Community | October 08, 2009 | 7 comments

U. S. Dollar, The new firestarter?

source: http://barelyablog.com/?p=15137

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akamaial
A new spike has sent the cost of the precious metal to a level not seen before. The dollar slid sharply after yesterday's report in The Independent that Gulf Arab states are secretly planning to stop trading oil in dollars, and a senior UN official said that the US should be stripped of its position as the main source of currency reserves for other countries.

The price of gold is surging on world markets amid fears that the old economic order based on the supremacy of the US dollar could be breaking down.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank.

The biggest driver of global economic instability in recent years has been the determination of China to boost its export sector at all costs. Beijing's persistently large trade surpluses and manipulation to prevent its own currency from appreciating have effectively forced Western nations into running persistently large trade deficits. It was this pressure that blew up various asset bubbles that burst with such disastrous effect last year.

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."
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  2. tags:
    Economic Collapse,  News and Politcs
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7 comments // U. S. Dollar, The new firestarter?

  • sesml2001
    • 0
      sesml2001  

    • This seems very in tune with that old matra about a New World Order under the UN, since we keep hearing calls for one world currency, one world religion, and one world rule of law- thus one world government whereby every country surrenders to the will of the UN and eventually removing the overriding veto power from super powers. Thus making everyone a citizen of the world not of a country and giving up individuallity.

    • 2 years ago
  • Follow_me
  • akamaial
  • TTrahan
  • galwayman
    • 0
      galwayman  

    • It's no surprise that this has happened for too long we've printed money that's worthless and nobody republican or democrat has enough of a brain between them to know better.because of an idiotic foreign policy everybody hates us.we have given our resources away to other countries with nothing to back it up while americans went without! instead of positive change we get more of the same.we don't tax the very rich,we don't tax religions, we haven't found new ways to jumpstart the economy,but continued the same failed policies which brought us to this point! what did you expect would happen?

    • 2 years ago
  • bbar
  • akamaial
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