage: https://en.wikipedia.org/wiki/Exorbitant_privilege
As someone on SlashDot posted:
"There won't be a war in Greenland, the Danes will just rename it Epstein Island and Trump will never mention it again."
No mention of Canada? We are so irrelevant 🫥🫥🫥
Hoping for an American invasion to free those of us feeling behind enemy lines
Canada has just opened a consulate in Nuuk, Greenland.
In completely unrelated news Carney also sold Canada to China 🇨🇳, so now sorry we really must have Greenland.
… not kidding. We will have Greenland, but we’ll probably buy it.
Here's one for Canada which I picked up today. It relates to Canada breaking up and, possibly, Alberta aligning with USA.... https://www.zerohedge.com/political/alberta-sees-large-turnout-petition-separate-canada
Canada is mentioned twice in the first scenario.
"Canada contributed a single Arctic Response Company Group."
And later where Canada leaves NATO.
Although I had to google Arctic Response Company Group.
https://en.wikipedia.org/wiki/Arctic_Response_Company_Group
But what about our future? Usa or an outpost of china?
Well since BC Alberta and Saskatchewan would be part of the USA I think the remainder provinces would do well under French control.
Big Serge should have included a poll for readers to vote on which scenario they think is most likely to occur.
My vote goes to the partitioning of Europe into two military blocks, with the Americans wedged in the middle. That seems like the probable outcome to me.
O Please. There will be no fighting, and europeans no more want to be independent than do dogs.
What is more likely to happen is that the europeans will sell Greenland for the only thing that they really care about, which is getting America to fight Russia on their behalf. Again.
Already, it appears that a deal is being set up.
I think the Europeans are puppets of the USA, which keeps pressure on Russia by way of these vassal puppet European States, while American resources are spared for the coming "pivot to East Asia Pacific".
There is no incentive for European states to renounce to cheap Russian energy and raw materials and in so doing to condemn the continent to inevitable industrial demise due to lack of competitiveness on the global markets. Clearly the EU's aggressive stance towards Russia makes no sense other than it's what they're being ordered to do by their masters across the ocean.
European strategy since 1917 has been to get Americans to do the fighting for them.
America's strategy has been lately to have others to fight for it, especially if the enemy is strong, so if anything they will try to make Europeans to fight Russia...
So it was europeans spearheading every assault in Iraq, etc.?
"especially if the enemy is strong"
So what assaults have europeans been bravely charging ahead in?
British and european troops performed poorly in Iraq and Afghanistan (the Poles being an exception).
> There is no incentive for European states to renounce to cheap Russian energy and raw materials and in so doing to condemn the continent to inevitable industrial demise due to lack of competitiveness on the global markets.
There is. Perhaps not for the States in the abstract, but for the rulers in practice. Remember, they're all post-modernists. They care about power above all else, not about prosperity, which they don't understand, if they even consider it a weal. The weaker the citizenry, the more power they have. Internally, at least, rather than externally -- and there arises what little dilemma they face.
Years later in history books covering the era, there would be a frequent humorous aside about how shorty before these events history was frequently declared to be “over”.
Thanks Big Serge (I was going to abbreviate it to BS but that wouldn’t be respectful or in any way accurate 😊). Very interesting and well researched as usual. As far as EU warnings about the end of NATO, Trump is likely to say fine. Kellyjohnston on Substack had an interesting take on Greenland. I tried to copy the link but something went wrong. Sorry.
https://substack.com/home/post/p-185075497
Thanks for the link, Chris.
It is an interesting read!
What could the Austrian painter have accomplished with a high-tech continent of 500 million at his back, including Britain and France?
If only 🍊 was the Austrian Architect.
Он и имел за плечами высокотехнологичный континент в 500 миллионов, включая Францию, Чехию, Италию, только это ему не помогло
No - they were subject peoples conquered and garrisoned by German armies and were not "backing" him in any way. Even Italy was lukewarm.
should become a movie indeed!
A Sliding Doors-style movie in which all three storylines happen simultaneously
Unfortunately, Mr. Serge, your 3 scenarios are cartoonish as opposed to being based on any form of coherent analysis.
Scenario 1: The EU "defending" Greenland with actual real numbers of troops is a laughable idea.
Scenario 2: Trump would never pay $700B for Greenland. It would be orders of magnitude less, because precisely Denmark has no capability to defend Greenland.
And Scenario 3 is the worst: because it would not be Denmark failing to stand up against Trump - it would be Denmark failing to stand up against the rest of the EU.
The Germans, the French, the Poles, the EU Commission - none of these entities care about Denmark and Greenland any more than they cared about Belgium and Euroclear with respect to the fallout from any successful theft of frozen Russian Central Bank funds.
In scenario #1 near the end, I thought the mention of Mearsheimer was hilarious, as it absolutely captured that commentator’s thinking.