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. Robert Fisk - Independent
Iranian Finance Minister Shamseddin Hosseini said on Tuesday he has in the past discussed with other countries the possibility of shifting oil trade away from the dollar, but such a step would require broad agreement. Hosseini, speaking to reporters on the sidelines of the semiannual meetings of the International Monetary Fund and World Bank, said he had not held any such discussions in recent days. "Some of the countries right now accept this idea," Hosseini said of a possible shift away from the dollar for oil. "But this is one of the subjects that needs more discussion and (to be) agreed on by everyone," he said through an interpreter. Hosseini said Iran agrees with the idea of shifting oil trade to a basket of currencies due to dollar weakness. "Generally we believe that the dominance of the dollar to the economy of the world is to the detriment of everybody," he said. "We are not alone in this belief."Hosseini said Iran has reaped billions of dollars of profits and averted losses by shifting reserves to the euro and other currencies from the dollar. Reuters
The problem that both China and the oil exporters have is that they're holding gigantic stashes of dollars that would suddenly be worth a lot less if they started trying to sell them off. So we've got this impasse, where lots of people complain about the dollar's supremacy but nobody seems willing to do anything about it. Justin Fox - Time
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Robert Fisk has put is fox among the chickens with his scoop on the dollar. According to Fisk the Gulf Sheiks along with China, Russia, Japan and France are all holding talks aimed at no longer pricing oil in US dollars.
Of course all of the above rushed to deny it. However Fisk insists in his story and if I have to choose between the word of Robert Fisk and word of a group of diplomats, I'll take Fisk every time.
What explanation could fit both versions?
Well, if these people have huge dollar reserves they are primarily concerned about the value represented by those reserves. They don't want to do anything to create a panicky run on the dollar which would drain the value from their reserves. That would explain the denials.
At the same time, if they believe that it is quite possible that the dollar might collapse in a foreseeable future, they would like to have a plan B to avoid being wiped out. That would explain the conversations.
The important thing for them would be, in case of a panic, not to trample each other to death running for the exits like in a theater of discotheque fire. They would have to have a commonly agreed on vehicle to transfer the value of the dollars to something else in an instant. They might only have a few hours to act before markets opened after some traumatic event that set off the panic. There would be no time to improvise, it would have to all go like clockwork or their economies would be ruined.
In other words, Fisk has observed them running a fire drill.
Why are they so worried?
Why have they so little confidence in America's ability to come through all this with flying colors?
What has happened?
I have my own little theory which I will share with you.
A while back I wrote this:
This particular crisis is about a vacuum in credibility. It isn't exactly America's "fall of the wall" moment... yet, but it is moving in that direction. Think what it means when a whole ideology crashes.
When I was a young fellow many people truly believed, and had made huge personal sacrifices all their long lives in the belief that history's inevitable march was toward socialism and that the Soviet Union was the genuine vanguard in that march. Many were still believing it right up till the moment when Gorbachev pulled down the Red Flag on the Kremlin.
It is impossible to exaggerate what an intellectual and political hole that left... a hole big enough for people like Alan Greenspan and George W. Bush to walk through.
Now that ideology has been trashed too.
The vacuum it leaves is of even greater proportions and those proportions are only beginning to sink in.
There is a curious wrinkle here. This is not just about dry figures, there is a grotesque, intensely human story that sums it all up: Madoff.
For me the Madoff story is the poster boy of the whole credibility collapse and the collapse of the American myth.
Huh?
Let me explain.
The vacuum it leaves is of even greater proportions and those proportions are only beginning to sink in.
There is a curious wrinkle here. This is not just about dry figures, there is a grotesque, intensely human story that sums it all up: Madoff.
For me the Madoff story is the poster boy of the whole credibility collapse and the collapse of the American myth.
Huh?
Let me explain.
When I first came to Europe, many years ago, I was amazed -- shocked at first -- at how so many Europeans of both the left and right, would affirm with a totally straight face that America was run by its Jewish citizens. I thought that it was simple antisemitism at first, but it was and is much more complicated than that.
It is really the only explanation they can find for our success.
Most Europeans think that the average, white bread, boy and girl next door, all-American type, is just too spontaneous, too innocent, too narrow minded or just too plain dumb if you will, to have ever put together anything like our good ol' evil empire.
Since the only Americans that Europeans find "European", which for most Europeans -- no matter how dumb they are -- means intelligent, educated, subtle and sophisticated, are the American Jews, Europeans just naturally assume the Jews are behind America's success.
That is why the Madoff scandal embodies the damage this crisis has done to US credibility: American Jews have turned out to be just as dumb as American goyim.
It is really the only explanation they can find for our success.
Most Europeans think that the average, white bread, boy and girl next door, all-American type, is just too spontaneous, too innocent, too narrow minded or just too plain dumb if you will, to have ever put together anything like our good ol' evil empire.
Since the only Americans that Europeans find "European", which for most Europeans -- no matter how dumb they are -- means intelligent, educated, subtle and sophisticated, are the American Jews, Europeans just naturally assume the Jews are behind America's success.
That is why the Madoff scandal embodies the damage this crisis has done to US credibility: American Jews have turned out to be just as dumb as American goyim.
The Madoff scandal is the quintessential caricature of the whole moment. The idea that people had around the world had was that American Jewish people were the only people intelligent enough to really understand advanced financial products and it turns out that America's richest, therefore smartest, Jewish people were as stupid as it was possible to be, and even Madoff himself was, dumb to ever think he could get away with it, all this has destroyed centuries of malignant stereotypes of the Jews preternatural craftiness at the worst possible and inopportune moment. The bottom line is: If America's richest Jews are just as stupid as the rest of the world's goyim, then... who is minding the store?
So, the world is waiting for the other shoe to drop.
They hope it wont come too soon, but they have to be prepared for when it does otherwise they too will be pulled down to ruin. DS
They hope it wont come too soon, but they have to be prepared for when it does otherwise they too will be pulled down to ruin. DS
2 comments:
A follow-on assessment of the whole Bernie Debacle. In addition to being "ein shande fur die goyim," it's also a telling commentary on the hollowness of "wealth" in today's America. Things have gotten so bad that guys like Bernie have resorted to theft within the tribe, rather than from the usual gang of goyim that used to line up to get skinned on a regular basis. That's frightening.
Another spin on the Madoff debacle. Besides being a first class "shanda fur die Goyim," it can be seen as a "leading indicator" of the state of the US economy. "Poor ol'Bernie," the analysis goes, "he ended up stealing from the tribe. I guess the usual suckers were too depleted to take another skinning!"
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