“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.
Saudi Arabia, Kuwait, Bahrain, and Qatar are to launch the first phase next year, creating a Gulf Monetary Council that will evolve quickly into a full-fledged central bank.
The Emirates are staying out for now – irked that the bank will be located in Riyadh at the insistence of Saudi King Abdullah rather than in Abu Dhabi. They are expected join later, along with Oman.
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.
The project is inspired by Europe’s monetary union, seen as a huge success in the Arab world. But there are concerns that the region is trying to run before it can walk.
Europe took 40 years to reach the point where it felt ready to launch a currency. It began with the creation of the Iron & Steel Community in the 1950s, moving by steps towards a single market enforced by powerful Commission and European Court. The EMU timetable was fixed at the Masstricht in 1991 but it took another 11 for euro notes and coins to reach the streets.
Khalid Bin Ahmad Al Kalifa, Bahrain’s foreign minister, told the FIKR Arab Thought summit in Kuwait that the project would not work unless the Gulf countries first break down basic barriers to trade and capital flows.
At the moment, trucks sit paralysed at border posts for days awaiting entry clearance. Labour mobility between states is almost zero.
“The single currency should come last. We need to coordinate our economic policies and build up common infrastructure as a first step,” he said.
Mohammed El-Enein, chair of the energy and industry committee in Egypt’s parliament, said Europe’s example could help the Arab world achieve its half-century dream of a unified currency, but the task requires discipline. “We need exactly the same institutions as the EU has created. We need a commission, a court, and a bank,” he said.
The last currency to trade in souks from Marakesh, to Baghdad and Mecca, was the Ottomon Piaster, known as the “kurush”. It suffered chronic inflation as the silver coinage was debased.
There is a logic to an Arab currency. The region speaks one language, has the unifying creed of “Umma Wahida” or One Nation from the Koran, and has not torn itself apart in savage wars – ever – in quite the way that Europe has in living memory.
Yet hurdles are formidable even for the tight-knit group of Gulf states. While the eurozone is a club of rough equals – with Germany, France, Italy, and Spain each holding two votes on the ECB council – the Gulf currency will be dominated by Saudi Arabia. The risk is that other countries will feel like satellites. Monetary policy will inevitably be set for Riyadh’s needs.
Hans Redeker, currency chief at BNP Paraibas, said the Gulf states may have romanticised Europe’s achievement and need to move with great care to avoid making the same errors.
“The Greek crisis has exposed the weak foundations on which the euro is built. The gap in competitiveness between core Europe and the periphery has grown wider and wider. The obvious mistake was to launch EMU without a central fiscal authority and political union, as the Bundesbank warned in the 1990s,” he said.
“The euro was created for political reasons after the fall of the Berlin Wall to lock Germany irrevocably into Europe. It was not done for economic reasons,” he said.
Ben Simpfendorfer, Asia economist for RBS and an expert on the Middle East, told the FIKR conference that the rise of China had paradoxically disrupted the case for pan-Arab economic integration.
There was a natural fit ten years ago between rich oil state and low-wage manufacturers in Egypt and Syria, but cheap exports from China have forced poorer Arab states to retreat behind barriers to shelter their industries. “The rationale for a single currency has become weaker,” he said.
The GCC also agreed to create a joint military strike force – akin to the EU’s rapid reaction force – to tackle threats such as the incursion of Yemeni Shiite rebels into Saudi territory earlier this year.
This is a major breakthrough after years of deadlock on defence cooperation.
The Sunni Gulf states are deeply concerned about the great power ambitions of Shiite Iran and its quest for nuclear weapons, to the point where the theme of a possible war between Iran and a Saudi-led constellation of states has crept into the media debate.
They nevertheless repeated on Tuesday that “any military action against Iran” by Western powers would be unacceptable.
JOEY-you right.
Where are you from Euro men Hans?-From province Germany.
Where are you from Euro men George?-From province Greece.
Where are you from Euro man Benito?-From province Italy.
Where are you from American Joe?-From USA.
Easier said than done. I HOPE the rest of the world drops the dollar in lieu of some fly by night currency. Obama won't last forever (in fact Ron Paul may be President before Obama's term is up). While the world falls in new love with the "Terror-O" we can pull back the way-too-many dollars that have been loosed on the world and do what we should, burn them. With a more rectified dollar-to-value balance, domestic resource devlopment, and new trade tariffs, the dollar can be made ready for primetime again in short order. Just in time to step in for this short lived and ill advised new currency's collapse.
The downfall of these Arab nations is that they are rich on money they don't have yet. What may happen to oil years from now can bankrupt them today. A petro based Arab currency will fail quickly and miserably. The dollar may not be perfect, but we have a lot of experience with it. The wisdom of age will always trump the impatient arrogance of youth. The dollar's collapse is imminent, but its renaissance will be extraordinary. Watch and learn....
