Greenspan tells Gulf to drop dollar

[bemildred]

Source: al Jazeera

Alan Greenspan, the former chairman of the US central bank, or Fed, has said that inflation rates in Gulf states, which are reaching near record levels, would fall "significantly" if oil producers dropped their US dollar pegs.

Speaking at an investment conference on Monday in Jedda, Saudi Arabia, he said the pegs restrict the region's ability to control inflation by forcing them to duplicate US monetary policy at a time when the Fed is cutting rates to ward off an economic downturn.

Debate is rife in the Gulf on how to tackle inflation.

Levels have hit seven per cent in Saudi Arabia, the highest in 27 years and a 19-year peak of 9.3 per cent in the United Arab Emirates in 2006.

Read more: http://english.aljazeera.net/NR/exeres/FC515689-75CC-4121-BD37-2A84E5BF0C60.htm

[Taverner]

1. Wow...nice that we know who's side he's on at least

[Zorra]

14. Yep. He's a wealthy fascist globalist, on the side of wealthy globalist

fascists.

[damntexdem]

15. Yes, he has no doubt whose side he's on.

But will the Gulf buy all of his snake oil? After all, they have plenty of oil of their own, already. ;-)

[katty]

2. not surprised it's greenie calling for this--and then

after you do this, let's all head to Dubai and hang-out.

[Delphinus]

3. That's *THEIR* inflation rates ...

what about ours? What will happen to us when they drop the dollar (devalued as it is)?

[bemildred]

4. Well, I don't think it will help the cost of oil much. nt

[barb162]

5. Inflation here could go close to out of control.

[DLnyc]

11. They are talking, apparently, about letting the dollar get weaker against their

currencies. That would mean dollar price of oil would go up, in order to pay a steady Saudi/Dubai/etc. price.

Basically, our prices for foreign goods go up, but it also gets easier for us to sell our stuff in foreign markets.

Until other countries start blocking our goods because our weak dollar policy is seen as unfair to them.

[MannyGoldstein]

6. Surprise!

Greenspan will do anything for a buck, including the completion of his part of the sodomization of the US Middle Class.

BOHICA, baby. We keep voting for this stuff.

[Lone_Star_Dem]

8. Make that do anything for a euro

Buck is slang for an American dollar. Obviously Greenspan has removed his assets from our quaint currency.

[Earth_First]

7. Care to place bets on which currencies Greenspan is heavily invested? n/t

[cliss]

9. The Gulf states really have no choice.

These oil producing countries have pegged their currency to US dollars. These past 2 years, they have seen a huge amount of inflation happening in their countries.
It's due to the US dollar which is depreciating faster and faster. these countries get big infusions of Petrodollars from their oil sales. To quote Ahmadinejad, "They get our oil and we get worthless money".

All these countries have multiple problems: a large, young population (exploding population). A large unemployment problem.

Add to that spiraling inflation, which means that their purchasing power is eroded more and more = a powder keg, ready to blow.

They will be forced to untie themselves from the dollar, and watch out when that happens.

[roamer65]

10. I expect Hong Kong and China will drop their pegs after the Olympics.

Inflation is well over 7% in China now. They'll drop their dollar pegs and allow the currencies to float in order to gain purchasing power.

[olddad56]

12. it will all be better when we standardize on the Amero...

goggle Amero. Adios amigo.

[Amonester]

13. Canadians will want the queen's face on it!

And also, the US will have to learn how to use conversion factor tables http://www.cod.edu/DEPT/Chem/POC/DATA-TABLES/Convers/ConvK-N.htm#K
Oh! And yes, get out of Iraq will be another pre-requisite from Canadians.
:woohoo: