Many have called for a revaluation of Gulf currencies from the historical dollar peg. The flood of liquidity and rapid inflation has been hailed as a warning to the falling interest rates, decline of the US Dollar, and record high oil. The loss in value of the Gulf currencies has been partially responsible in the rise of inflation. The inflationary pressures, which should govern an increase in rates by the central banks, have created markets so liquid that deposits are being quoted at negative rates. The list below shows the Gulf currencies depreciation, in value, due to the Dollars decline.
Gulf currency’s depreciation due the decline in the US Dollar (since 2002):
- Saudi Riyal 40%
- Emarati Dirham 37%
- Qatari Riyal 47%
- Kuwait 23% (revalued in 2007 to a ‘basket’)
- Oman 39%
- Bahrain 37%
The dollars depreciation in comparison to other currencies (since 2002):
- Euro 78%
- Sterling Pounds 40%
- Chinese Yuan 18%
- Indian Rupee 21%
The recent meetings and optimistic resolutions discussed create a larger rift in the GCC economy. By claiming, that Kuwait would re-peg to the dollar in an effort to join the union in 2010 is simply unfathomable. Kuwait, having been the least to depreciate could attribute its stability to the revaluation of May, 2007.
Based on a recent report, GCC Currencies: A Square Peg for a Round Hole, by NCB Capital (National Commercial Bank - Saudi based)
Nationalisation, hyperinflation, SCO and Iran war
SCO Chief welcomes Iran’s membership. (SCO is the Shanghai Cooperation Organisation)
OPEC President Chakib Khelil said at a conference in London on Tuesday that “the downfall of the dollar” was a major concern for the cartel, says The Los Angeles Times. (1) (OPEC is the Organisation of Petroleum Exporting Countries)
IF
one puts today’s news together
1) The Arabian Gulf oil principalities say they’ll stick with the U.S. dollar until they achieve monetary union in 2010 [...]
2) The World Gold Council and a commodities group in Dubai announce a gold exchange-traded fund to be operated according to Islamic financial principles.
3) And the International Monetary Fund announces that it has formalized its plan to sell 403 tonnes of gold.
[THEN]
it may be hard not to wonder if the oil states have not made a deal with the United States to continue for another two or three years their cooperation with the U.S. scheme of rigging the currency and gold markets in exchange for whatever gold is to be unloaded in the name of making the IMF solvent — hard not to wonder whether this is not all part of an orderly hedging of the oil world’s dollar exposure,
says the Gold Antitrust Action Committee. (2)
The capitalist system is now so deformed by debt that it requires ever lower interest rates to keep going. It survives on perma-bubbles. Monetary rigour at this late stage would endanger democracy. How did we ever let matters reach this pass?, asked Ambrose Evans-Pritchard on April 02 in the Daily Telegraph. (3)
Today, Thursday, 10 April, US Treasury Secretary Henry Paulson speaks before the Council of Institutional Investors Spring Meeting. (4)
In that speech he will further outline his plan to hyper-inflate the US economy and to hyper-regulate, and thus nationalise, the whole US banking sector.
The Paulson plan for more concentration of economic power in the Fed and regulation is being felt daily in the troika of oil for gold, euro and/or dollar.
By trying to contain this dynamics at infinitum, our masters are providing an excellent opportunity for all gold accumulators.
In order to delay the day of reckoning as far as possible, our masters have no other option than to attack Iran.
No the Oil Bourse is not the only reason.
Iran is moving to join the Shanghai Cooperation Organisation (SCO), said the Russian news agency op 24 March 2008 (5)
and the SCO Chief welcomes Iran’s membership, said IranMania.com on 29 March 2008.(6)
The SCO is an intergovernmental organisation which was founded on June 14, 2001 by leaders of the People’s Republic of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Except for Uzbekistan, the other countries had been members of the Shanghai Five; after the inclusion of Uzbekistan in 2001, the members renamed the organization. Many have looked at this organisation as a counter to the North Atlantic Treaty Organisation (NATO). (7)
Four countries India, Mongolia, Pakistan and … Iran have observer status at the SCO.
As I said, Iran is now moving to join the SCO and the SCO Chief welcomes Iran’s membership.
Even though US presidential candidate for the Republican party, John McCain, was still arguing on 10 february 2007 that we live in a MULTIPOLAR SYSTEM (8),
we seem to be evolving towards a UNIPOLAR SYSTEM whereby the SCO will be the only pole left.
