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"The US Dollar Has Failed. We Need To Delink."
Remember all that pooh-poohing when the gulf states were talking about their own currency? About how silly that would be? That it would never happen? Yeah well, sort of looks like it might. True, there is a deep and very comfortable denial in the United States such that the country can spend anything it wants, pump debt to any level it likes, play whatever games it wishes with the way it counts spending, and still enjoy the benefits of a reserve currency indefinitely. That denial may be just about ready to hit reality:
“The Gulf monetary union pact has come into effect,” said Kuwait’s finance minister, Mustafa al-Shamali, speaking at a Gulf Co-operation Council (GCC) summit in Kuwait.
The move will give the hyper-rich club of oil exporters a petro-currency of their own, greatly increasing their influence in the global exchange and capital markets and potentially displacing the US dollar as the pricing currency for oil contracts. Between them they amount to regional superpower with a GDP of $1.2 trillion (£739bn), some 40pc of the world’s proven oil reserves, and financial clout equal to that of China. Saudi Arabia, Kuwait, Bahrain, and Qatar are to launch the first phase next year, creating a Gulf Monetary Council that will evolve quickly into a full-fledged central bank.
The Emirates are staying out for now – irked that the bank will be located in Riyadh at the insistence of Saudi King Abdullah rather than in Abu Dhabi. They are expected join later, along with Oman.
The Gulf states remain divided over the wisdom of anchoring their economies to the US dollar. The Gulf currency – dubbed “Gulfo” – is likely to track a global exchange basket and may ultimately float as a regional reserve currency in its own right. “The US dollar has failed. We need to delink,” said Nahed Taher, chief executive of Bahrain’s Gulf One Investment Bank.
Well, Ben is certainly Man of the Year for proponents of a Gulf currency.
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At first I thought the headline said "The US Dollar has failed. We need a drink."
Ironic, considering these are islamic countries, where alcohol is (nominally) prohibited.
is it irony or wit? i don't know-a
HaHAAAAAAAAAAAAAAAA, dangly parts
I think you just 1'UPed Marla. Cheers!
We beheading off to the bar.
Hah hah hah hah hah hah hhhhaa ahahha. Giggle giggle snort snort
Now that is funny.
Most intersting is that the uae derailed this last go and so happens Cheney if recollection serves was in the region before the objected over location of central bank? Kind of interesting considering the lawsuit over city on fraud and the back peddling of the kuwaitis not to mention the results of the iraq oil auctions. As The chorus grows louder draws for a action on Iran one can understand why....
Note the timing - looks like they're trying to launch the Gulfo at just about the time the Euro may be starting to come apart.
I'm sure that's just a coincidence, though.
exactly. and i'm sure that this news story, which is now well over two years if not three in the making, will mark the death of the dillar and the ascendancy of dirham et al ... by the way, when is that Amero coming out ? hahahah.
has anyone looked at an actual chart lately ??
anyone notice that the dollar is most likely bottoming for 6 - 16 months and that the euro et al are rolling the fju** over?
eh, more iv to capture for those of us who have.
This will be... fun.
Be sure to go shake hands with O before SHTF. Harvey Darden did:
Is the SS playing practical jokes on their man?
http://apnews.myway.com/article/20091216/D9CK7BAO0.html
These are just reminders to Obama not to stray from TPTB's playbook.
the guy's a veteran and he got invited to a breakfast for veterans. it was a nice gesture. not everything's covered with tin mate.
True, although I briefly worked with the SS at a luxury hotel when W came to town back in '06 - they were unconcerned with a few of the potential security breaches I brought up - although to be fair your average Travis Bickle wouldn't have made it. The stuff they do to avoid boredom was funny.
Our enemies don't have to drop bombs on us... just
marginalize our currency...BRILLIANT!
That could have been paraphrased from Sun Tsu's "Art of War"
Those who understand the way of economic warfare cannot lose. Those that do not understand this cannot win. The difference is the whole of art of war.
Problem is that the banking elite and central bankers and politicoes have alienated the entire global populace, as every inhabitant of the planet must pass eventually through the reserve-currency-eye-of-the-needle, and bow down doing so.
They aren't stupid and are seething at the destruction of their saved labour and future potential by financial innovation and fiat.