The whole world could only hold their breath, gasping for the financial turmoil they can only witness in the USA. The bankster had made US-A a slave nation in broad daylight. The parasites have essentially checked-mate USA and the whole world with their financial dominance. It is only normal that this news came up and eventually, when the whole world realised how it is dangerous to allow a single currency to dominate the world, they will not likely allow it to happen ever again. Look at how Americans are printing debt papers recklessly presently. At some point in time, they will eventually be booted out with their own self arrogance and detachment from the reality.
Steve O, to which Obama policies are you referring? He's been in office 3 days short of 11 months. No major policy in effect yet is really his. You're saying the Arabs just up and got this idea because of Obama, like it had nothing to do with Bush invading the middle east, alienating allies, canceling treaties, devaluing the dollar, promoting outsourcing the US economy, wrecking the US budget while cutting dividend taxes, nationalizing mortgage agencies (in effect taking state ownership of half the homes in America)...? Hmmm, what was I thinking???
The problem with the US dollar is the U.S. The mast production of fiat dollars removes any faith in the U.S. acting responsibly. Without responsibility, a new currency (based on a bundle of currencies) is inevitable. As the fiat US dollar drops so will the ablity to sustain the 700 + military bases around the world and the men and materials necessary to keep it afloat. At the turn of the last century "Britain ruled the waves" and the "sun never set on the British Empire". How things change.
It appears that it may be time to take the dollar down.
The greatest effect of this move will be the decrease in world demand for US dollars. Countries will no longer have to hold dollars in order to engage in transactions to trade oil.
Implications for the US are an increase in interest rates, and a further devaluation of the currency, leading to higher inflation in the US.
It is the inevitable result of the Obama Administration policies, which have undermined world confidence in the US dollar.
What people still don't understand is that there is very little precious metals physically available. The US mint stuopped delivery of Gold and Silver just last month. The Comex stopped allowing delivery of actual metal.They settle in cash or GLD shares. The head of Greenlight capital just sold all his GLD shares and bought physical as he feared they are lending out their 'held' gold. Total world production of silver is 600million oz. That means every single person in the US couldn't buy 2 ozs. actual silver if they all went out this week. We are in a shortage now! Watch when inflation really starts....
The Umayyad Caliphate's capital was Damascus so is Syria involved?
bobc, if you take a look at the 2010 World Almanac & Book of facts you will find what the US imports, amongst other things.
I suspect that you will not be so isolationist or protectionist in regards to trade.
Many countries hate the USA, but Americans are fed up with our tax dollars, and blood given to these countries, over and over again.
I say every country should use their own resources, as the US should.
The elites of this world, that try to social engineer societies have failed all...let's get rid of them first.
I do not yet foresee the end of the dollar hegemony in the world. The problem is that a proper alternative at the moment is lacking. Yes, the euro has many attributes that would help it to replace the dollar, but Europe does not have a central government or army to back up any policies. China is just not democratic enough to become a state that others would trust, besides it is way too intransparent. Japan and Britain have second-tier reserve currencies but are too small to become large players.
A joint currency in Arabia could be sensible, however it will surely not replace the dollar as the main trading currency for oil. Anyhow, oil is priced in dollars but no one is obliged to actually do the payment in US currency. Any major currency would be accepted by oil producers (euro, sterling, yen, franken) as long as it is a hard one. A new Arab currency backed by the oil reserves might play the role that the Deutsche Mark had in Europe, but no more.
Two points:
1. Since no one else will have gulfos, they'll still have to sell oil for dollars (or euros...) and require gulfos for domestic transactions (like China does with the yuan).
2. The REAL price of oil is NOT cheap. The real price includes the cost of all US foreign relations and military operations in the middle east and all points between whose sole purpose is, in effect, to subsidize the oil industry. No other industry in the world gets government support on that scale. Without that support, oil companies would have to raise their retail prices and alternative energy would become cost effective and many of today's problems with the environment, global warming, and US debt would be solved by power of the invisible hand of economics.
Arabio...Euro...Amero...
Australsia, African Union....
All sounds like another step towards the New World Order to me...
Points will fall down in case for US-dollar under this advance of Gulf countries. Because, I`m almost sure about the next "news" from Gulfia. -- That`ll be Gulf-Unification then... US dollar has been lost its most values while in WARs at Mid-East already, now it`s failing and loosing value which effective wisely whole of the World which according their economies up-on dollar.
Anyways, gulf 1 - 0 usa.
I guess the "I Won" did not bow low enough.
Mmm Mmm Mmm
Why all this animosity from the dear european bretheren? A common currency for the Arabs is within their rights if they so desire. They are not fighting a war to plunder a third country's resources, are they? What works for Europe will work for the Gulf nations. Obummer should think about bringing more value and respectability to the dollar than to be sendingmore mercenaries to kill the Afghanis. May be one day the Afghani might be a stronger than the USD.
Another Ummayad Caliphate . . . ah yes . . . I can hardly wait for THAT again!
Wow !
Very interesting.
