Stretching back to before the Hundred Year’s War there has been a history of rivalry and conflict between England and France. Even the entente cordiale failed to stop the fractious nature of the relationship.

But we shouldn’t let petty rivalries distract us from the big picture; we have a lot to learn from our garlic-loving chums across La Manche.

We really should listen to what they have to say. For one, the country has embraced nuclear technology and it is completely independent of Middle Eastern oil. In fact, it gets almost 80% of its electricity from nuclear power.

The country will be able to sail through the upcoming energy crunch with nothing more than a slight shrug of its shoulders. It will not be beholden to the gas oligarchs of Russia… it will not have to go cap in hand to the Wahibbist Saudi Arabian government… and it won’t have to spend millions and millions trying to sort its energy problems out.

This week, new French President Nicolas Sarkozy said something else that was very wise. I urge you to listen.

He was commenting on a subject that I have been touching on in this column from time to time. What made it even better was that he said it to the US Congress; a forum where the French have been extensively bashed over the past few years.

I’m sure you recall the vilification of France after she failed to support the invasion of Iraq. Freedom fries all around? Anyone for a cheese eating surrender monkey..? For years France has been the bête noire of US neo-cons. How foolish they look now.

In the words of the excellent US comedian and thinking-man’s Republican Bill Maher:

“What can you say about a country that was too stupid to get on board with our wonderfully-conceived and brilliantly-executed war in Iraq…”

(I have put the link to the Youtube video of Maher’s comments on France at the end of this piece. I suggest you watch it. It is utterly brilliant stuff)

Sarkozy is right

When Iraq started pricing its oil in currencies other than the dollar it was not long before the US neocons ordered an invasion. Iran is selling around 85% of its oil in euro and yen, so it is likely that Iran will be invaded next to maintain US dollar hegemony.

It is possible that World War III will be fought in the dustbowls of the Middle East or by suicide bombers on the transport systems of the western world, but I think it will be fought out in the markets, particularly the currency markets. It will be a full-scale economic war.

Sarkozy told Congress this week that the US risked triggering economic war if it attempted to devalue its way out of trouble by allowing a relentless slide in the dollar. The Telegraph described the remarks as “stunning”. I believe that they are anything but stunning. They are intelligent and visionary.

It is not just dodgy Middle Eastern governments that will get involved either. Powerful hedge funds are likely to follow the money – betting against the dollar and driving it even lower. These sort of things become self-fulfilling prophecies.

Should Iran eventually manage to get its International Oil Bourse off the ground then this will be a significant victory against the US in the economic World War III. The plan is to create a petrobourse for petroleum, petrochemicals and gas in various non-dollar currencies, primarily the euro.

This would establish a euro-based pricing mechanism for oil trading. As of today, this bourse has not been established, although there have been a number of false-start dates announced.

Oil purchasers do not appear to be too concerned about non-dollar denominated oil sales. Unsurprisingly, Venezuela has voiced its support for Iran’s oil bourse, but so have oil-consuming giants India and China.

We have an interesting few years ahead. It’s just a shame that we don’t all think like the French a little more, isn’t it?

So here’s today’s homework from Garry Writes… Watch Bill Maher commenting on America’s attitude to France. It’s very, very funny – and oh so true: Bill Maher on France P.S. If you enjoyed this article then sign up for Smart Commodities UK. It’s dedicated to searching out the investment trends that could provide our biggest profit opportunities for the next decade…

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