The Diminishing Dollar

[Pharaoh]

The Diminishing Dollar
Written by Charles Scaliger
Thursday, 29 October 2009 01:00

It began as a series of explosive claims in a British newspaper on Tuesday, October 6, and quickly turned into an all-out rout of the already beleaguered U.S. dollar on international markets.

By early October 2009, the price of gold, off for several quarters from its all-time highs reached in March 2008, was back above the $1,000/ounce level, driven by concerns that the Federal Reserve’s inflationary activities might seriously undercut the dollar’s strength.

Then the bottom fell out.

The catalyst was a brief article, “The Demise of the Dollar,” by investigative journalist and longtime Middle East expert Robert Fisk, writing for The Independent. Fisk revealed that a coalition of oil-producing Middle Eastern states were holding secret negotiations with the likes of France, China, Russia, Brazil, and Japan to end the decades-old system whereby oil is bought and sold exclusively in U.S. dollars. The plan now being drawn up is “to end dollar dealings for oil,” according to Fisk, “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.” The new regime is to be phased in over the next nine years, the article claimed, with 2018 the target year for the dollar’s final phase-out.

In response, the dollar began to plummet against gold, and by day’s end gold had reached new record highs. Throughout the week, in spite of heated denials by various international financial insiders that any such plan to dethrone the dollar was afoot, the trend continued, with gold breaching $1,050 per ounce by Friday and settling at new all-time highs by week’s end.


http://www.thenewamerican.com/index.php/economy/economics-mainmenu-44/2160-the-diminishing-dollar