By Syed Akbar Ali
A friend called and said 'better check the US Dollar, maybe the end is nigh'. Well if anyone has noticed the US Dollar has dipped below RM3.50. I just checked at 5:10 pm today and it was at RM3.45. That is a little too down in just a few days.
Here are some scary denials recounted in Bloomberg today (truncated):
Oct. 6 (Bloomberg) -- Saudi Arabia hasn’t held talks with China and other countries on dropping the dollar as the currency for pricing oil, Saudi Central Bank Governor Muhammad al-Jasser said, denying a report in the U.K.’s Independent newspaper.. .The dollar pared losses after his remarks.
The London-based newspaper said today that Gulf oil producers and nations including China, Japan, Russia and Brazil had held secret talks on a nine-year plan to phase out the dollar in oil trade, and move toward pricing the fuel in a basket of currencies plus gold.
China and Russia in June agreed to expand use of each other’s currencies in trade to reduce dependence on the dollar, and those countries plus Brazil and India -- the so-called BRIC nations -- have discussed buying each other’s bonds and swapping currencies. The dollar fell to a one-year low of $1.4844 per euro on Sept. 23.
Iran and Venezuela raised the proposal at a meeting of the Organization of Petroleum Exporting Countries in November 2007.
Saudi Arabia and three other Gulf oil-producers are planning to create a shared currency that may allow them more freedom from U.S. monetary policy.
Well if the Saudis are really into conspiring against the Americans it may be their end. The Americans will toast the country before any Saudi can pull the plug on the US Dollar.
To save the Dollar, Obama may even make Osama "president" of Saudi Arabia - in the wider interests of the freedom loving and democractic Saudi peoples and also in the narrower interests of the United States. Anything is possible over there.
I did make a prediction once that Saudi Arabia will be split in two one day.
The oil bearing sands in the west of the country will be "secured" by "peaceloving" American "peacekeepers" while the eastern Hijaz where all the religious sites are will be up for grabs between the "freedom loving" and "democractic" Saudi tribes.
Not possible? Well Saddam not only suggested but did try to sell oil in non US Dollar trade. Look what happened to him. Whoever thought that Iraq would be carved up almost into non existence like today? Only some could read the writing in the sand. And keep an eye on Pakistan. It is going the way of a "personal" pizza - cut into five pieces (Sind, Baluchistan, Punjab, North West Frontier and one more).
The end of the Dollar is indeed nigh. Why the need for expensive dollars to buy clean underwear when it is the "sweat shops" in China who are making them for you in Yuan? I want to see if the Dollar goes below RM3.40. Lama tak shopping di US. The only place I can get really comfortable XXL shirts (now likely Made in China).
7 comments:
So, Nostradamus Chang's prediction is getting closer?
A GOOD MAN DOES NOTHING.
Yes.This is certainly bad news for gulf states, especially for the Saud family of Saudi Arabia. Since the incorporation of Aramco on arab soil americans have managed to entrench their influence over the arabs in ways that we cannot imagine just to ensure that the "oil keeps flowing" to American industries. Their relationship is symbiotic. Malaysians may claim that they know much about Mecca, but I dare say that some Americans would know a lot more about Saudi Arabia and how things work over there.
I am sure that the Americans will stop at nothing to preserve their realm of influence over the gulf states at any cost, including the creation of even more evil demons than osama.
Buy gold to hedge against the US Dollar.
Syed Akbar Ali can tell you where to get a good deal :)
The Gulf Arab countries are staunch allies of the USA and dependent on the US for military protection in their volatile region... It is far more likely that such rumors, if they are true, are more a question of those policy makers mulling over policy options.
Funny part is the story assumes Arabs as a unifed force but we all know how unified Arabs are! They hate each other's gut.
They have been been trying to create a Euro-style unified currency in the Gulf region but to no avail.
But th etiming of announcement is superb coz IMF meeting will be held in Turkey and the main subject under discussion will be viable alternatives for the trillions in dollar reserves held by the Gulf States and BRIC nations.
So maybe there is a stroy behind the headlines.
bindi
Anon 8:12. Re Malthus Chang, I believe there is a definition of people in his line that goes something like this: They'll tell you tomorrow why what they forecast yesterday, didn't happen today.
Eventually, yes, the US dollar will decline, western economies will collapse, the mighty Unc Sam may have to beg, borrow and steal to survive, and London may fade from memory. Japan has already been eclipsed by China.
Just like all civilizations before them. They have their ebbs and their tides, the waxings and the wanings.
Then our soothsayers and such like will pop up and say Didnja I tell you. But they forget, like Keynes said, that in the long run we are all dead. So it doesn't matter.
But I couldn't agree more with bro Syed. Oil bearing Saudi Arabia will break up. Just like Saddam's Iraq, Yahya Khan's Pakistan, and Nehru/Jinnahs Mother India. (In contrast, we are not doing too badly in that department; we expanded from 11 states to 14 then dropped to 13; although tiny Brunei eluded us, I wonder why?)
So when Saudia goes the way of Iraq, bakal Hajis (and all those who aim to cleanse themselves from the deadly sins - mainly corruption and looting the national wealth) may have to route their Haj and Umrah applications through Washington and Tel Aviv.
That's life.
US dollar will drop, slowly, but won't crash boom bang. World major economic powers simply won't allow that, for whatever reason. China has billions of US debt and reserves. Almost every country's central bank have US dollar reserves. All big banks and oil companies own something at wall street; eitheir stocks or bonds or whatever, either directly or indirectly.
Alternatives to US currency as form of payment is viable. But will it be workable? Only if oil producing nations collectively say so. But then, lets say gulf nations accept cinese yuan as payment. What can yuan do for them? Buy more toys from china, may be. Euro? But the arabs buy anything american, from cars to technology to defence stuffs. Will the americans accept the euro as payment?
My great grand-uncle was a trader in Perak in the early 1900s. A few years ago his grandson found a can full of spanish dollar coins, about 20 pieces, buried somewhere in the house. Spain, at that time, was no longer an economic power. Surely, some europeans traders must have conned locals by dumping the spanish currency in this part of the world then. I can't foresee anyone would dump the USD now.
Tq,
Kampungmali
Anon 8:12 Mathias is not a fruitcake. Oracle? Lets wait a little bit more and see. He has said many things.
devilmaycare : spot on
PurpleHaze : Yes I sell the stuff. But you have to find your own way here. Our ads are in Harian Metro every Friday.
bindi : I think the Chinese have a shorter schedule (2 years) to unwind their positions.
Bo : Tel Aviv? Ouch!!
KampungMali : Yes I agree. That would be more logical. But do not discount 'earthquakes' and 'sudden death' syndromes.
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