More US Debt? World Gov on the Way? Arab Oil-Rich Friends Creating Common Currency

Posted on December 17, 2009


 

The US has much less gold and much greater debt. Will the Arabs cover our loans if neeed?

We woke up to a changing landscape in the Middle East.  Our oil-rich “friends” in the region are busy creating an European Union-type currency. That could leave the dollar in the dust:

The Arab states of the Gulf region have agreed to launch a single currency modelled on the euro, hoping to blaze a trail towards a pan-Arab monetary union swelling to the ancient borders of the Umayyad [sic] Caliphate. [Telegraph]

No state in that region has forgotten the days of the Caliphate.  All of radical Islam wants to re-establish and expand it.

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.

……………………………………………..

Khalid Bin Ahmad Al Kalifa, Bahrain’s foreign minister, told the FIKR Arab Thought summit in Kuwait that the project would not work unless the Gulf countries first break down basic barriers to trade and capital flows

…………………………………………….

Yet hurdles are formidable even for the tight-knit group of Gulf states. While the eurozone is a club of rough equals – with Germany, France, Italy, and Spain each holding two votes on the ECB council – the Gulf currency will be dominated by Saudi Arabia. The risk is that other countries will feel like satellites. Monetary policy will inevitably be set for Riyadh’s needs.

………………………………………………………..

Ben Simpfendorfer, Asia economist for RBS and an expert on the Middle East, told the FIKR conference that the rise of China had paradoxically disrupted the case for pan-Arab economic integration.

There was a natural fit ten years ago between rich oil state and low-wage manufacturers in Egypt and Syria, but cheap exports from China have forced poorer Arab states to retreat behind barriers to shelter their industries. “The rationale for a single currency has become weaker,” he said.

The GCC also agreed to create a joint military strike force – akin to the EU’s rapid reaction force – to tackle threats such as the incursion of Yemeni Shiite rebels into Saudi territory earlier this year.

This is a major breakthrough after years of deadlock on defence cooperation.

The Sunni Gulf states are deeply concerned about the great power ambitions of Shiite Iran and its quest for nuclear weapons, to the point where the theme of a possible war between Iran and a Saudi-led constellation of states has crept into the media debate.

They nevertheless repeated on Tuesday that “any military action against Iran” by Western powers would be unacceptable.

Our men have fought to maintain the autonomy of the above-mentioned countries. But this move and the last phrase in this article puts our close relationship at risk.

Further investigation reveals that the above move has been approved by the IMF.

The new currency will initially be limited to members of the Gulf Cooperation Council, which includes some of the most wealthy nations on earth. The GCC Gulf comprises Saudi Arabia – the world’s most important source of oil, as well as Bahrain, Kuwait, Oman, Qatar, and United Arab Emirates. [The Insider]

The Insider poses the question: will the continued development of these kinds of Unions, are we moving toward a world government.

The early years of the new millennium will be dominated by the great institutions of world unity, United Nations, the United States of America, the United States of Europe, and the United States of the Gulf. When the unification process is complete, how many separate groups of unified nations will exist?

Does this latest round of international unification bring mankind closer toward the United States of the World?

______________________________________

VotingFemale Speaks! – Socialist Extortion of Sen Nelson? Vote for ObamaCare or Offutt Air Force Base will be closed; so says Michael Goldfarb