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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