Arab states have launched secret moves to stop using US $$ for oil trade

[goadam1]

Re: Arab states have launched secret moves to stop using US $$ for oil trade

This feels just like that fake Treasury Bond scam.

Well it's either sucker propaganda or the beginning of a crack-up boom. Or both.

Having cash makes me nervous, having commodity etfs makes me nervous, having long bonds makes me nervous.

[cobben]

Re: Arab states have launched secret moves to stop using US $$ for oil trade

"Well it's either sucker propaganda or the beginning of a crack-up boom. Or both."

Fools rush in where wise men fear to tread.

Before the need to replace the $USD in international trade was an open secret which was conveniently ignored, now it is written on the wall for everyone to see, not only that but force-fed to the masses through the media to be sure they get the point.
So, what will all the fools do once they have gotten it?

[D-Mack]

Re: Arab states have launched secret moves to stop using US $$ for oil trade

I remember hearing this story, and I wouldn't be surprised to hear of some behind the scenes stuff by Russia & China.

In kingdom, Saudi prince's coup 'fails'
Sun, 02 Aug 2009 17:03:54 GMT
Font size :
Saudi Prince Bandar bin Sultan

Saudi Prince Bandar bin Sultan, the kingdom's former ambassador to the United States, is reportedly under house arrest over a conspiracy against the monarch.

Saad al-Faqih, head of the opposition group Islamic Reform Movement, told Arab-language TV al-Alam that Prince Bandar has been disappeared and the media has published no word from the ex-diplomat's whereabouts since nearly three months ago.

According to al-Faqih, the prince first disappeared in Britain but he returned to the kingdom shortly afterwards.

He added that after Saudi officials discovered that he had provoked 200 agents working for the Saudi security service to stage a coup against King Abdullah, he was put under house arrest.

...

http://www.presstv.ir/detail.aspx?id...onid=351020205

[don]

Re: Arab states have launched secret moves to stop using US $$ for oil trade

Is the Sky Really Falling?

Dollar Hysteria

By MIKE WHITNEY
Robert Fisk lit the fuse with his hyperventilating narrative which appears in Tuesday's UK Independent which went viral overnight spreading to every musty corner of the Internet and sending gold skyrocketing to $1,026 per oz. Now every doomsday website in cyber-world has headlined Fisk's "shocker" and the blogs are clogged with the frenzied commentary of bunker-dwelling survivalists and goldbugs who're certain that the world as we know it is about to end.

From Fisk's article:

"In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

“Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

“The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. ‘Bilateral quarrels and clashes are unavoidable,’ he told the Asia and Africa Review. ‘We cannot lower vigilance against hostility in the Middle East over energy interests and security.’”

"International cabal"? C'mon, Fisk, you're better than that.

Reports of the dollar's demise are greatly exaggerated. The dollar may fall, but it won't crash. And, in the short-term, it's bound to strengthen as the equities market reenters the earth's gravitational field after a 6 month-long ride through outer-space. The relationship between falling stocks and a stronger buck is well established and, when the market corrects, the dollar will bounce back once again. Bet on it. So why all this bilge about Middle Eastern men huddled in "secret meetings" stroking their beards while plotting against the empire?

Isn't that the gist of Fisk's article?

Yes, the dollar will fall, (eventually) but not for the reasons that most people think. It's true that the surge in deficit spending has foreign dollar-holders worried. But they're more concerned about the Fed's quantitative easing (QE) program which adds to the money supply by purchasing mortgage-backed securities and US Treasuries. Bernanke is simply printing money and pouring it into the financial system to keep rigor mortis from setting in. Naturally, the Fed has had to quantify exactly how much money it intends to "create from thin air" to placate its creditors. And, it has. (The program is scheduled to end by the beginning of 2010) That said, China and Japan are still buying US Treasuries, which indicates they have not yet "jumped ship".

The real reason the dollar will lose its role as the world's reserve currency is because US markets, which until recently provided up to 25 percent of global demand, are in sharp decline. Export-dependent nations--like Japan, China, Germany, South Korea--already see the handwriting on the wall. US consumers are buried under a mountain of debt, which means that their spending-spree won't resume anytime soon. On top of that, unemployment is soaring, personal wealth is falling, savings are rising, and Washington's anti-labor bias assures that wages will continue to stagnate for the foreseeable future. Thus, the American middle class will no longer be the driving force behind global consumption/demand that it was before the crisis. Once consumers are less able to buy new Toyota Prius's or load up on the latest China-made widgets at Walmart, there will be less incentive for foreign governments and central banks to stockpile greenbacks or trade exclusively in dollars.