I read all the comments.
I am a westerner, follower of history, modern politics.
What a mass of divergent views.
Its a wonder anything every gets decided.
The Kingdoms paper comes and goes but well over 2,ooo years of history proves that Gold is where it's at.
The Rothschild's at work, their agents are in a world wide attempt to own all of the worlds wealth. The sooner the worlds people wake up to it,the less wars they are able to start & finance on both sides! You will never see them in news headlines,but they like it that way.
if they lose control of the US Fed, after taking trillions from American,they will fo after what ever is left, they have agents worldwide to do as they like. A war between Iran & other Gulf nations would be a move they used during war II. Google them & their actions, it would open your eyes.
Thank you Mr Obama and Mr Bush for destroying the USA. We should have been drilling here in our own country and offshores. Clearly America belongs to International Bankers and the Senators and Congressmen have been bought off.
Any other substitute currency will be just as worthless. Individuals might as well print their own currencies in their basement and call it whatever they want. The only time tested currency to prevail until today is gold and silver.
These folks don't realize what the U.S. "really" considers as serious. All of the persiflage aside if the sand dune clique thinks that Americans will not find a pretext to invade them and seize the oil fields if the U.S. access to oil is threatened by their machinations, they are unaware of what occurs in the real world.
The Chinese are sustaining the U.S. now, and using accumulated dollars to purchase the energy and other mineral resources they need. This attack on the dollar is not only an attack on the U.S., but also on the Chinese who are so heavily invested in that currency.
I suspect the euphoria of exercising what they perceive as their economic power has distorted the view of the Arabs who control oil resources. They will be in for a reality check. Remember that President Eisenhower threatened to put them back into the sixth century (that in which Muhammad was born) when they first attempted to use the power of their cartel.
As far as I'm concerned. The present economic crisis has all but shown that governments can't be trusted and currencies MUST be linked to something tangible i.e. gold & silver. No one should have the liberty to print as much money as they want or need out of thin air. Unless of course, they allow every man & woman on the street to do the same themselves in their basement. China's call for creation of a super reserve currency, made up of a basket of global currency sounds like exchanging one brand of toilet paper to a basket of several different brands of the same. Now the gulf wants to create their own brand of toilet paper. Whats wrong with these people?!
The GULFO? Really? Is this some sort of missing scene from Spamalot?
Talk about doubling down on oil demand remaining constant.
Oil is definitely a cheap source of energy when compared to other current forms, but coupling the US's refusal to drill in proven areas and the difficulty in retrieval in the areas that drilling is allowed, the US is going to have to go nuclear. Our power needs cannot be sustained by wind and solar unless we cut back on our economic development and consumer usage, which we will not do.
I have a feeling this currency will go the way of the dodo shortly after it is adopted.
What's this nonsense about the arab states not tearing themselves apart in wars? Lebanon has regularly imploded over the past 30 years and Iraq did a pretty good job of taking on its Islamic but non-arab neighbour Iran in years of murderous savagery.
Face it, the US has got no real friends, and many nations would be rooting for the demise of the dollar. The US has become the schoolyard bully, and the economic attack looks favourite. The US can print dollars, but it can't print other currencies. So when the dollar is no longer the world reserve currency, the money tree is cut down and the petro-dollar cycle broken. The US can no longer print dollars to pay for imports. Then the massive US debt overhang will kick in leading to food riots. Game over America pals. If you want to blame someone, blame Retarded George.
This story got linked by Drudge so all the anti-Arab racists are out in force.
It will take at least 10 years for the GCC to get this currency together, and the main motivating force will be to save money and simplify trade. It's not about establishing new caliphate; that's just right-wing scare-mongering.
I propose they call it the GUMY!
GUlfMoneY
The whole problem here is we do not sell toilet paper at a high enough price (toilet paper for oil) then agian maybe they dont
use it?.
The Dollar is doomed as long as Bernanke and Geithner have control of it. They are NOT working for us -- they are working for the NWO. In case you haven't noticed, NONE OF US are included in the NWO. We are just the fodder for their frolics. You may call it mismanagement -- I call it TREASON!
I bought a bunch of Zimbabwe 100 billion notes (just for laughs) and gave away most as gag gifts
I will keep two incase someday maybe worth their value if the Zimbabwe people ever rise up and kill Mulgabe that Stanford educated pile of garbage, his family and his henchmen
"Hmmm. How about a single world currency for women? We could call it the Bust."
Developing... the Bust takes over as world curreny...Women worldwide agree to shop more...
If the oil rich Arab states had been saddled with their responsibility of paying for the education and modernization of Iraq and Afghanistan and keeping the peace in the volatile Middle East they wouldn't have so many petro dollars to convert to their 'gulfo.'
