Daily Archives: October 8, 2009

Throwing BRIC(K)s at the Dollar

On October 6, the British newspaper, The Independent, dropped a bombshell by publishing an article by long-time middle-east correspondent Robert Fisk, called The demise of the dollar. Fisk reported that:

… 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.

Eamon Javers of Politico.com is now raising questions about Fisk and the underlying motivations for publishing such an article at this particular time (Whodunit? Sneak attack on U.S. dollar).

With the current uneasiness about the global financial situation and ongoing concern about the weakness of the dollar, markets can easily be manipulated using stories such as this in mass circulation media. I will not speculate about the reasons or the truthfulness of Fisk’s report, but the handwriting is clearly on the wall. The days of dollar dominance are over. The financial powers-that-be know that, and you can be sure they have a plan. The successor to the dollar is already being readied for prime-time, but will the emerging economies accept it? That is the question. — t.h.g.