The Demise of the US Dollar

B00Mer

Keep Calm and Carry On
Sep 6, 2008
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www.getafteritmedia.com
Exclusive report by Robert Fisk

October 6, 2009
The demise of the dollar
By Robert Fisk

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading


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.

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."

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil - yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China's extraordinary new financial power - along with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial system - which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq - blocked by the US until this year - and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements - the accords after the Second World War which bequeathed the architecture for the modern international financial system - America's trading partners have been left to cope with the impact of Washington's control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. "The Russians will eventually bring in the rouble to the basket of currencies," a prominent Hong Kong broker told The Independent. "The Brits are stuck in the middle and will come into the euro. They have no choice because they won't be able to use the US dollar."

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

http://www.foxnews.com/images/573078/0_61_320_beck_one_100609.jpg
 

Kreskin

Doctor of Thinkology
Feb 23, 2006
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The value of the dollar is one reason the US hasn't been competitive. Perhaps a declining dollar will bring jobs back. The China thing has been a charade. How long have they pegged against the US? An unsustainable economy is what they created. Let it decline and see how those economies do when the US is buying domestically and not from them.
 

Kreskin

Doctor of Thinkology
Feb 23, 2006
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And while their at it, watch the money pour in to buy cheap converted dollar US real estate. Construction, jobs..sounds good for the US.
 

SirJosephPorter

Time Out
Nov 7, 2008
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And while their at it, watch the money pour in to buy cheap converted dollar US real estate. Construction, jobs..sounds good for the US.

That may well be, Kreskin, but I don’t think Americans will like that. It will mean foreigners taking over prime real estate, prime spots in USA. They will build specious villas, mansions etc. and Americans can only look at them in envy. They will create jobs, and Americans will have to work for foreigners.

It will be a far cry from the poor, penniless immigrants coming to USA to make a living. Americans will resent these newcomers big time.
 

Kakato

Time Out
Jun 10, 2009
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I thought they were worried about going broke?

I love it!
My hearts just bleeding for them.:roll:

Saudis ask for aid if world cuts dependence on oil
Quote: BANGKOK — There are plenty of needy countries at the U.N. climate talks in Bangkok that make the case they need financial assistance to adapt to the impacts of global warming. Then there are the Saudis.
Saudi Arabia has led a quiet campaign during these and other negotiations — demanding behind closed doors that oil-producing nations get special financial assistance if a new climate pact calls for substantial reductions in the use of fossil fuels.
That campaign comes despite an International Energy Agency report released this week showing that OPEC revenues would still increase $23 trillion between 2008 and 2030 — a fourfold increase compared to the period from 1985 to 2007 — if countries agree to significantly slash emissions and thereby cut their use of oil. That is the limit most countries agree is needed to avoid the worst impacts of climate change.
The head of the Saudi delegation Mohammad S. Al Sabban dismissed the IEA figures as "biased" and said OPEC's own calculations showed that Saudi Arabia would lose $19 billion a year starting in 2012 under a new climate pact. The region would lose much more, he said.
 

Kreskin

Doctor of Thinkology
Feb 23, 2006
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Exclusive report by Robert Fisk

October 6, 2009
The demise of the dollar
By Robert Fisk

I

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.

http://www.foxnews.com/images/573078/0_61_320_beck_one_100609.jpg

It's a good thing Robert is writing these exclusive reports. Otherwise, the US government would never know what's going on.
 

Toro

Senate Member
China bitching about the dollar is a vacuous complaint. They have pegged their currency to the dollar to subsidize the world with manufactured goods, and have created enormous imbalances within their own economy that will eventually create tremendous stress in their country. They should have allowed the currency to float some time ago. Now, they are part of the problem that they complain about.
 

Kreskin

Doctor of Thinkology
Feb 23, 2006
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I heard today that the Bank of Canada might print money and buy US Bonds if the CDN dollar goes much higher.
 

dumpthemonarchy

House Member
Jan 18, 2005
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The US dollar is doomed. This is so obvious. The genie is out of the bottle here because the world just doesn't need it anymore and they no longer provide brilliant leadership. The drift during the Clinton years and then the debacle of Bush puts the US on a downward slope. The world is harsh, be a country without a credible plan and you sink.
 

Toro

Senate Member
I heard today that the Bank of Canada might print money and buy US Bonds if the CDN dollar goes much higher.

That's the case for owning gold. The US is determined to devalue its currency. However, there is a level to which it can fall no further, otherwise it will gut the manufacturing base of the rest of the world and relocate to places like South Carolina and Mississippi. Thus, as the base currency, it takes all other fiat currencies down with it, causing the price of real assets to rise in all currencies.
 

Niflmir

A modern nomad
Dec 18, 2006
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I really don't care about what currency people decide to use. I am more interested in knowing if these secret meetings were carried out in English or some other language.
 

dumpthemonarchy

House Member
Jan 18, 2005
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US big biz really wanted China to manufacture cheap goods, but China has turned the tables on them because they have kept their market closed and still sold to the rest of the world. Big biz people had a sunny notion that nations would disappear, especially with the fall of the Berlin Wall.

China still needs US markets, but it needs mideast oil just as much, so new natural allies are being formed. And the US just becomes another player as a result.
 

coldstream

on dbl secret probation
Oct 19, 2005
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The whole concept of Monetarism, of Free Trade in currency and credit, and the commodification and denationalization of has been a catastrophic failure.

It came to prominence after the dismantling of the Bretton Woods Agreement in the early 1970s.. which limited exchange rates to narrow bands.. and guaranteed sovereign privilege in establishing banking and credit policies for nations... consistent with tariff and trading policies to promote full employment and integrated industrial economies.

All that's collapsed in the current paradigm Global Free Market Capitalism. Where regular blitzkriegs are made by speculators.. against currencies.. and are completely unregulated. They own and are facilitated by supranational agencies.. the IMF, WTO, World Bank.. who impose austerity on impoverished national populations in support of their grotesquely rich clients on Wall Street, Bay Street and the City of London.

The U.S. problems like Canada's are much deeper than the dollar. They go to the manufacturing collapse in both countries.. and a vast polarization of wealth that will ultimately lead to social chaos. Nor currency can be protected in these circumstances.
 
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darkbeaver

the universe is electric
Jan 26, 2006
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RR1 Distopia 666 Discordia
The war in Ukraine will fix everything but mostly the paper gold problem. There are millions of uncovered gold certificates. Get up early if you want a good spot in the line. Soon as the bandits can't hold physical down the cannons will start they say. China and Russia will declare their proven bullion reserves which will prove the west is full of sh it, in December 2014 I heard. The list of states requesting their gold to be repatriated is getting longer.
 

MHz

Time Out
Mar 16, 2007
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I heard today that the Bank of Canada might print money and buy US Bonds if the CDN dollar goes much higher.

That's the case for owning gold. The US is determined to devalue its currency. However, there is a level to which it can fall no further, otherwise it will gut the manufacturing base of the rest of the world and relocate to places like South Carolina and Mississippi. Thus, as the base currency, it takes all other fiat currencies down with it, causing the price of real assets to rise in all currencies.
Nothing at all to do with the Fed owning more than 51% of their own debt. I though Belgium was swallowing up that debt?