There Goes the Dollar

[Rohirrim]

Get ready, cause here it comes.

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 plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.



Read more at: http://www.huffingtonpost.com/2009/1..._n_310826.html

[ak1971]

Oil states say no talks on replacing dlr

By Simon Rabinotvitch and Wayne Cole
ISTANBUL/SYDNEY (Reuters) - Big oil producing nations denied on Tuesday a newspaper report that Gulf Arab states were in secret talks with Russia, China, Japan and France to replace the U.S. dollar with a basket of currencies in trading oil.
The U.S. dollar eased in response to the report, which was written by The Independent's Middle East correspondent Robert Fisk and cited unidentified sources in Gulf Arab states and Chinese banking sources in Hong Kong.
It said the proposal was for trade in crude oil to move over nine years to a basket of currencies including the Japanese yen, the Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, which includes Saudi Arabia and Kuwait.
But top officials of Saudia Arabia and Russia, speaking on the sidelines of International Monetary Fund meetings in Istanbul, denied there were such talks.

http://uk.biz.yahoo.com/06102009/325...acing-dlr.html

[TailgateNut]

Originally Posted by Rohirrim

Get ready, cause here it comes.

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 plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.



Read more at: http://www.huffingtonpost.com/2009/1..._n_310826.html

Not so secret, secret meetings

[Smiling Assassin27]

Anybody read teh British report? Verbatim:

“Eventually there will be a move to non-dollar commodity contracts, and it may be the next big risk for the dollar,” Ben Simpfendorfer, chief China economist for Royal Bank of Scotland, told Bloomberg. “At the same time, I don’t want to overplay the importance of the story. There’s no credible sources there.”

God forbid facts should get in the way of a scoop, eh, Roh?

[baja]

Originally Posted by Rohirrim

Get ready, cause here it comes.

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 plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.



Read more at: http://www.huffingtonpost.com/2009/1..._n_310826.html

keep in mind I am selling yurts with a plot of land in rural Baja.

[Meck77]

www.yurtandland.com is available

Get your yurt and dirt in baja!

Damn I'm good.

[Bob]

Originally Posted by Rohirrim

Get ready, cause here it comes.

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 plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.



Read more at: http://www.huffingtonpost.com/2009/1..._n_310826.html

These conversations have been happening for allong time, most of which will continue to be private, as so many of their investments are still invested in dollars, but China for example has increased thier gold supply by over 70% over the past year -- based on how much we have been spending, and in fairness how mcuh we also spent under Bush, they would be insane not to diversify their investments.

[Rohirrim]

Originally Posted by Smiling Assassin27

Anybody read teh British report? Verbatim:



God forbid facts should get in the way of a scoop, eh, Roh?

I don't know. It's about as valid as your daily Obama attack ritual.

Frankly, when it comes to media, I don't know who to believe anymore. If the Arab states were caught out moving in that direction, would they admit it?

[loborugger]

Originally Posted by Smiling Assassin27

Anybody read teh British report? Verbatim:



God forbid facts should get in the way of a scoop, eh, Roh?

Well, whether you buy the fact that this is a valid story or not, the fact of the matter is that these nations do want to replace the dollar. They do want to get away from our currency as the de facto reserve for the globe. The BRIC nations want this. The UN wants this. Medvedev appeared on TV holding a coin meant to be a form of global currency.

Whether this alleged meeting took place or not, the dollar is in trouble in a way that it has never been before. Its artificially bouyed way too high due to its status as the international currency.

I dont cheer for the destruction of the dollar by any means. However, the dollar has a lot entities gunning for it. It is backed by nothing, is generated in a country with an astronomical debt that is cranking dollars as fast as they can be printed, and represents a nation that now makes/creates/builds almost nothing. I dont see how the dollar can hold on much longer.

And when the dollar is reduced to just another form of nationally issued currency like the peso, yuan, etc, it will crash.

[~Crash~]

Originally Posted by loborugger

Well, whether you buy the fact that this is a valid story or not, the fact of the matter is that these nations do want to replace the dollar. They do want to get away from our currency as the de facto reserve for the globe. The BRIC nations want this. The UN wants this. Medvedev appeared on TV holding a coin meant to be a form of global currency.

Whether this alleged meeting took place or not, the dollar is in trouble in a way that it has never been before. Its artificially bouyed way too high due to its status as the international currency.

I dont cheer for the destruction of the dollar by any means. However, the dollar has a lot entities gunning for it. It is backed by nothing, is generated in a country with an astronomical debt that is cranking dollars as fast as they can be printed, and represents a nation that now makes/creates/builds almost nothing. I dont see how the dollar can hold on much longer.

