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It’s the biggest mystery in global finance right now: Who conducted a sneak attack on the U.S. dollar this week?
It began with a thinly sourced but highly explosive report Monday in a British newspaper: Arab oil sheiks are conspiring with the Russians and Chinese to quit using the dollar to set the value of oil trades — a direct threat to the global supremacy of the greenback.
Is it true? Everyone from the head of the Saudi central bank to U.S. officials scrambled to undercut the story, but no matter.
With the U.S. economy on the ropes and America by far the world’s biggest debt
It’s the biggest mystery in global finance right now: Who conducted a sneak attack on the U.S. dollar this week? It began with a thinly sourced but highly explosive report Monday in a British newspaper:
The plan to de-dollarise the oil market, discussed both in public and in secret for at least two years and widely denied yesterday by the usual suspects – Saudi Arabia being, as expected, the first among them – reflects a growing resentment in the Middle East, Europe and in China at America's decades-long political as well as economic world dominance.
Nowhere has this more symbolic importance than in the Middle East, where the United Arab Emirates alone holds $900bn (£566bn) of dollar reserves and where Saudi Arabia has been quietly co-ordinating its defence, armaments and oil policies with the Russians since 2007.
Such massive financial movements, encouraged by the de-dollarisation of oil, will have enormous political effects in the Middle East, especially if economic superpower rivalry between America and China comes to dominate the Arab world.
Will American economic support for Israel remain as loyal in nine years' time if China and the Arabs are setting the pace in global financial markets?
Originally posted by radio_for_peace
sneak attack on us dollar? what? Why is it a "sneak attack" for other countries to want to use their own money to buy their own oil?
That's the problem with ATS. Even though a lot of ATS know the atrocities that the US has done, they still stand by the people who did them.
October 09,2009 "AlterNet" -- You may remember that among the million and one reasons why we may have "really" gone into Iraq was this one, embraced mostly by alleged conspiracy theorists and silly leftists who thought that the invasion might have something to do with oil and the dollar:
UNITED NATIONS (Reuters) -- A U.N. panel on Monday approved Iraq's plan to receive oil-export payments in Europe's single currency after Baghdad decided to move the start date back a week.
Members of the Security Council's Iraqi sanctions committee said the panel's chairman, Dutch Ambassador Peter van Walsum, would inform U.N. officials on Tuesday of the decision to allow Iraq to receive payments in euros, rather than dollars.
Today, there is a lot of chatter about this:
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.
Nobody knows for sure that this is happening, but if it is, it's a profound change, and one that may have simply been put off by our little six year adventure in the middle east.
Ian Welsh unpacks what this would mean for all of us over at C&L. Shorter Ian: for a lot of reasons, "it will hurt."