Doesn't matter whether Club of Rome or Bilderbergs or some other powerful cabal is orchestrating or not, they are outnumbered by pissed off, if somewhat ignorant masses.
The new Bastille day will chop the heads off of Carbon Taxes, Bretton Woods II+, and the conspicuous consumption of the plundering class, and the transparently garbage agendas.
They may wish to stay behind security gates in highwalled mansions because their ability to mix freely will be no longer. Steal our money and then walk about pretending it didn't happen? No Ma Fia is greater than the moral outrage of billions.
It could easily read "The Squid is skilled in both planning and adapting and need not fear the result of a thousand trading days, for they win in advance, defeating those that have already lost".
since pretty much through all time we're the bomb droppers, i'm glad to see that someone found a non-violent resistance :)
Lets see now... 12,000+ underutilized strategic and tactical nuclear weapons at our disposal with a president who is not afraid to spend 100 billion dollars a year to contain 100 Wahabi terrorists in Afghanistan.
I'll bet that if he looked really hard in those "Gulfo" states he may find several thousands more...
Lead liners in your gasoline tanks anyone?
I have to disagree slightly... we marginalized our currency all by ourselves... it is only expected that people will run away from what has no inherit value... and perhaps the Gulf States will create something much more stable. We in the United States have trashed our currency in an effort "save our economy". Would somebody let me know when those Gulfo's are hot off the press... because I have some USD I'd like to exchange for some shiny new Gulfo's.
Team Bush/Obama/Bernanke- MISSION ACCOMPLISHED!
The Destruction of the American Economy and Currency is well underway!
"We are a few days from fundamentally changing the United States of America" -President Obama
Indeed Mr. Obama....indeed....well done our children and their children deeply thank you all!
Team Bush / Bin Laden.
Don't count on this happening anytime soon. These are the same people who built ski resorts in the desert! HAHAHAHAHA!!!!!:))
Not the Saudis. By far the most prudent and experienced of the bunch. They may actually have a shot at pulling this off.....
Nor should one discount the possibility that Dubai World was an organized attempt to defraud the West on a massive scale. If they were going to convince us to invest in their Ponzi scheme, what better than something we all recognize and appreciate, like a ski mountain? Or pretty islands? Or 5-star hotels?
It will be obvious once the default comes and the only ones made whole are the local banks, and Western banks are left holding the bag. It will all then be "regretable" but just business, afterall.
cougar
We have our own Ponzi game going on, and it's a whole helluva lot larger than Dubai's. Simply replace the words "local banks" with "too big to fail banks" and "Western banks" with "you, sucker" and you've nailed it.
More black market gold passes through Dubai and comes out "clean" than anywhere else. Just one of their "sideline" businesses (besides the massive fraud)
Marla OT... I tried finding an old post and had a hellava time. Track isn't usable, you can free-up space with delete history or refer to the post. Thanx
Marla OT... I tried finding an old post and had a hellava time. Track isn't usable, you can free-up space with delete history or refer to the post. Thanx
Yes... and next in the news will be reports of "growing Al-Qaeda activity" in this region, requiring a new and bigger U.S. military presence in these countries. Added will likely be a good dose of reports of "political instability" as it sounds like the time is approaching to swap out these obsolete puppet regimes for some fresher 'royal' blood, eager to move up in the ranks and do what they are told.
Spot on.
dollar dying the death of a thousand cuts
Fed printing
Gold rising
new Gulf currency
Iran selling oil in Euros
China currency swap deals
IMF, SDR's
bond yields up
China stops buying T's
etc
did I miss anything ?
"Gulfo"???!!!
That is a pretty lame name for an International Reserve Currency.
I suggest the "Gulfar", based on the popular Islamic "Dinar". If I am forced to do future transactions with our new over-lords, I don't want want to have to do with a stupid-sounding monetary unit...
Gulfo will sound downright elegant in our "Idiocracy" future.
Gulfo is lame, how about the Oily?
Nice! LOL
The "Aruble" perhaps?
LOL, Nice!
I like Turbano, but will people hold any currency without some sort of backing now? Long time now regular people are going to be hedging with precious metals.
How bout the ultimate in international currency...