And when the dollar is reduced to just another form of nationally issued currency like the peso, yuan, etc, it will crash.

that coin you are talking about has been around for some time nice try

[Bronx33]

http://www.forbes.com/feeds/reuters/...-UPDATE-6.html

[baja]

Gold closes' at $1,034

[Rohirrim]

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

I'm not surprised these countries have denied this revelation of their little secret meetings. What do you expect them to do, look the U.S. in the eye and admit it?

[ak1971]

Originally Posted by baja

Gold closes' at $1,034

wasnt it supposed to be at $2000 by now?

[L.A. BRONCOS FAN]

Originally Posted by Rohirrim

I don't know. It's about as valid as your daily Obama attack ritual.

The idea of SA impugning someone else's credibility is hilarious indeed.

8 years of defending a party and president who took lying and bullsh*tting to a whole new level.

[baja]

Originally Posted by ak1971

wasnt it supposed to be at $2000 by now?

End of the year. If it goes to $1200 than it will be a run away and who knows where it will stop.

[ak1971]

Originally Posted by baja

End of the year. If it goes to $1200 than it will be a run away and who knows where it will stop.

no way its at $2K by the end of the year..In fact I would put money on it we see a pull back into the low $900's soon.

[baja]

Originally Posted by ak1971

no way its at $2K by the end of the year..In fact I would put money on it we see a pull back into the low $900's soon.

I agree a pull back is possible if the free world does not trash the dollar by going of the dollar as the trading currency for crude oil but sooner or later gold will surge to unheard of levels because the dollar is a fraud.

[ak1971]

Originally Posted by baja

I agree a pull back is possible if the free world does not trash the dollar by going of the dollar as the trading currency for crude oil but sooner or later gold will surge to unheard of levels because the dollar is a fraud.

do you party with Nouriel Roubini too?

[baja]

No but I do advise him.

[mhgaffney]

Check out Mike Whitney's response to Fisk, posted today at www.counterpunch.org

October 6, 2009

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

[ak1971]

Originally Posted by mhgaffney

Check out Mike Whitney's response to Fisk, posted today at www.counterpunch.org

October 6, 2009

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

or to sum it up..the jews did it

[Bob]

Originally Posted by ak1971

no way its at $2K by the end of the year..In fact I would put money on it we see a pull back into the low $900's soon.

Eventually it will get to $2000.00 -- but it is impossible to know when the dollar will crash, it might "stay strong" for another 8 years (I doubt it) but the foundation, and the root cause of folks concerns has not changed, and just about everything that has been done lately has undermined the strength of the dollar.

It would take heroic actions (by government standards) to fix the trend. When it does crash, how hard will it fall? -- that depends on how long we put it off by injecting more money into the green bubble. Is there anyone here who actually believes that the government will not do something to make the problem even worse when we start to see significant inflation? Besides pitting the American people against each other (to save their own butts) I'll bet you anything they spend more money "attempting to help" those in dire need and make the acceleration even faster. As "we have no choice" then we will get a new currency -- but the only way we will be allowed to do that will be to give up certain concessions and Liberties to the international community -- anyone want to bet now that it will not include flushing the 2nd amendment? Those that hold debt in teh international community -- many of whom hate us, will use this opportunty to stick it to us.

Sometime after that, we will crash that new dollar too, which will justify a "truely progressive international solution," all we have to do it put out our wrist for our implant.

[baja]

Originally Posted by Bob

Eventually it will get to $2000.00 -- but it is impossible to know when the dollar will crash, it might "stay strong" for another 8 years (I doubt it) but the foundation, and the root cause of folks concerns has not changed, and just about everything that has been done lately has undermined the strength of the dollar.

It would take heroic actions (by government standards) to fix the trend. When it does crash, how hard will it fall? -- that depends on how long we put it off by injecting more money into the green bubble. Is there anyone here who actually believes that the government will not do something to make the problem even worse when we start to see significant inflation? Besides pitting the American people against each other (to save their own butts) I'll bet you anything they spend more money "attempting to help" those in dire need and make the acceleration even faster. As "we have no choice" then we will get a new currency -- but the only way we will be allowed to do that will be to give up certain concessions and Liberties to the international community -- anyone want to bet now that it will not include flushing the 2nd amendment? Those that hold debt in teh international community -- many of whom hate us, will use this opportunty to stick it to us.

Sometime after that, we will crash that new dollar too, which will justify a "truely progressive international solution," all we have to do it put out our wrist for our implant.

Yurts for sale with water solar power and a 2 acre garden. PM me boys.

[Bob]

Originally Posted by baja

Yurts for sale with water solar power and a 2 acre garden. PM me boys.

It is amazing to me how half of these guys will feel blind sided when this does happen, and how most will see this issue in a Dem and Repub context only.