It comes as no surprise that these Islamic fundamentalists would want to invoke the Ummayadan Caliphate (661-750) which spread all the way to Andalusia. These religious zealots with their tribal schizms and retrograde religion of superstition and oppression dream of resurrecting their golden age of Islam when Muhammad's dream of conquest and dhimmification of Europe was realized. As the saying goes, in Islam, "there are so many civil rights abuses to perpetrate and so little time to accomplish them on behalf of Mo the Mad Ham."
Since they are so 'into' the 7th Century aka the time before indoor plumbing, antisepsis, and the benefits of modern science, they will, no doubt, not take offense when we rename those filthy little pebbles they once used to clean their hindquarters gulfos in honor of this auspicious occassion. May all their indoor plumbing run backwards to mark their return to the 7th Century.
So much for their gratitude for the blood of thousands of red-blooded, patriotic servicemen and women who sacrificed their lives to bring these barbarians into the 21st Century.
Presumably the Gulfo will trade up or down with the demand for oil. Thus if oil prices are strong and the Gulfo is strong, this will have a negative effect on exports of everything except oil. So if the longterm political and economic health of the Gulf states depends on a diversification of their economies, the Gulfo could be a step in the wrong direction.
Or maybe this new currency will fail spectacularly before it can do any harm.
Is no one concerned with all these new alliances taking root in the world? Eerily similar to the run-up before WWI & WWII.
History has a bad habit of repeating itself.
In case no one has noticed, the EURO has been tanking lately against the dollar. So go ahead and create whatever currency, the dollar will be king for awhile to come, until all hell breaks lose. Gold is the only true constant monetary base. Which no one seems to understand.
We owe 0 to the Arabs, who brought us it from India. Now the USA has shown the world how to use 0, putting in on their deficits so much, that the dollar is inflated away into worthlessness. At least you can't print oil, and you can use the stuff, much more easily the fiat dollars.
I think this is a better solution than the Tobin tax, if only for the simple fact that the minute a George Soros type decides to idly flip their currency for fun and profit regardless of the damage it does to everyone, there is no doubt in my mind that the currency trader in question is going to catch a New Jersey "cold" in a New York minute.
On a more serious note, this new currency will also act to slow down and make subject to public oversight by necessity large currency movements at the point of conversion, which means a lot of flakey flipping will be nailed at the new surveillance point which will have to be created. Heavens knows how much in the way of laundering of illegal arms trade, drugs trade, aggressive bankrolling of various and sundry "liberation movements," and most importantly for this region, funding of the slave trade, are being funded under the present system. If you ask me, who dreamed up this idea of a new regional currency was US Central Command at http://www.centcom.mil and the US African Command at http://www.africom.mil.
The spirit of Col. Shaw of the 54th Massachusetts Regiment is behind this, working in conjunction with those in the Moslem leadership who really want to play ball with the West, as far as is possible. If you don't think so, have a gander at the US African Command website. To clear up the slave trade globally (which is what the drugs and illegal arms trade in the Middle East are about, ultimately), you first have to cut the money supply line, then the law enforcement community can make their moves. From there, democracy-building is feasible.
Alots of Islam hater post here lately.First we will needed they oil for along time to come.The only reason america doesnot drill for more oil is congress pass than price cap on domon product oil of 8 doolar a barrel.How many of you will invest million of dollar to drill for oil which cost you now 15 dollar a barrel to drill for in expence in the hope of one day getting paid 8 dollar a barrel.Electric power car arenot practical for now,Than fuel cell power car will cost 3 to 5 million dollar to buy even the mass production discount in place.America people where unwilling to pay highter tax to run the government so we borrow and waste the money on weapon system that donot work or we will never use like star war missile defence system.
Too bad Obummer wrecked our economy....the dollar would be recovering by now were it not for his ill fated attempt at health care "reform"
no stupid! Arabian people have taugh humanity how to live and the arabs who have the good rule of making metals the the true currency that no one can print it nor can it be planted!
so it will call golden dinar! how beautiful!! the arab have both the golden dinar and the balck gold! it will be the most powerful currency in this world and the world will finally live in peace!
The ultimate consequences of GWB's economic, political, military, & social fiasco. We're broke but we're ready to throw money at wars against countries which haven't done anything to us. Now we're left only with less then optimal choices and others are deciding our own future. For once we're going to find out how it is to depend on others. And btw, in the last 10 years we have created a lot of good will around the world.
As an American living in a Gulf state. The dollar is still accepted by anyone, more so than any other gulf currency.
The Obama administration will handle this situation with dignity and grace. As soon as they stop making paper airplanes and shooting spitballs at each other. Giggle Giggle.
Why not call it the SAND DOLLAR?
sounds about right to me. and will 100% happen. Along with the North American Union.. & the African Union & Asian Union.. Then we can all join hands under a single world currency. A new world order and rejoice in the totalitarian, fascist nightmare were about to live under and sell our kids too.. Hooray for freedom !!
Once again the logic of a regional currency becomes a talking-point. Britain with its POUND assumes that by retaining its own national currency any POUNDS automatically flowback for investment into Britain. If UK had the EURO most foreign holdings would gravitate to the most successful trading nation...GERMANY.
