Late last month Iran announced that its foreign currency reserves would henceforth be held in euros rather than the dollar.
Now, 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 dealing 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 plans, confirmed to the Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help explain the sudden rise in gold prices, but it also augers an extraordinary transition from dollar markets within nine years.
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.
This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil - yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. An indiction of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.
Brazil has shown interest in collaborating in non-dollar payment, along with India. China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.
Chinese financial sources believe President Obama is too busy fixing the US economy to concentrate on the implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.
Remember I mentioned Iran changing to the euros at the beginning of this post? Bankers remember what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months later after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.
Another interesting article on this subject can be read here and is entitled 'The end of the dollar spells the rise of a new order.'
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6 comments:
Currently taking a break from attempting to understand the comments following this story in the Independent - but it doesn't look good for future war-mongering over energy reserves, especially in Iran whatever the dominant oil-currency.
Many of the comments (I think they're USA based) disagree that it's the end of the New World Order and imply that it's all part of the NWO grand plan. I don't know which part of Lincoln's attributed "You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all the people all of the time" fits?
Does that fellow on Forvik have any plots left for a few of his Guldes as the gold value appears to be soaring right now?
China is interested in this for everal reasons - the end of US financial hegemony strategically, and using it as a stick to assert the importance of a stong dollar - don't forget China is now the US's biggest debtor, with over $1tr in government debt. (Not to mention instutional debt). The Chinese are pissed off with the weakening dollar diminishing their investment. (Which, not coincidently, makes Chinese exports more expensive).
I haven't been following it in the Independent Clarinda as I've a friend in Australia who is keenly following this and said the report I extracted this from was reasonably accurate and detailed.
Gold price has been increasing since Gordon sold ours. Funny that.
Auch I'm not going to any island, I'll stick it out here as long as I can afford enough Tio Pepe which has increased by around 25% in price and alcohol unit pricing hasn't even been debated in the SP yet.
Aye BoT, that seems to be the situation. You can't blame them for getting miffed though can you?
To be honest I doubt it will come to a war, Obama can't/wont for political reasons and the UK can't because we don't have anyone left to send.
That seems to be the opinion of many at the moment QM but the main reason I hear most is because the US and her poodle the UK are broke.
I'm sure we all know the UK is broke. I've a wee graph coming up later on just to emphasis it.
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