A little long, so we could call it the BBGB...or 3BG...
"Backed By Gold Bitchez"
Yo how many gulfo to the amero?
So when the Fed runs out of foreign currency to sell, how's Man-of-the-Year going to prop up the dollar? No more short squeezes.
Here's the answer:
http://www.theage.com.au/national/joyce-warns-of-bigger-gfc-20091022-hbg...
Y'know as all these plans are implemented for a world without the dollar, I begin to feel like the worst case scenario for US is to have a multi-year recovery. If the world economy progessses relatively smoothly for the next few years then by 2012 there will be institutions and contingencies in place that won't rely on the dollar or Fed largesse to stabalize economies outside this country.
It would have been far better from a US perspective if we went ahead and had the global collapse while we were still (just barely but still) on top. I cannot imagine the concessions that will be extracted from US if a collapse comes and other countries have room to manuever while we have our hands out.
If a collapse comes (few minutes to midnight at this point) no fiat currency will survive. Everybody will have to make concessions in a very different game: don't expect the current rules to work after midnight.
I hope this charade ends sooner than later - my liver hates me as it is.
Me too, but I think we have another couple of years of slow motion death to keep us entertained.
I recommend cannabis over alcohol -- It is far, far better for your body, brain and mind, provided that you use it prudently.
Indeed, and you will help British Columbia's economy, or Cali's, or if you are cheap, Mexico's!
Of course I recommend you support the BC economy!
I would imagine a $100 could be spread over two months of usage.
The idea of the lazy stoner is just a stereotype lazy people gravitate towards. Marijuana not only helps you cope with what passes for 'reality' these days, it makes it easier to spot the blatant contradictions and hypocrisy as well!
http://www.youtube.com/watch?v=QHFK1yKfiGo
This is the end
beautiful friend
This is the end
My only friend, the end
Of our elaborate plans, the end
Of everything that stands, the end
No safety or surprise, the end
I’ll never look into your eyes
Again
Can you picture what we’ll be,
So limitless and free?
Desperately in need
Of some stranger’s hand
In a desperate land
Golden Rule: He who has the Gold makes the rules, but
He who has the guns takes the Gold)
Didn't the Shah propose something like this shortly
before he was deposed? And Saddam Hussein wanted
to stop selling in dollars before Gulf War II?
This isn't going to end well...
TruthHunter (but no hunting license. Truth Poacher then?)
Thanks TH. I continue to wonder about the gold argument. Like why is there even one?
What is it? Will you exchange it for more fiatsos in the future?
Or will you hold on to it and use it for what?????
To buy things??? After the shit hits the fan???? For use during the brief period before chaos takes all????
If people know you have gold stockpiled they will come for it and kill you if you don't give it to them. Or lets go action movie sequence: you kill a few of them and they run off. Later they come back and kill you and take your gold.
Strength will be in numbers. Who can you trust for your team?
In every crisis there is opportunity. I just pray we do not get another Hitler.
that's the problema, you pray
And you fiasco on the other hand do what? Mumble like you are some drunken Italian cartoon?
Palin.
Wow. "The dollar has failed".
Approximately,
1/3 of the world's currency is FedReserveNotes held in USA
1/3 of the world's currency is FedReserveNotes held OUTSIDE the USA.
1/3 of the world's currency is foreign currency.
What happens when the 1/3 of worlds currency (FRN$) held by foreigners, is regarded as "failed" and is repatriated in the USA to buy American goods/real assets/commodities/equities?
I-N-F-L-A-T-I-O-N. Spell it out.
Dollars rushing out as they all come to drop them off and take our stuff. Inflation # wise, inflation confidence wise.
We will wish for the days of deflation.
Credit/apologies to Neil Young, "Damage Done"
The Dollar's Done
We caught you printin' ever more and more.
Can't stand your lies, we're showin' you the door.
Ooh, ooh, the dollar's done.
Thought I'd retire when I got old.
Now I find myself hoarding gold.
Gone, gone, the dollar's done.
Ben Bernanke says he has a plan.
But we're all too dense to understand,
Our money isn't for the common man.
We've seen QE and the damage done
A little part of it in everyone
Dollar junkies are like a settin' sun.