Britain with its cheap POUND still suffers a trade deficit...so the theory of competitive devaluations as a benefit just lost one example.
I'd gladly trade my WORTHLESS AMERICAN DOLLARS for the new currency.
I'm American and even I have no faith in the US Government!
The creation of the EURO for "political reasons" exclusively?
FRANCE requested the EURO in order to stop constant revaluations of the D-MARK causing French inflation. President Miterrand agreed to the unification of GERMANY if Germany agreed to a single European currency.
The gnomes of Zurich could no longer target weaker currencies for the chopping-block like STERLING with George Soros. EURO emboldens intra-Europe trade without FX costs and unpredictable FX scenarios and hedging.
EUROPE needs a regional currency.
The role of the US dollar is openly challenged by CHINA after their USD losses. JAPAN has lost a fortune in US Treasury notes. Bankrolling the US is now a game with less players. Step forward....ARABIA.
Welcome to the NWO!!!!
Sucks!!!
Gulfo just doesn't flow. They should call it the "Sand Dollar"
"There is a logic to an Arab currency. The region speaks one language, has the unifying creed of “Umma Wahida” or One Nation from the Koran, and has not torn itself apart in savage wars – ever – in quite the way that Europe has in living memory."
Um, excuse me, but how many caliphates have they gone through? That region is way more volatile than Europe in living memory.
Once oil is no longer needed by the US, a pan-arab currency will be worth less than camel dung.
We nailed Saddam for swithching over to Euros for Oil exports, perhaps a hint for things to come?
Only more reasons for US to get off Arab oil. But not by way of eco fascist are proposing. We should develop nuclear power and use our readily available oil, gas and coal reserve to sustain our economy and standards of living. At the same time develop new alternative energy sources using our base of knowledge. That’s the way to go.
I must be a contrarian.
My first thought was, "Well, good for them."
If the USA had any sense, they'd back their dollar with gold.
I don't think the Euro works for Great Britain (maybe it works for Germany and France) and I certainly don't like the idea of the Amero. Canada exists despite the USA, and I don't want to join Mexico in becoming a province of the Excited States.
My solution for the Middle East is to encourage the Arabs to back Israel against Iran, but I guess that won't happen anytime soon.
Sounds to me like they are just making work for economic hitmen.
American currency hegemony does not represent a truly free market. The Euro, and now the Gulfo, are not attempts to undermine the market, but to allow true competition in the currency exchange market. If people continue to value the American Dollar, then it will not be weakened by other currencies.
It is quite ironic that many of those who suggest that the Dollar will be weakened by competitive currencies (Conservatives) espouse free-market principles, especially in America, while at the same time reviling a free market for currency. I would suggest that those who seemingly support such free market values read material from Robert Nozcick, especially his views on currency competition. I hypothesize that many will finally realize that they do not truly believe in a free market, especially given the fact that some of the comments posted in response to this article reek of protectionism.
So, they have changed to a single currency. So what?
Do they think that they will weather this economic storm?
The reality is a group of weak, backward states sitting on a pile of treasure. Do you think they will be allowed to keep all of this wealth?
No sir, in a short time (especially since the United States has been weakened) someone is coming to visit them and take away their treasure.
How foolish those who hate the United States. In the end, it was the one thing keeping the wolves at bay...
American currency hegemony does not represent a truly free market. The Euro, and now the Gulfo, are not attempts to undermine the market, but to allow true competition in the currency exchange market. If people continue to value the American Dollar, then it will not be weakened by other currencies.
It is quite ironic that many of those who suggest that the Dollar will be weakened by competitive currencies (Conservatives) espouse free-market principles, especially in America, while at the same time reviling a free market for currency. I would suggest that those who seemingly support such free market values read material from Robert Nozcick, especially his views on currency competition. I hypothesize that many will finally realize that they do not truly believe in a free market, especially given the fact that some of the comments posted in response to this article reek of protectionism.
Tony L, your comment, "All the more important and urgency in finding alternative mid east oil" can work, but only if Climate change alarmists are excluded.
GOLD
In your dreams, Amerophobes!
Never in a million years.
In any case, I thought the oil was supposed to be running out. What would this mythical currency be based on then?
Sand?
Camel dung?
Great move and two things that make it not such a great move: 1) if and when we get off fossil fuels; and 2) when (it will happen) oil supply dwindles and then eventually is out. That Petro-Dollar will be worthless and their economies investments that will be made in these Petro-Dollars to guard against eventual life-after-oil will all be worthless….Smart!
Yes, the US buy plenty of stuff but it has degraded to a shop frontend of China. When the US stop buying... the Chinese will sell their crap to other countries."
