American combat troops have headed home from Iraq, leaving behind a democracy without a government and an ethnically divided nation. In Afghanistan, the Taliban continue to advance and Osama bin Laden is still at large.
Far from winning the ''war on terror'', the US and its closest allies are broke. Plagued by overwhelming debts and suffering from the worst recession since 1929, these countries now live in fear the ratings agencies will downgrade their economies. Is there a link between these events? To answer, we need to revisit bin Laden's theory that September 11 would inflict a mortal blow on the US economy. Though the attack did negligible damage to Wall Street, George W. Bush's response set in motion a chain of negative events.
The Patriot Act, introduced a few weeks after the destruction of the twin towers, failed to curb terrorist financing but it did prompt a massive flight from the dollar: fearing prosecution, Muslim investors repatriated investments worth $US1 trillion.
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Then, to avoid the scrutiny of US authorities, banks suggested their clients switch from dollar to euro investments. Finally, criminal and terrorist organisations relocated most of their money laundering activities from the US mainland to Europe.
By December 2001, these events caused global demand for dollars to shrink, reducing the value of the greenback. In 1993, Dick Cheney clearly stated the neocon desire to relaunch America's world hegemony.
Ironically, the ''war on terror'' provided a much-sought-after opportunity to achieve this desire. Regime change in Iraq was deemed necessary to secure a friendly base at the heart of a strategically important region.
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