Not bad. Now do "Heart of Gold".
How about calling the new Gulf note the "Sand Dollar"?
Nice.
With coins called "Silicon Chips".
this no happen tomorrow and productivity make-a one wealthy
not a man wrapped in a curtain with-a bag of gold coins
fuck-a the pussy, watch-a the football, and laugh at religion and ideology, the thing-a the stupid-o masses like-a to hear.
hey marla! anybody fuck-a you these days? my cousin luigi sometimes-a sits-a and stares at his pepperoni stick because-a he has the lust for you. are you a man? if you a man-a we have a big laugh with luigi.
Hey I hear they have English classes at most local Educational institutions, maybe you could sign up for some free tutorails.
Then after that if you will travel down here to Arkansas we will give you some instructions on how to properly approach a Lady.
Then for some light entertainment we will catch movie over at the Drive-inn movie theater, this week they are showin Deliverance... it's a love story.
Or better yet, fiasco swallows a bottle of ludes and dies.
hey, luigi
a critic of my comments
ripped chunk wants-a fiasco to die
can you read that anywhere else-a but the interneta
i told-a you to investa in the new media, stupido!
Hey Mario! Come on! Live a little. You and your brother and some of Tiger's cast offs with some Black Jack and some ludes. Party brother. Get unconcious for a while. Maybe things will be different if you wake up.
Sownds lyke Looigi has dun kornholed u, up tha butter hole of tha anal abiss
Right on the mark TruthHunter, I'm pretty sure Iraq will be taking dollars/ameros for the indefinite future. The US could always call in their 70 years worth of military/economic support for Israel chips to have them do the dirty work too.
The US military is the only thing that keeps the middle east kings/etc in power and safe from the other world powers who want their wealth. Saudi Arbria will protect the US dollar, buy US Treasuries and sell oil at reasonable prices in return. The Saudis only care about protection and staying in power.
Bullshit - they have demanded gold and received it for years in order to keep pricing oil in dollars. If that game is coming to an end, then they will play a different one.
I wouldn't dare say that someone has a `stick up their asset` about a certain debtor from the land of sand.... Nor would I dare to say they are beating a dead camel. No, I wouldn't dare.
Hello.
What a lovely asshat. Welcome!
The whole thing sounds really fishy to me. They've been relying on the overall stability of the USD for 50 years because their own region cannot hold itself together for more than 5 minutes. The current gyrations not withstanding, how will a Gulfo reserve currency handle the first time some young prince deftly eases his way into the Saudi Sultanate via ceremonial dagger?
cougar
That worked when the dollar was stable, but apparently everyone in the world except you has figured out that the dollar is no longer stable.
No, in this regard he is absolutely correct. A monetary union will never work without political harmony - as in the case of West European countries (however, this crisis is putting a strain on that harmony in the form of protectionism, so we shall see).
As for this new petro-currency, it may displace the US dollar where oil trade is concerned, but it does not qualify as a global reserve currency, or even a sound investment vehicle (ie, volatile geopolitical situation). A global reserve currency must be backed by underlying factors which enable that currency, and the associated country, to act as a nucleus upon which international trust can grow.
Factors such as trade hegemony, military superiority, cultural/political/technological advancement; any combinations thereof. Finite oil resources alone are insufficient.
All the more reason to dump the sheiks and they're harems.
Go to ethanol production full bore. Just like Brazil did.
Brazil the economy growing and growing.
It's not brain surgery . Produce our own fuel and the money stays here. Not in the banks of the M.E.
Let's use our strength. We grow things really well here.
Ethanol is the cure. Our farmers become rich ,the business'
around them prosper, and people are hired.
South America says, "Me too." This from the most depressing and maddening site on the web, http://www.globalresearch.ca/
"The member nations of the Bolivarian Alliance for the Americas, ALBA, have decided to give up the US dollar in trading between them.
They will instead use the sucre conventional monetary unit. The first international sucre transaction has already been made, with Cuba signing a contract with Venezuela on buying a consignment of rice.
The agreement on a single system of regional payments is to be signed during an ALBA countries’ summit due in the Venezuelan city of Kumana next April.
The financial mechanism will become operational next year to promote dollar-free cost-accounting.