*******************************
What a wonderful example of the complete economic ignorance of the America hater. If America fails, as the largest consumer by far, the above poster claims that it is no problem because Chin will "sell it's stuff to other nations". Really? And WHY would these other nations, who are currently buying ALL THEY WANT TO BUY, by what America cannot buy because of her financial difficulties. It is not as if the other nations are being DENIED the items they want to purchase from China because America is buying most of it. There is still HUGE capacity in China going unused and they are producing what ALL the other nations want. Why in the world would Britain, France, Germany, Japan, etc suddenly buy the huge amount America was but no longer is able to purchase? What would they do with all this extra merchandise they are supposedly going to purchase from China to take up the slack of America going bust?
It is apparent this poster like the great majority on the left cannot see past their ideology and continue to make foolish statements as we have seen here.
It is the Left which is today controlling America and it is the fiscal policies of the Left which may well destroy both her and the worlds financial systems and economies.
Perfect...the Arabs are now saying that our dollar has "failed" and they are creating an even BIGGER sect from the non-western powers...perfect to mix in with our passive president, who probably will meet this with much praise and thankful, hegemonic crude oil empire...if it wasn't there before, it sure as hell is now
I predict that Obama will now push for the AMERO to counter the dropping dollar.
We developed the oil fields for these backward desert dwellers before they had even any clue that the petrol was there. But now they are benefiting as sole owners. I say that is unjust! We must demand at least a 50% cut of the profits or we should invade and defeat these backward, Islamic scum.
All the more important and urgency in finding alternative mid east oil. This is a national security issue as well as a economic issue. We need a national task force with business leaders, government and other players in deriving energy and economic policy to protect our national interests.
AEP is to be congratulated for being the first among business jounalists with the breaking news of a Gulf single currency.
It remains to be seen when such a currency might come about.
The threat to dollar hegemony in the pricing of commodities, starting with oil is clear.
The "old world" 20th century post war order, dominated by the US is coming to an end.
Europe is unified, China is resurgent, Russia has thrown off its shackles and now the Arab oil world is flexing its muscles. All at the expense of the US, caused by its mismangement of the global economy.
Mike on December 16, 2009 at 03:01 PM "Why are so many of you cheering the US's financial problems? We are the world's largest economy, and have the most consumers. If we stop buying stuff, then a lot of you will be out of work."
The US has reduced its economical power in many ways during the last decade.
Yes, the US buy plenty of stuff but it has degraded to a shop frontend of China. When the US stop buying... the Chinese will sell their crap to other countries.
On top the US have devalued the US dollar by an extreme monetarization of debt. And the logical consequence of this is that the Dollar will not be accepted anymore by the big trading partners (I expect China to follow one day).
All the more important and urgency in finding alternative mid east oil. This is a national security issue as well as a economic issue. We need a national task force with business leaders, government and other players in deriving energy and economic policy to protect our national interests.
Too bad the crusades ended so soon..
When the commie bums are thrown out in 2010, maybe we will drill for our own oil and they will be eating sandy camel meat once again. Oil drilling in America is a security issue more than an economic one today.
Well now, we have a president who hates the very people he represents, hates the currency the American taxpayers support, hates all deeds this country has done in the name of freedom, has a congress of traitors who share his beliefs. If the world so very much hates the very currency that has given rise to their power, I for one will no longer give our corrupt government what it wants. Lets see where the World ends-up when my fellow brothers stop handing our dollars over in the form of a TAX Revolt. Watch what happens when we stop purchasing Oil from these sand traitors, watch what happens when we reel in our military and stop wasting our taxes on supporting the UN, Unicef, The Red Cross, Saudi Arabia Military, foreign conflict, food donations, close our borders, revoke all overseas investments, kick-out exchange students, close down our embassies globally, recreate the Nuclear targets list, ratchet up our disapproval of regimes in the middle east, etc etc etc....
Oh, and dear middle eastern states who tell us we need to leave Iran alone? Try fighting a real war before you tell me, a citizen of the MOST Free, Most Power, MOST CHARITABLE Country in the whole World, what to do.
One time in america the treasure dollar bill back by either silver or gold was rare in america,bank notes issue by every bank in america was the paper currenty common in use. Merchant and small shop owner have no idear how good each banknote was or it was than real bank issueing bank notes,in 1898 the last book to be printed as than general gude on bank note list over 100,000 banknote an what they where worth and phony banknote both consit and one issue by phony bank.When the federal reservice note came out it was than improvement over the old bank note system.The only thing most america dilike about the Fed is they are doing thing they wouldnot be doing like trying to control the world.The Fed would be better off justing watching the america dollar and ecomoncy only.
A single currency proposed (and to be controlled) by the most unstable, incendiary region of the world, by a cartel, the existence of which would be illegal per se in any of the civilized countries of the world. That sounds like a proposal that would be designed by someone intent upon destroying the economies of the world.
What a wonderful development.
I am truly looking forward to the day that the Arabs underwrite their own defense as the US weans itself from Mideast oil.
To suggest that it has been anything other American technology, American oil demand and American defense that has allowed the Arabs to enjoy the standard of living and peace they have enjoyed is silly.