Here's a clip from the Globe and Mail cited on Washington's Blog:

"A UBS Investment Research report says that while it would be wrong to write off the U.S. dollar as the global reserve currency, its roughly 90-year iron grip on that position is loosening. ‘The use of the U.S. dollar as an international reserve currency is in decline,’ said UBS economist Paul Donovan.
“’The market share of the dollar in international transactions is likely to decline over the coming months and years, but only persistent policy error – or considerable fiscal strain – is likely to cause the dollar to lose reserve currency status entirely.’
"The UBS report maintains that the gradual slide of the U.S. dollar is being driven not by the world’s central banks, but by the private sector, as individual companies increasingly abandon the greenback as their international currency of choice.
“’The private sector’s use of reserves is more important than official, central bank reserves – anything up to 20 times the significance, depending on interpretation,’” Mr. Donovan said. “There is evidence that the move away from the dollar as a private-sector reserve currency has been accelerating since 2000.’”

As private industry veers away from the dollar, governments, investors and central banks will follow. The soft tyranny of dollar dominance will erode and parity between currencies and governments will grow. This will be create better opportunities for consensus on issues of mutual interest. One nation will no longer be able to dictate international policy.

So-called "dollar hegemony" has added greatly to the gross imbalance of power in the world today. It has put global decision-making in the hands of a handful of Washington warlords whose narrow vision never extends beyond the material interests of themselves and their constituents. As the dollar weakens and consumer demand declines, the United States will be forced to curtail its wars and adjust its behavior to conform to international standards. Either that, or be banished into the political wilderness.
So, what exactly is the downside?

Superpower status rests on the flimsy foundation of the dollar, and the dollar is beginning to crack. Fisk is right to this extent; big changes are on the way. Only not just yet.

Mike Whitney lives in Washington state. He can be reached at

fergiewghitney@msn.com

http://www.counterpunch.org/whitney10062009.html

[goadam1]

Re: Arab states have launched secret moves to stop using US $$ for oil trade

"Well it's either sucker propaganda or the beginning of a crack-up boom. Or both."

Fools rush in where wise men fear to tread.

Before the need to replace the $USD in international trade was an open secret which was conveniently ignored, now it is written on the wall for everyone to see, not only that but force-fed to the masses through the media to be sure they get the point.
So, what will all the fools do once they have gotten it?

Something feels wrong but I can't figure it out. Is it hard to see the obvious. The story is being pushed by haters with agendas. Plus pump and dump comes to mind. But a good ituliper would say this is part of the process. Plus the coming inflation will have to be pinned on foreigners.

[orion]

Re: Arab states have launched secret moves to stop using US $$ for oil trade

Is the Sky Really Falling?

Dollar Hysteria


Yes, the dollar will fall, (eventually) but not for the reasons that most people think.

The real reason the dollar will lose its role as the world's reserve currency is because US markets, which until recently provided up to 25 percent of global demand, are in sharp decline. Export-dependent nations--like Japan, China, Germany, South Korea--already see the handwriting on the wall. US consumers are buried under a mountain of debt, which means that their spending-spree won't resume anytime soon.

Don, Thanks for the great counter post. I agree with this concept. I have listened to Richard Karn at Emerging Trends Report (http://www.emergingtrendsreport.com/)

He frequently says "all currencies are derivatives of the dollar". This seems true to me especially when you look at how many countries; 1) are using fiat money, and 2) want to export to US more than they want cheap imports so they manipulate their money lower than dollar.

These countries will try to follow the dollar down but when they see that they cannot maintain wages in their country doing so and that the US consumer is on vacation, they will find new markets and worry about other currencies. This will probably be a slow process. Fitch calls for a 2018 abandonment of the dollar, which might work out but not as a preplanned organized event just based on oil.

[allenjs]

Re: Arab states have launched secret moves to stop using US $$ for oil trade

I just don't think any of them expected to be peppered in the chest by bird shot coming from Wall Street...

Analogies like these are why I love iTulip :-)

[goadam1]

Re: Arab states have launched secret moves to stop using US $$ for oil trade

You got on some kind of party politic tangent. I meant that the source and timing of this information is suspect.

I would agree that some signs of America's decline are there. I don't think the differences in parties is the problem.

Could it be international actors sensing weakness. US haters coming after a weak administration. Russia defeats missile defense. China gets a Dali Lama blow off. Rio gets the olympics. Iran gets the centrifuges. Venezuela gets nuclear cooperation and a ton of arms from Russia. Britain gets ignored. The US cedes control of the internet. Now you have the UN talking about the decline of the dollar. Every blog and MSM outlet is working against America and the democrats are apologizing to the world for everything.

