Sep 21, 2009

The EU: Richest Region in the World

Todd StrandbergBy Todd Strandberg

All my life, I've heard people proudly say that the United States is the richest nation on earth. They have said this because it has been true. In the aftermath of World War II, America's net worth was greater than the combined wealth of the rest of the world. We single-handedly funded the rebuilding of Asia and Western Europe.

It now looks like Uncle Sam's reign of glory may have come to an end. There is a new kid on the block called the European Union who has just overtaken us. The recent financial crisis has transformed the global map of the world’s wealthiest people, with Europe nudging out North America as the richest region, according to a new report by The Boston Consulting Group.

Total wealth in Europe now stands at $32.7 trillion. North America is down by 21.8 percent to $29.3 trillion.

Europe's common currency, the euro, has been a key factor in its success. The triumph of the euro has stumped economists who have largely forecasted its failure. The EU nations have radically different legal and cultural traditions, and it lacks a common treasury function that usually stands behind major currencies. Despite the euros’ shortcomings, it has thrived as a currency.

The euro has even achieved reserve currency status. Governments and institutions hoard the euro for its security value. Right now, there are more printed euros in circulation than dollars. The greenback still has the edge in electronic funds, but for the last decade, it has been steadily declining against the euro.

The euros’ gains have not just been in the quantity of bills. Its value has also been soaring. For the past several years, the dollar has been in a relentless exchange rate decline against the euro and most other global currencies. When the euro began trading, it was worth slightly less than the dollar. Today, the euro will buy you $1.47.

America's massive debt load will make it nearly impossible for us to regain our wealth crown. With Asia still growing at 9 percent each year, we could eventually fall to third place.

Europe's toppling of North America raises some important questions. One that will certainly be asked is this: If the Europeans are now wealthier than the Americans, why are we still acting like their protective big brother? Great Britain was once a superpower with an empire that spanned the globe. Decades of deficit spending finally reduced it to a bit player. If America should further implode from some new economic crisis, it would become obvious to all that there will need to be a realignment of the geopolitical stage.

I know Obama's reason for cancelling the missile defense system for Europe had nothing to do with this wealth report, but I think the change itself was a factor. During the 1960s and 1970s, we introduced one weapon system after another into Western Europe with no debate. One key reason Obama abandoned the missile defense shield in Europe is because we lacked the ability to stand up to the Russians.

Obama's weakness to Putin may force Europe to take on the role of superpower. Russia has become very aggressive in recent years, and appeasement has always ended in disaster. Putin fits the role of the Gog leader. He has ordered submarines and bombers to shadow our coastlines, he has invaded one of his southern neighbors, and he temporarily turned off gas supplies to Europe in the middle of the winter.

The Bible points to a revived Roman Empire as being the center of power in the last days. It is an amazing fulfillment of prophecy to have Europe suddenly become the world's top-ranking economy. It is also interesting to note that the EU does not have a strong central leader. The prophetic Scriptures say that the Antichrist will rule for only seven years. It appears we are now at the point of waiting for his arrival.

America may have slipped to second place in the measure of earthly riches, but it is still the capital of eternal wealth. We send more missionaries to the field than any other nation, and we also produce the lion’s share of all gospel material.

"Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moth and rust do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also" (Matthew 6:19-21).

Related Links

EU official: G-20 certain to address financial system reforms -
Iran shifts to euro from dollar in calculating fund value - Reuters
Europe is world's richest - Straits Times
Europe Now Richer than North America - Business Week
Europe Edges Out North America as Richest Region - Wall Street Journal
Bankruptcy of Our Nation: 12 Key Strategies for Protecting Your Finances in These Uncertain Times - Jerry Robinson (Book)