This initiative has very little chance of success and is doomed to failure.
Saudi Arabia and Kuwait would now be parts of Iraq but for American intervention.
If America ever needed a call to oil independence, the Arabs have provided it now. Thanks.
I'm sure there will be a LOT of trust backing this new Arab currency.
Hmmm . . . we have a Pan-Arab monetary union that just so happens to be coming into form when we have an administration that appears hell-bent on destroying the value of the dollar via hyperinflation caused by incredibly excessive borrowing. Perf! Anyone ELSE get the uneasy feeling that the U.S. government is taking orders from just about everybody OTHER than U.S. citizens?
Given the world is paying a price for the self inflicted wounds by the US, plus the actions of others which look more shabby than chic -
is it surprising to see this trading culture look at options which better serves its interests.
After all, Araby was known for trading long before Mahomet popped onto the scene.
If the information contained in this article is accurate it doesn't take much to see a logical conclusion of this will one day be a massive Mideast war of a religious background with the Arab states fighting among themselves. Throw in nuclear capability and various alliances based in attempting to keep things financially stabilized and you end up with a world war. No doubt someone will claim it's over oil, but the clues here are a war based in someones idea of their self desired view of religious perfection. Non-Muslim need not apply.
"The region speaks one language, has the unifying creed of “Umma Wahida” or One Nation from the Koran, and has not torn itself apart in savage wars – ever – in quite the way that Europe has in living memory."
There's a first time for everything. And while the region may not have occasioned any world wars, neither has it been a model of peace, love, understanding, or tolerance.
Why are so many of you cheering the US's financial problems? We are the world's largest economy, and have the most consumers. If we stop buying stuff, then a lot of you will be out of work. I totally get the idea about not wanting the US to be in charge (of the West anyway) as we have been since the end of WW2.
My question to you is, if we fall, who will pick up the slack? I can't see any other country filling the void we would leave.
I hope Britain, Canada, Australia, and New Zealand cement their close historical, ethnic, and cultural ties by adopting a singe currency. Call in the New Pound Sterling. It would help Britain fend off the euro, Canada the USD, New Zealand the Australian $, and keep Australia from drifting into China's orbit.
All the more reason to resume drilling our own oil, here in America.
all you anti-Americans just wait till the day the USA can't or won't come to save the world from the tyrants that are still to come than whatever your currencies are they won't be worth the paper they are writen on- be carefull you might get what you wish for-
I think I will start my own currency too. I always get in on new trends far too late. I will call it the Duglano. It will be backed by Corona beers. Ya can't eat or drink gold.
I think it's a splendid idea. As the west grows less and less dependent on Arab oil, the supporters of worldwide terrorism can trade their own currency amongst themselves. They can call it the "sand dollar".
Thank you Mr. Hope & Change for regaining the confidence of the Arab world. There can be zero doubt now that they don't think you have a clue.
> and has not torn itself apart
in savage wars – ever – in quite
> the way that Europe has in living memory.
Not to the degree of Europe, but surely you can't say "ever." It is a region of middle ages type savagery. The wars have been less state vs. state and more people vs. people and state vs. people.
If the "Arab World" is indeed under the impression that the Eurozone is healthy, strong, and solidly based, then they need to rethink before depositing all their wealth with unscrupulous bankers and traders.
Here in EUroland ( aka LaLaLand ) we 'enjoy' being financially 'raped' on an hourly basis by bureaucrats in the EU Commission, Socialist MEP's gilding their own nests, right down to smaller individual governments topping up their own personal 'Gravy Trains' with OUR TAXES !
I forsee a great multitude of one-handed 'civil servants', bankers and 'Representatives' emerging from these dreams, for surely they will insist on Shariah law governing their 'protection' ?
The US Dollar has far more serious things to worry about than some silly Arabic "Me-Too" financial disaster in the making !
When will Socialists understand that the best course of action to take once you have dug yourself into a hole, is to STOP DIGGING !
"Et sceleratis sol oritur".
( The sun rises even on the wicked ).
Let's see we have the Euro and the proposed Gulfo and Amero. Considering that paper fiat money is just a form of control for the elite bankers and also considering their ironic sense of humor about naming things given to us to use,like the World Wide Web, Cell Phones and T.V. and computer programs. Let's just go with the one world currency and call it the Dumbo. Or will Disney complain about copyright infringement?
Hmmm. How about a single world currency for women? We could call it the Bust.
Not surprising the Arabs are trying to emulate the EURO, which is proving irresistible in the way it is weathering the financial storms. Let’s hope this is not leading to a second oil crisis, when oil will be denominated in a currency other than the moribund US $. Should greatly benefit the UK and other oil producing countries.
Perhaps the UK and Norway could join the “Barrel” and stick it to the EURO :-)
"But there are concerns that the region is trying to run before it can walk. "
Obviously not concerns harboured by the Gulf States which probably are starting to Realise and Release their Energies and React against how they are being cynically played for sugar daddy fools by the Capitalist System.