“What is a uni-polar world?” asked Russian president Putin on 10 February 2007. “No matter how we beautify this term, it means one single centre of power, one single centre of force and one single master,” he said. (
The joining of Iran is at present leading to world tensions which are similar to these preceding the First World War.
Is it then really surprising that Another
(http://www.usagold.com/goldtrail/archives/another1.html
- note the sarcasm of the site’s name – USA-gold )
currency will take over as world reserve currency?
This is important as the People’s Bank of China wants now to diversify the reserves (the backing) of the yuan
and bought last week a 1.6% stake in France’s Total. (9)
Ivo Cerckel
ivocerckel AT siquijor DOT ws
ENDNOTES
(1)
Oil jumps to a new high as the dollar withers again
Oil at $120 a barrel soon?
http://latimesblogs.latimes.com/money_co/2008/04/oil-at-120-a-ba.html
(2)
Is gold going east to keep oil principalities in line?
By: Chris Powell, Gold Anti-Trust Action Committee Inc.
5:10pm ET Monday, April 7, 2008
http://news.goldseek.com/GATA/1207634640.php
[...]
If one puts today’s news together …
1) The Arabian Gulf oil principalities say they’ll stick with the U.S. dollar until they achieve monetary union in 2010 [...]
2) The World Gold Council and a commodities group in Dubai announce a gold exchange-traded fund to be operated according to Islamic financial principles.
3) And the International Monetary Fund announces that it has formalized its plan to sell 403 tonnes of gold. …
… it may be hard not to wonder if the oil states have not made a deal with the United States to continue for another two or three years their cooperation with the U.S. scheme of rigging the currency and gold markets in exchange for whatever gold is to be unloaded in the name of making the IMF solvent — hard not to wonder whether this is not all part of an orderly hedging of the oil world’s dollar exposure.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
(3)
Bear market rallies only delay day of reckoning
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 12:13am BST 02/04/2008http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/31/ccview131.xml
(4)
http://www.reuters.com/article/economicNews/idUSN22ODAY20080409
(5)
Iran moves to join Shanghai Cooperation Organization
12:42 | 24/ 03/ 2008
http://www.en.rian.ru/world/20080324/102052243.html
(6)
SCO Chief welcomes Iran’s membership
Saturday, March 29, 2008 - ?2005 IranMania.com
http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=58722&NewsKind=Current%20Affairs
LONDON, March 29 (IranMania) - Secretary-General of the Shanghai Cooperation Organization Bolat Nurgaliyev on Thursday welcomed Iran’s bid for membership in the Organization.
“Iran’s claim for the Shanghai Cooperation Organization full membership will not bring any negative moments in relations with the regional and international organizations,” Nurgaliyev said.
Nurgaliyev said Iran’s official claim was received in accordance with regulations of the SCO Charter.
According to the Secretary-General, since 2005 Iran has held the observer’s position in the Organization, equally with India, Pakistan and Mongolia.
Along with this, these states participate in the work of structural departments of the Shanghai Cooperation Organization, he added.
“The SCO is not a military and political alliance and all the speculations that the organization resists the existing military and political groups are quite groundless. The military training conducted by the member countries have anti-terrorist character. We tend to cooperate with the international structures and regional organizations which have interests in Eurasia,” Nurgaliyev noted.
(7)
http://en.wikipedia.org/wiki/Shanghai_Cooperation_Organization
(
Saturday, 10 February 2007, 21:42 GMT
Putin’s speech: Back to cold war?
By Rob Watson
BBC defence and security correspondent, Munich
http://news.bbc.co.uk/go/pr/fr/-/2/hi/europe/6350847.stm
SNIPS
President Putin accused the US of establishing, or trying to establish, a “uni-polar” world.
“What is a uni-polar world? No matter how we beautify this term, it means one single centre of power, one single centre of force and one single master,” he said.
+
In today’s multi-polar world, there is no place for needless confrontation, and I would hope that Russian leaders understand this truth,” Senator McCain said.
(9)
China buys 1.6% stake in Total
By Richard McGregor in Beijing, Peggy Hollinger in
Paris and Henny Sender in Hong Kong
Financial Times, April 3 2008 13:53 | Last updated: April 4
2008 03:35
http://www.ft.com/cms/s/0/8a6a78a2-0179-11dd-a323-000077b07658.html
SNIP
The body that manages the bulk of China’s $1,650bn in foreign exchange reserves has bought a 1.6 per cent stake in France’s Total, the fourth-largest oil group, in a sign of its more aggressive approach to investing the funds under its control.