"In the most profound financial change in recent Middle East history, 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."
"Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018."
"'These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate.'"
"Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq."
"Big oil producing nations denied a British newspaper report on Tuesday that Gulf Arab states were in secret talks with Russia, China, Japan and France to replace the U.S. dollar with a basket of currencies in trading oil."
"The dollar eased in response to the report, which was written by The Independent's Middle East correspondent Robert Fisk and cited unidentified sources in Gulf Arab states and Chinese banking sources in Hong Kong."
"The future of the dollar is very shaky indeed, and if history is any guide, the dollar has no where else to go but down from here on out. People talk about deflation pressures in the next year or so, and they are right to do so, but serious inflation, perhaps hyper-inflation, is the only possible outcome longer-term."
"Here’s one version of what may happen: As time goes on, it will become clearer to China, Japan and others that investing in the United States is a waste of time. Inflation will be eroding the value of their dollar reserves. . . . The demand for dollars will slow considerably, and there may even be a headlong flight from the dollar. . . ."
"No one can no how all this will play out, but I find little room for optimism regarding the dollar’s longer term future."
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