Thursday, December 17, 2009

Gulf States Announce Launch of New Currency, with Phase I Beginning NEXT YEAR; Direct Threat to Dollar's Hegemony

The London Telegraph is reporting that the Gulf Petro States have agreed to launch a single currency which will be modelled after the Euro. Saudi Arabia, Kuwait and Quatar will launch the first phase next year by creating a Gulf Monetary Council that will evolve into an organization similar to the European Central Bank. According to the Telegraph:
The Gulf monetary union pact has come into effect,” said Kuwait’s finance minister, Mustafa al-Shamali, speaking at a Gulf Co-operation Council (GCC) summit in Kuwait. The move will give the hyper-rich club of oil exporters a petro-currency of their own, greatly increasing their influence in the global exchange and capital markets and potentially displacing the US dollar as the pricing currency for oil contracts. Between them they amount to regional superpower with a GDP of $1.2 trillion (£739bn), some 40pc of the world’s proven oil reserves, and financial clout equal to that of China.
The Gulf states remain divided over the wisdom of anchoring their economies to the US dollar. The Gulf currency – dubbed “Gulfo” – is likely to track a global exchange basket and may ultimately float as a regional reserve currency in its own right. “The US dollar has failed. We need to delink,” said Nahed Taher, chief executive of Bahrain’s Gulf One Investment Bank.
Our readers will recall that it was just a few months ago in October, that Robert Fisk of the Independent had first revealed that the Persian Gulf countries were planning to stop pricing oil in dollars by 2018 and start using a basket of currencies. At that time the news was vehemently denied by Saudi Arabia and Kuwait officials. Well so much for that, because just two months hence they have announced the very same plans to the world. The days of the U.S. world supremacy through the dollar are fast drawing to a close.

No comments: