According to the British newspaper Independent, secret meetings have been held by finance ministers and central bank governors in Russia, China, Japan, France and Gulf Arab states to work on a scheme, which will mean that oil will no longer be priced in dollars.
Russia, France, China, Brazil and Venezuela have all separately called for a global currency at one time or another since the economic crisis began last fall, but this is the first time I’ve heard of groups of nations meeting to discuss the possibility.
The Independent claims that the Arab states had launched the secret moves to stop using the U.S. currency for oil trading. The plan is to move towards a “basket of currencies” instead. The currencies being discussed apparently include 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.
Some Arab oil officials have denied the claim in a report by the Wall Street Journal, but just the rumor of such meetings has caused the price of gold to climb to a new record high and weakened the dollar.
The United Nations is now calling for a new global reserve currency to end dollar supremacy, which has allowed the United States the “privilege” of building a huge trade deficit.
Last week, Robert Zoellick, president of the World Bank, warned that “the United States would be mistaken to take for granted the dollar’s place as the world’s predominant reserve currency.”
All of this is a result of our out-of-control debt. Yet our government still has no problem jamming through a trillion dollar health care plan. Or spending hundreds of billions on bank bailouts and stimulus money. And they don’t even flinch at the billions in cost of a massive cap-and-trade program.
The out of control spending and printing of money by our government is enough just by itself to wreck our economy. If the world decides to dump the dollar, we are headed for some very dark times.
If that is the scenario, I would suggest reading up on the Weimar Republic for a glimpse of the future.