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A gulf single currency, based on a basket of currencies is fantastic news for oil consuming nations.
The collapsing US dollar has exported oil price inflation around the world as oil producers attempt to maintain the value of oil priced in collapsing dollars.
Only this week the Bank of England saw an increase in UK inflation. This is entirely due to the oil price, which is reaching unprecedented peaks at the pumps.
In geo-political terms this move is an earthquake. It truly marks the end of the American century. The US has refused to give up its dollar hegemoney so other means have had to be found to rescue the global economy from ruination by the US.
The US has been indifferent to the damage its failing currency is doing to the global economy, preventing it from recovering and casting it back into another recessionary downturn.
The Dubai collapse has been a wake up call to the Arab world.
The Gulf Currency peg means they are all the dollar in disguise...round up all of them and call it a single currency, and for the most part you just have a name change..and it's not just breaking basic trade barriers that's needed. The gulf states constantly twitter on about transparency, but until they do something effective about the massive corruption, lack of accurate business data (how many Saudi firms are ridiculously over-valued?), etc, etc, this is a non-starter...yet another Gulf prestige project, like lots of towers, and islands etc....
I'll believe it when it happens.
As their economies are based on oil surely the proposed currency should be called a BARREL.
A long overdue move, and perhaps the first step to a new regional block.
What a dumb move. The current economic crisis in Greece and Ireland etc is a prime example why various countries economies fail when having a single currency with fixed economic ideals.
Add this Oil currency to Iran selling its oil in its own currency and in Euros and Yen, The Russian selling its oil in Roubles and Euros; Chinese Bonds springing up in Aisa; snd Asian trade being conducted in regional currencies; the coming regional South American Currency for trade, and more of others in the pipeline spells only great news for the rest of the world.
But there are great and negative implications.
The great implication is the the Feds bite on the rest of the World will be significantly reduced...We dont have to listen to Ben anymore, especially after eighteen years of shit from Greenspan.
Unfortunately the negative impact is creditors of USA would have to take a significant hair-cut as this would reduce the value of US dollars. Though this will be negated by the fact that the us dollars would eventually devalue anyway, and most creditor nations have taken some measures to counter this impact.
My suggestion to the world is that it is about time the tables are turn. Creditors unity is required here. Creditors nation should negotiate with USA to convert the debts to the new currencies and pay back creditors nation in the respective currencies.
The set back here is that the exchange rate would most probably bankrupt the USA further if the real negative value of the us dollar is determined.
Lastly there is still the mighty military of USA to contend with.
We need a single world currency and the Sterling fit the bill is backed by paper.
Surprised you make so much of this discredited initiative - with the exception of Kuwait all Gulf currencies are effectively the US dollar due to the pegs. The 'new' currency will still have a dollar link so this is not a step away from the dollar - indeed in the case of Kuwait it is a step back! Besides when will this happen? The GCC did not even set a timetable - and since when did the Middle East ever meet a deadline?
For the middle east nations to be able to join together to form a currency union backed perhaps by some fictional basket of currencies or real metal (gold) but ultimately backed by their oil resources, while at the same time taking a liberal view to reform their economies by adopting free trade and free movement, is indeed a very big positive for everyone on this planet. Since the west has forgotten its own liberal ideals and are now formed in a socialist customs union, heavily influenced and biased towards the socialist ideal that politicians are not only needed but essential to further the interests of the common man and the state, then any hope for a better future for mankind must lie elsewhere.
Andrew Lee-Gough - The Afro? An interesting idea, do you have any detail I could comb through?
"The Emirates are staying out for now ...."
Maybe they don't mind not being at the Heart of Europe, I mean, Islamistan.
Not a lot has been said about the virtues of "safety firewalling" regional economic activity through regional currency development, as it is kind of a negative view overall of the virtues of having area-specific money, but that is in fact what the Euro provided for Europe in this last crisis if only partially through allowing separate currency hedging and slowing the velocity of money changing hands when it needed to be slowed down.
It only proves to me that incrementally the oil producing states are finally approaching the problem of assserting their national sovereignties in proactive ways seriously. Good for them.
Plus, think of all the joy this will mean for currency traders and future Tobin taxers, too! Erm, perhaps let's not...
Oil prices will rise in real terms for Western consumers, exchanging increasingly valueless currencies for the commodity they need most. I don't know what the timetable for this would be, but the geopolitical and economic ramifications are potentially enormous. Still it may herald a sharp exit away from Oil to other more sustainable alternatives (and i mean that in a predominantly financial sense!). I also think this would mean the era of low (subsidised) US rates may be coming to a close...anyone wanna take a stab at potential consequences of that?
This is a great development. Perhaps a single currency could be created for Africa - the Afro!
How about Nigo! ?
This is a great development. Perhaps a single currency could be created for Africa - the Afro!
There is hope for the world, then.