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    February 13, 2010


"In the long run, it's easier to maintain
 something than to fix it."

 -- Harley Hahn

The Power of Money

Two days ago, something momentous happened in
Europe. Something that, to me, marks February 11,
2010, as one of the most important days in
European history.

As sure as I am that this is the case, I am just
as sure that most people are unaware of the
significance of what happened, so I'd like to take
a moment to explain it to you.

Throughout most of its history, Europe has been an
extremely warlike place: home to a multitude of
internecine conflicts that pitted one country
against another, played out on a background of
self-serving, ever-changing treaties and
alliances.  As such, the history of Europe has
been, for the most part, the story of one war
after another, culminating with the two worst
conflicts in history: World War I and World War II.

The Europe of today, however, is a most peaceful
place -- in spite of the fact that it is composed
of 51 sovereign states, many of whom have a long
history of mutual distrust.  How can this be?

As you would imagine, the answer to this question
is most certainly complicated, perhaps beyond the
power of human understanding.  Nevertheless, there
is a short answer: the 51 sovereign states of
Europe are finally locked in an eternal embrace of
peace because they have become irrevocably
economically dependent upon one another.

The most powerful factor at play here has been the
European Union (EU), consisting of 27 countries
(in fact, every major European country except
Russia, Switzerland, Turkey and Ukraine).

Another powerful influence has been the
establishment of the "Eurozone", an economic and
monetary union of 16 EU countries that have
adopted the Euro -- the first trans-European
currency -- as their official legal tender.

Why are the EU and the Eurozone so important?  Put
simply, once countries form an economic union
based on a common currency, it becomes impossible
for them to engage in armed conflict against one
another.  Thus, anything that strengthens such
unions acts as a strong force towards peace and
away from war.

All of which leads us to the momentous event that
occurred a few days ago.  For various reasons,
four Eurozone countries are, right now, in the
midst of serious economic difficulties.  These
countries are Portugal, Ireland, Greece, and Spain
(sometimes referred to, a bit pejoratively, as the

The Greek situation is particularly bad.  Within
2-3 months, Greece will have to refinance a large
portion of their national debt.  However, they do
not have nearly enough money to do so.

In the olden days, this would be too bad for
Greece, and the Greek people would, no doubt,
suffer enormously.  Perhaps more important, in the
olden days, the prospect of such a significant
turn of events would destabilize the entire
region, making the chance of war all the more

Today, however, within the Eurozone and the larger
European Union, it is unthinkable that any country
will be allowed to so blatantly default on its
national debt.  Not only would such an outcome
cause serious repercussions within the European
economy, it would wreak havoc on the European
monetary system, deeply affecting the 16 countries
that use the Euro.

Although the solutions to this particular economic
crisis have, as yet, not played out, what was made
clear two days ago at a recent European Summit was
that the Eurozone countries have no intention of
letting Greece succumb to a catastrophic credit

In a pledge of support that is unprecedented in
European history, European leaders declared that
they "will take determined and coordinated action,
if needed, to safeguard financial stability in the
Euro area as a whole".

To put this in perspective, consider the following
list of the 16 Eurozone countries: Austria,
Belgium, Cyprus, Finland, France, Germany, Greece,
Ireland, Italy, Luxembourg, Malta, Netherlands,
Portugal, Slovakia, Slovenia and Spain.

Now consider the fact that, during World War II,
Germany and Italy, the European portion of the
Axis, raged a long, massive war against the
Allies, among which were Belgium, France, Greece,
and Netherlands, all of whom suffered horribly.
Today, all of these countries share a common
currency and are mutually dependent upon one

If we want to understand why such economic forces
are so powerful, we must first understand a more
basic concept: the idea of money.

What, we must ask ourselves, is money?  Where did
it come from?  How has it evolved?  How is it used,
and why is it so powerful?

Would you like to, once and for all, truly
understand money?  If so, I have just the essay
for you:

Understanding Money

-- Harley Hahn