The Democrats will not be able to win elections in 2010 by saying it is all Bushes fault. I was traveling through NJ and saw Corzine posters all over which have a picture of Bush and Christie the Republican challenger which said "Same Party Same Results" is this the best the Democrats could do, in a dead even race, where they have the deep pocketed former Goldman Sacks incumbent. If Corzine loses in one of only two Gubernatorial elections this year, in a strong Blue State, look for the Republicans to be able to kill all Obama initiatives untill the mid-terms. No Democrat is going to risk getting voted out supporting unpopular legislation. Obama could be a political lame duck by Christmas till Nov 2010 and then what we have seen over the past six months internationally will seem like a walk in the park.

[touchring]

Re: Arab states have launched secret moves to stop using US $$ for oil trade

I posted in August that the dollar might be under threat.

http://www.itulip.com/forums/showthread.php?t=11559

Now, I'm even more convinced that the dollar's finished. The dollar will devalue unless something drastic is done to shore up the confidence in the dollar in the next 3-6 months.

When it comes, it will come quick. Everyone will dump the dollar when that happens. Even the American consumer will be exchanging whatever cash they have for the Euro or for gold.

[mooncliff]

Re: Arab states have launched secret moves to stop using US $$ for oil trade

My thoughts exactly. You (Mega) have so many "RED ALERT" threads that it's hard to differentiate the good from the bad. You have no one to blame but yourself.

I always read Mega's posts... because they are so funny.

[goadam1]

Re: Arab states have launched secret moves to stop using US $$ for oil trade

I posted in August that the dollar might be under threat.

http://www.itulip.com/forums/showthread.php?t=11559

Now, I'm even more convinced that the dollar's finished. The dollar will devalue unless something drastic is done to shore up the confidence in the dollar in the next 3-6 months.

When it comes, it will come quick. Everyone will dump the dollar when that happens. Even the American consumer will be exchanging whatever cash they have for the Euro or for gold.

You mean ka-poom.

[cjppjc]

Re: Arab states have launched secret moves to stop using US $$ for oil trade

This feels just like that fake Treasury Bond scam.

I was going to say that.:mad:

[Raz]

Re: Arab states have launched secret moves to stop using US $$ for oil trade

I agree that the party does not matter. I am just reading the signs. If you are looking for a time when an country or group of countries will try and shift the advantage further to themselves at the expense of the dollar it would be at a time of political weakness for the President and the current leadership. The signs I pointed out were not politically motivated they are evidence that various actors are chipping away at Americas global dominance to their advantage. In corporate terms they are making a grab for market share while one of their competitors is having finacial problems. I think if Corzine loses Obama loses more clout and some other actor might decide to see how much more they can take. It might be something to watch. Of course the opposite could happen and it kills heathcare and other big spending initiatives as no one in congress will want to take bold action in that political climate and the market sensing gridlock and less big budget promises bids the dollar up. Just for the record I am not making a political statement. I am just tying to read the tea leaves like everyone else. I have a bit of a blunt style and it may not translate well sometimes.

I understood exactly what you were trying to say - and I agree with you.

[goadam1]

Re: Arab states have launched secret moves to stop using US $$ for oil trade

I agree that the party does not matter. I am just reading the signs. If you are looking for a time when an country or group of countries will try and shift the advantage further to themselves at the expense of the dollar it would be at a time of political weakness for the President and the current leadership. The signs I pointed out were not politically motivated they are evidence that various actors are chipping away at Americas global dominance to their advantage. In corporate terms they are making a grab for market share while one of their competitors is having finacial problems. I think if Corzine loses Obama loses more clout and some other actor might decide to see how much more they can take. It might be something to watch. Of course the opposite could happen and it kills heathcare and other big spending initiatives as no one in congress will want to take bold action in that political climate and the market sensing gridlock and less big budget promises bids the dollar up. Just for the record I am not making a political statement. I am just tying to read the tea leaves like everyone else. I have a bit of a blunt style and it may not translate well sometimes.

Fair enough. I just find partisan stuff on this board a bad fight. I won't predict anything past xmas.

[iyamwutiam]

Re: Arab states have launched secret moves to stop using US $$ for oil trade

I think that the US benefits tremendously from Dollar Hegemony in commodity trades -most particularly oil. With the world afloat in dollars -depreciation of the dollar was 'planned' for quite some time-probably since the 1970s when the US was basically broke anyway.

It was and is genius to rule via a FIAT currency you create out of thin air-but it could only be done -after- creating a 'need' to stockpile US dollars in foreign central banks to purchase things of TRUE value -commodities.

Oil is but one commodity -but it is the signal for the ultimate blow. The de-linking -will cause a tremendous crash in the value of the dollar if done rapidly. The US knows full well that depreciation of the currency must occur as the very minimum concession to creditor nations.