The ALBA alliance comprises the Latin American and Caribbean nations that seek to promote trade and cooperation among the participants and counteract the continually US-advanced free-trade areas. The ALBA alliance was initiated by Hugo Chavez and Fidel Castro back in 2004."
And next year they will be delighted at the outcome when 1 Gulfo =
1,000,000,000,000,000,000,000,
000,000,000,000,000,000,000,000
000,000,000,000,000,000,000,000,000,
000,000,000,000,000,000,000,000,000,000,
000,000,000,000,000,000,000,000,000,000,000 dollars
Do I even need to say it? Oh, alright.
GOLD BITCHES!!!
I am Chumbawamba.
I continue to wonder about the gold argument. Like why is there even one?
What is it? Will you exchange it for more fiatsos in the future?
Or will you hold on to it and use it for what?????
To buy things??? To exchange for things????? After the shit hits the fan???? For use during the brief period before chaos takes all????
If people know you have gold stockpiled they will come for it and kill you if you don't give it to them. Or lets go action movie sequence: you kill a few of them and they run off. Later they come back and kill you and take your gold.
Strength will be in numbers. Who can you trust for your team?
Ripped Chunk,
Your pretty dense, aren't you. Have you ever read any history? There is but two things that have held value at all times and for as long as there are records of exchange. Guess what they are...
Or are you trying to tell us that thousands of years of human actions are going to suddenly be forgotten? there is always a need to exchange goods, there will always be something used in such exchanges.
For some reason you seem to think history will have any bearing on what lays ahead?
I lay 20:1 166442 and his gold stock are killed in the first violent wave.
No more rules idiot. I am dense so you better aim for the heart not the head.
hey,
we hear-a this discussione before. why don't you-a pay attention.
it goes-a like this: if everythinga is so bad, then nobody agree-a on anything-a, including gold is money.
but the gold bugs have one foot in the regular economia and one foot in the paranoida world of the people on the interneta
but gold is a store of value when currencies are getting adjusted, but the people are getting the storia of paranoia because they like the drama.
ok stupido
stop this agrumenta now
Ripped Chunk & fiasco,
Your pretty dense, aren't you. Have you ever read any history? There is but two things that have held value at all times and for as long as there are records of exchange. Guess what they are...
Or are you trying to tell us that thousands of years of human actions are going to suddenly be forgotten? there is always a need to exchange goods, there will always be something used in such exchanges. Or do you think this is the first time there has been a monetary collapse in the world?
pussy and slaves?
i know-a you religious fanatico
gods-a have existed for thousands of years but we know they are bullshit.
try again-a to explain yourself per favore
but try-a to keep-a moses and the ark out of it-a
Agree with Greyzone 100%
You are truly dense fiasco. Hope your faith in the all mighty glory of the dollar works out for you, but about now, after reading the countries balance sheet (if you are capable of such), I'd be getting a bit worried about what our esteemed leaders have planned for you.
So, let's see...
4,000 acre producing farm fully paid for (worth quite a bit more with the brilliant idea of turning food into petro & love the wind that blows over it as that too is turning out to be quite profitable) and two professionals making enough to live on leaving farm income to be invested, so - US $ needs more then met - check
Overseas investments in local currencies to hedge US dollar crap out. - Check
Gold & silver (physical stuff, not the cheesy paper trader kind) for long term storage of gained wealth and usability literally anywhere in the world for the entire history of the human populated world. -Check
Stored staples for a few months needs in case the JIT system crashes and burns (while not particularly religious, spouses family descends from the Mormons, such in that group is considered a general no brainer kind of requirement - and one should listen to knowledge gained from a group who has experience in the world crapping on them...) - check
So I'll let you continue playing with your paper profits and funny money, and I will continue to hedge my bets every way I can. Guess we shall all see who had any brains and whose "religion" got in the way of any common sense.
hey-a you-a stupid-a fucka you-a have-a serious a problemos
Gold holds value for trade for the first month or two or three while the groups mass.
Then you find a bunch of corpses shot in the front and back. People with their hands in the air, hands ripped off or cut off as they apparently had been holding something in their hands in an attempt to barter their way out of the violent onslaught.
Yea I'm plenty dense.
