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-- Posted Tuesday, 6 October 2009 | Digg This Article | | Source: GoldSeek.com
Rumors citing vague banking sources in the Far East have surfaced in The Independent newspaper that the Gulf States are looking at switching from the US dollar to trading oil in a basket of currencies and gold. At first sight such a move looks highly unlikely as it would destabilize the dollar as indeed even these rumors achieved yesterday, and perhaps that was the intention of the sources that made them. Staunch allies The Gulf Arab countries are staunch allies of the United States and dependent on the US for military protection in their volatile region. It is therefore far more likely that such rumors, if they are true are more a question of policy makers mulling over policy options, and even considering a move against the US dollar can be damaging if taken out of context. Indeed, it would perhaps be surprising if Gulf States were not considering all available monetary strategies at this moment in time, particularly with a proposed union of the currencies of Saudi Arabia, Kuwait, Bahrain and Qatar supposedly about to happen. Gold for oil Gold bugs have been excited by the statement in The Independent that ‘The transitional currency in the move away from dollars may well be gold, according to Chinese banking sources.’ This does indeed chime with recent warnings on the website of gold superbug Jim Sinclair that a dollar crisis is imminent and that its cause will be a Chinese statement on its intentions towards the US dollar. The Independent article speaks of ’secret meetings’ between finance ministers of Middle Eastern nations along with China, Russia, Japan and France. That could be an exaggeration of talk over coffee late at night. The gold price jumped on the publication of this article but it will need to be better supported by official statements to be treated with credence. On the other hand, it does underline how parlous the state of global confidence has become over the future of the US dollar and highlight a possible solution, although one that risks causing more damage than it cures.
-- Posted Tuesday, 6 October 2009 | Digg This Article | Source: GoldSeek.com
Previous Articles by Peter Cooper
About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in
1999 to complete his first book, a history of the Bovis construction group.
Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.
 Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.
He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.
Order my book online from this link
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How Much Credence to Give Rumors of Oil for Gold Swaps
