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ThoughtfulFool (< 20)

Gulf Cooperation Council to create new currency

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January 01, 2009 – Comments (2) | RELATED TICKERS: UUP , GLD

The breaking of their dollar pegs by the Gulf Arab nations is clearly dollar negative. Any inclusion of gold either as a part of the monetary basket, or in the reserves of the new GCC Central Bank will create additional demand for the precious metal.

From http://seekingalpha.com/article/112731-will-the-new-gcc-single-currency-include-gold:

Gulf Cooperation Council leaders yesterday concluded their 29th annual summit meeting in Muscat, Oman with a final approval for the creation of a single currency for the six-nation economic bloc, still targeted for 2010.

Saudi Arabia is the largest economy in the GCC and boasts substantial gold reserves. But whether gold will be included in the currency basket has not yet been decided.

Golden opportunity

GCC assistant secretary-general Mohammad Al Mazroui told Gulf News: ‘We first have to decide on the location of the Central Bank, then the Central Bank and Monetary Council will have to decide on the gold reserves for the Central Bank’.

The creation of the GCC single currency - likely to be known as the Khaleeji which means Gulf in Arabic - is a major gold event for two reasons.

First, the breaking of their dollar pegs by the Gulf Arab nations is clearly dollar negative. Secondly, any inclusion of gold either as a part of the monetary basket, or in the reserves of the new GCC Central Bank will create additional demand for the precious metal.

2009 deadline

The project is gathering pace, and no lesser a figure than Saudi Arabia’s King Abdullah has directed that GCC economic integration committees speed up their work and complete the whole exercise by September 2009.

It is only a couple of months since a group of Saudi businessmen allegedly bought $3.5 billion worth of gold, believed to be the largest ever single transaction for the precious metal. Perhaps in 2009 it will be gold rather than local currencies which become of interest to speculators about monetary reform in the GCC.

Gulf countries are keen to break away from the link with the US dollar because it ties them to inappropriate monetary policies that exaggerate the boom-to-bust cycle in their economies.

2 Comments – Post Your Own

#1) On January 02, 2009 at 10:09 PM, MontgomeryScott (< 20) wrote:

I linked to the original article, from Seeking Alpha, to follow up on this monumentous announcement, and found, through external research, that this is, indeed true, at least in the postings of The Daily Star, the 'local' English financial and oil paper of the Middle East.

'Seeking Alpha' answered their own question in the seventh paragraph, when they stated the fact that 'It is only a couple of months since a group of Saudi businessmen allegedly bought $3.5 billion worth of gold,...'. NO, the grammatical errors are THEIRS!

The last sentence (also known in S.A.'s educated prose as a 'paragraph') tells the TRUE story of this press release:

"Gulf countries are keen to break away from the link with the US Dollar because it ties them to inappropriate monetary policies that exaggerate the boom-to-bust cycle in their economies." Again, the quotations are theirs, and I won't be held accountable for their third-grade level of writing, as I comment on the article.

According to the US Department of State, Oman coordinates with OPEC in price hikes and reductions of oil. Bahrain is the leading Islamic finance center in the 'Arab' world, and was the first Arab nation to 'discover' oil, in the 1930's. Other GCC nations include Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates, who are also members of the O.P.A.E.C. agreements, who allied with South American and North African countries, and changed their name to the Oil Producing Exporting Countries, AKA OPEC, in 1962 (the 'A' stands for 'ARAB'). The member countries of GCC is referenced from 'The Daily Star' article published on this subject, on their date of 01/03/2009.

Other nations that OPEC encompasses are Algeria, Angola, Ecuador, Nigeria, Iran, and Venezuela. The last two countries are noted and notable in their overt decisions to eschew the United States Dollar as a medium of trade, according to the OPEC agreements which were signified in the years 1970 and 1971, under Nixon/Kissinger, and the concurrent negotiations that took place in Europe regarding the withdrawal of the United States from the Bretton/Woods Accords, that basically held the US Dollar, at least in 'theory', accountable to the value of gold and silver. After this country (the U.S.) had all but depleted it's reserves of these metals in the funding of the illegal and unConstitutional 'police action' aka the Vietnam Conflict, it had NO choice but to revalue it's currency in the new standard of trade, the 'PETRODOLLAR'.

These historical facts are a basis for why and what I am speaking of.

The basic goals of the 'Motley Fool', and the linked site (Seeking Alpha') have been, thus far, to show how one can profit from economic upheavals. The conception in your cotributors' minds of an ever-lasting United States Economic System did not encompass a total failure of this system, of which you both fail to consider.

MAERSK is the biggest shipping company in this world. They are also the shipping company that fields container ships to transport our troops to Afghanistan. They (MAERSK) have laid up 8 ships in China, for at least 6 months, due to the issues described in the Baltic Dry Index report of November 2008 (shipping orders are down by NINETY-THREE PERCENT). The link between the 'coalition' shipping and the MAERSK line is apparent in certain REUTERS photos of the attacks on the Basram shipping base of operations, that the USA uses to ship humm vees and such to this country, in order to 'combat terror'.

When WE tried to revive the store of 'Liberty Ships', proceeding Operation Desert Storm, in 1992, WE found out that these hulks were not 'VIABLE', due to the facts that there were no surviving personnel that could operate the oil-fired boilers, and most of these 'STRATEGIC ARSENAL' ships were sinking at their moorings, after 60 years of neglect. THUS, it took more than 11 months for us to 'respond' to Hussein's 'unauthorized invasion' of Kuwait, after the initial threats of Saddam to STOP TRADING OIL FOR DOLLARS.

Kuwait is one of the members of both the GCC and OPEC that broke from the consensus to abandon the US Dollar in trade for oil, a referenced in The daily Star article, dated 01/03/2008. PERHAPS this Arab oil producer actually believes in the United States and their adherence to its' 'Constitution'., and the promises that the United States makes.

Ask the Iraqi Kurds about 'promises' of fealty, after the failure of our CIA and the ARMY to topple the Hussein regime in 1992, directly because of the orders given by the Bush SR. and Clinton White House directives, in concert with the U.N... Saddam used the WMD's that we sold him in the 1980's to exterminate these people, decimating and torturing whole swaths of Northern Iraq, while we sat by and watched.

Yes, we have another thing coming, and the get-rich-quick traders that inhabit these sites watching their money 'grow' (Son, money don't grow on trees, you know!) have to pay the 'piper', in what is coming to this nation, due to our avarice and moral failures to reign in the fools that led us in the governments and financials.

I ask honestly for responses that have some moral or financial basis in light of what this nation has endured, and what this nation WILL endure, in the coming days, weeks, and months.

Responses such as 'yeah, sure, but we have survived worse, and we will always come out on top' won't be even entertained. As GMAC has been declared by 'emergency directives' (according to HR1424) to be an 'investment bank' (and GMAC is owned 51% by Cerberus Capital, the ones who OWN Chrysler and such), there can be NO consensus that this bailout thing can HELP AMERICA, if you understand the history of Cerberus Capital Management Corporation.

This is becoming too long for even the most acid investors to comprehend and understand, so I will wish you the best of God's blessings (OR, 'LUCK' AS YOU ATHIESTS WISH TO THY TO DESCRIBE).

MontgomeryScott

 

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#2) On July 13, 2009 at 9:02 AM, Tudd (< 20) wrote:

Yes MAERSK is the biggest shipping company in this world. They are also the shipping company that fields container ships to transport our troops to Afghanistan.Top scores on customer focus, customer service and reliability help Maersk Line take home the trophy for “Best Shipping Company”.Searching articles on colocation web hosting and data recovery plan.

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