Who is coming back in what numbers? With what fuel? Using what aircraft or ground vehicles maintained with what parts? With what weapons? With what supplies?
The anti-gold argument relies on silly "action movie" concepts and particular ones at that, such as the lone hero fending off hordes of zombies. There are so many variations on preparing for social collapse caused by financial collapse that any simplistic analysis taken as a gospel dismissal of preparation merely marks the originator as an unoriginal thinker.
1. Do you want to prepare?
2. What are the scenarios for which you will prepare?
3. What are your priorities?
Let's take a hypothetical example. Say we want to prepare for a Zimbabwe style hyperinflation. That statement alone is not sufficient in and of itself. We have to ask ourselves what effects do we expect such a hyperinflation to cause? Will fuel be available? Prescription medicines? Food? Tools? Parts? Weapons? At what cost? Will barter become viable? What are likely to be high demand bartered goods? From historical example some such goods were toilet paper, seeds, ammunition, liquor, cigarettes, tobacco, tea, coffee, and salt. That list is not definitive but it demonstrates the breadth of what people will generally consider a "good trade". What goods have served as temporary currencies in the past? Silver coins, small weight gold coins, ammunition, cigarettes (in WWII). That list is also not definitive but demonstrates the inventiveness of people in trying to develop useful arrangements to conduct at least rudimentary forms of business.
Once you have developed your list of scenarios and then fleshed each scenario out to include expected effects (maybe the JIT supply chain breaks down) then you can start developing a "list of lists" appropriate to handling these scenarios. Your list of list should be about categories of things you can do to minimize the level of disruption to your life. Shelter, food, water, tools, clothing, etc. A good list of lists might run 30-100 separate categories once you get it set up. Then create a list of actions and items you want to procure for each category. One action might be to find property and a job in a small town at least 2 hours driving distance from any city over 100,000 population. Or you might give yourself an action item to find or found a neighborhood watch team in order to get to know your neighbors and to start actually looking out for one another.
If you buy a case of freeze dried meals, a gun, a box of ammo, a camping stove, and a sleeping bag you must not be expecting much more than what happens each year on the Gulf coast when a hurricane hits. But is that really going to be enough if the entire JIT chain collapses and the US government becomes dysfunctional due to lack of useful spending power (dollar collapse)?
If you actually believe that the Schumer is going to hit the fan, you can stand there and get caught in the resulting hail of shrapnel. That's fine and your choice but don't expect someone else to yank you out of the line of fire. Or you can actually start thinking about the likely scope the problem and what you need to do to actually prepare. If you do that, you'll discover that gold goes way down on the priority list after a whole lot of other real world issues get taken of first. But once those are taken care of and if you want to preserve additional wealth through a currency collapse, what are you going to do? Buy another currency? Which one? Or buy the one thing that has held its value since civilization arose thousands of years ago in the Middle East? I think the answer to that question is pretty obvious.
"Learn it. Know it. Live it."
Thank you, Mr. Grey.
The pieces are in motion.
You seriously overestimate the human animal.
I gave this some thought (and now deleted blogging) a while back.
All of the following is just unfounded opinions and IMHO.
IMHO - The Gulfo will be a properly collateralised currency (gold, oil, various industrial metals and a basket of currencies for clearing trades. The basket will be based on the amount of trade that their customers do with different countries).
IMHO - It will also respect Sharia law. The whole thing has already been tested in a western context (England) by a couple of banks (for instance, Lloyd's and HSBC). It works just fine - if GS, the Fedup of the Year and the rest of the bums can't trash and (expletive deleted) around with price discovery on your Sharia turf.
http://www.guardian.co.uk/money/2006/jun/13/accounts.islamicfinance
IMHO - Price discovery, collateral and value are at the core of the banking. Mess up your customers and you literally get your head chopped off (Hi Ben, Tim, et al). Bonus Time is a two-edged sword, if you will.
IMHO - The currency will be useful for large commodity transactions. It is very easy to expand and contract the money supply if all of the deals are actually reflecting the movement of commodities (ie self-collateralising deals).
IMHO - The Gulfo will be on a moving peg and their central bankers will trash anyone who wants to try and speculate with the currency. I wouldn't be surprised if a gold convertibility clause was add for private citizens (ie you can request the gold at today's price but you have to wait until the bank gets around to delivering it a month or year or whenever it is deemed appropriate later - stops speculators). IMHO this is a good thing.
IMHO - The Gulfo central bank will also provide a direct competitor to the BIS. In other words, the US won't have access to the transaction information. Which will make the bank very popular.
IMHO - The Hawala concept will be central to the movement of money. It means that nothing has to move except the goods of a deal. No paper trail unless one of the trading parties reneges or mis-delivers. A phone call will probably be more than enough to cover most of the biggest deals. People do business with people.
IMHO - How will the US respond? Currency swaps at the Fed. There is no USA any more. There is just the Fed.
(As some of you know, I have my little idea for saving the USA. Nothing I have seen has made me change my mind.)
IMHO - Finally, I doubt it will be called the Gulfo. Somebody is just trivialising the move into the new GCC currency. I wouldn't be surprised if the actual future name translated into the word "trust" in English.
all the best and many happy Gulfos from
Namke von Federlein
"IMHO - How will the US respond? Currency swaps at the Fed. There is no USA any more. There is just the Fed."
In the back of my mind there is always the Feudalism option. True the army cannot be paid because of the failure of the dollar, but there is always the outright taking of natural resources through war. Acquire the oil wealth and the herioin wealth through force. Take other natural resources as needed. The US Military has already had its practice in Iraq and Afganistan. If you recognize the increase in 7 US bases in Columbia, South America over the last year, it doesn't take much to see the taking of Venezuala oil. These things are already in place. The dollar fails = World War III and the US and Nato will orchestrate it.
Well, it's an interesting situation.
First, pirates in Yemen can still manage to hi-jack large boats. Have you ever wondered how they manage to do that with all of that fire-power in the region from the super-powers? The US military can attack the area but they can't control it. There is absolutely no goodwill now. They would have to kill everybody to win (hey - I heard that...). Huge bribes and massive military threats now buy temporary control of a small city.
Second, it looks like the first 3 months of next year are going to be hell in the USA (and the USD). Retailer bankruptcies and closings in Jan-Feb will hit CRE which will put the FDIC in overdrive and force QE2. Then it is tax time in April. Do you think that tax receipts will spook people?
Third, the US needs a decent currency for trading commodities as much as anybody else right now. The USD can't be used for pricing (nobody knows how many USD - real and counterfeit - are booked and leveraged in circulation). And the US can't issue the new USD currency (to create a useful money supply number and default the rest) until the USD is not central to commodity trading.
Fourth, the US isn't the only buyer for oil. Europe, China and the rest of the world would not tolerate the US expropriating the supply of oil (not to mention OPEC and also the FOIC). The US strategy in the region (IMHO) is tolerated because a) the volatility creates lovely profits/scimming for western banks and b) nobody feels that the US will ever win - so the end effect is a constantly weakened USA. Basically, the US Army in the region is just being used by the locals - in a polite way - as a mercenary army?
Fifth, an oil shock that lasted several months would be enough to instantly tip the US into civil war. Gas at $20 a gallon, anyone? Iran knows this?
Sixth, the cost/effect ratio of weapons is now very high. Very low cost can produce very high effect. I would suggest that the US is only protected by the fact that the enemies of the US are organised (and hence visible). Homeland security last year already tagged "Lone Rangers" in the US (angry citizens) as the biggest security threat to the USA. Try stopping "Lone Rangers" from all of the countries that don't like the USA. You can't. You have to give them hope - a reason not to attack. When the hope is gone - so is the defence (Obama take note?).
Lastly, a proper currency (pricing mechanism) for oil and other commodities will probably do more for peace in the region than all the guns in the world.
My biggest worry (for the last 2 years!) is that the (IMHO inevitable) hyper-inflation in the US is going to take off before the GCC can get the machinery of their new bank up and running. So far, everything seems to be melting down in the US as predicted. Hyperinflation T minus 3 months and counting.
Think of it this way : I want to sell you 200 billion of steel over the next 3 years and I want to buy 200 billion of oil from you. Why do we need a currency?
Pricing and productivity.
It's not only up to the "real" banks (ala Glass-Steagall) to leverage collateral. It's up to business to leverage receivables. When the Fed finally understands this, then maybe the NDCI idea will make sense to them. This IMHO is what Volker is - perhaps - partly trying to say when he says things like (I paraphrase) "too much consumption, not enough production"
IMHO - The Fed has made it impossible to price anything at all in USD. Companies can't price stuff reliably. Which means they can't leverage their productivity. Adding liquidity (and ridiculous guarantees on price-to-disaster FACB rules) to this situation just ensures that pricing stays impossible. The pricing unit itself (dollar) adds way too much risk for long-term pricing commitments.
Anyway, my blah blah blah. I hope this proves inspiring to the collective brainstorming.
May all beneficial wishes come true in beneficial ways! In particular : May hard-working Americans be freed from IMHO horribly irresponsible fiscal, monetary and economic (mis)-management - soon.
Namke von Federlein
"I have my little idea for saving the USA."
NvF, consider me curious. pls share a link to the little. danke.
It's a very poorly expressed idea but the basic premise is simple.
First, it's not just debt that is smothering the USA economically. It is the cost of servicing the debt (interest payments).
Second, borrowing more money (in the name of taxpayers) and giving it directly to private interests (the "banks") is, basically, stealing from citizens.
In the USA there are 2 key problems at the same time. One is rebuilding household balance sheets. The other is recapitalising the banks.
So, if the government is going to borrow a couple of trillion in the name of taxpayers it should use that money to pay off the debt of citizens. This would not reduce or increase the total debt of the nation (government debt goes up by 2 trillion, household debt goes down by 2 trillion).
It would 1) dramatically reduce the burden of the debt (example : 30% APR becomes 3% T-bonds. I figure it would reduce interest payments by some 300 billion per year) 2) take 2 trillion of high-default-risk consumer debt off the books of the banks 3) at the same as it adds 2 trillion in capital onto the books of the banks and 4) unwind about 40 trillion of the worst of the derivatives (headroom).
The next key point : these problems affect every single citizen and bank in the US. The structural problem is not "domain specific".
It would seem that the current US administration is still using the "Father Knows Best" strategy to attempt to micro-manage specific economic problems.
So, what to do? The idea is called the Namke Debt Consolidation Idea. It would restructure the debt of the US. The idea is simple, fast, easy-to-implement and just.
If you want to check out the details then visit :
http://emsjuwel.com/business/2009/10/14/namke-debt-consolidation-idea-fo...
In any case, we know one thing for certain. The "standard" solutions are just making things worse.
all the best from
Namke von Federlein
I would agree with most of your predictions, except with the direct competitor to the BIS. I would think the BIS would adjust to the times with either more collateral or the illussion of it. If they do become competitors I would imagine it would eventually lead to war.
Either way, these are all legitimate possibilities.
Not a chance in hell this is going to fly (very far).
Nobody gives a rip about sand, and this will only accelerate the clean and domestic energy movement away from oil.
The "gulf states remain divided over the wisdom" because they don't have any choice but to keep on pricing oil in dollars, not sand.
I only encourage all saber rattling from the Middle Keaster.
Spend on CCS/clean coal/gas to liquids and diversify away from Gulf oil. See how long the Gulfo lasts then. These fuckers haven't done a productive stroke of work for the last 120 years.
If you own gold what will you buy? I would trade you 2 cans of carrots for 1 ounce of gold. After all, I cannot make change. Or I'd trade 1 can of carrots for one piece of silver. So in the first situation you'd be paying me 600 dollars a can. In the second you'd be paying me 20 dollar a can. And since I have neither gold or silver, only can goods, my cost is 1 dollar per can. Pretty good way to become rich. Oh, yeah, I don't sell my bullets I give them away for free to those who try and take my food if they can even find it. Best way to survive a collapse of our system is to stay hidden and let the fools kill each other and then the rest die of starvation because they produce nothing of value and are consumers. After, all if the dollar fails there will be no food at the local grocery stores so everyone will be fighting for survival of their families. Oh, and after the collapse and destruction of society I will have fun using my metal detector to find all the hordes of gold buried by dead fools.
To learn more about global currencies and banknotes visit the blog http://www.globalpapersecurity.com