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Middle Eastern Countries Plot to Dump US Dollar

Oil-rich Middle-Eastern countries are meeting along with other world powers to plot a withdrawal from the US dollar as a petrocurrency.

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.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

Foreign organizations such as the International Monetary Fund and World Bank are planning to seize the role traditionally held by the American dollar as a reserve currency.

Its twice-yearly meeting agreed a stronger voice for G20 countries in Fund decisions. Russian Finance Minister, Aleksey Kudrin, says it’s a step in the right direction

“It’s a continuation of the G20 meeting. We talked about reforming the IMF – the key question was the increase in the share of the IMF capital for developing countries, as many think organizations like the IMF and World Bank represent only the interests of developed countries. But the developing markets which are a huge part of the global economy are not presented enough in top management and the capital of these institutions.”

…The agenda of the IMF and the World Bank in Istanbul reflects tension between the growing voice of developing nations – and the traditional role of global lenders. The head of the World Bank Robert Zoelick took a middle view – saying that as the US economy loses influence, the financial institutions may take on its leading role.

A market analyst has claimed that the primary purpose of the G20 meeting in Pittsburgh was to usurp the sovereignty of the United States by placing its currency beneath Special Drawing Rights issued by the IMF.

According to Jim Rickards, director of market intelligence for scientific consulting firm Omnis, the unannounced purpose of the G20 Summit in Pittsburgh on September 24 was that “the IMF is being anointed as the global central bank.” Rickards said in a CNBC interview on September 25 that the plan is for the IMF to issue a global reserve currency that can replace the dollar.
 
“They’ve issued debt for the first time in history,” said Rickards. “They’re issuing SDRs. The last SDRs came out around 1980 or ’81, $30 billion. Now they’re issuing $300 billion. When I say issuing, it’s printing money; there’s nothing behind these SDRs.”
 
…The U.S. has fueled the world economy for the last 50 years, but now it is going broke. The U.S. can settle its debts and get its own house in order, but that would cause world trade to contract. A substitute global reserve currency is needed to fuel the global economy while the U.S. solves its debt problems, and that new currency is to be the IMF’s SDRs.

One way to address the problem of fiat currency is to restore the right for citizens to trade in gold and silver. In the previous Congressional session, Rep. Paul introduced a bill (H.R. 2756) calling for the repeal of legal tender laws which currently prohibit this practice.

The Honest Money Act repeals legal tender laws, a.k.a. forced tender laws, that compel American citizens to accept fiat (arbitrary) irredeemable paper-ticket or electronic money as their unit of account.

Absent legal tender laws, individuals acting through the markets, rather than government dictates, determine what is to be used as money. Historically, the free-market choice for money has been some combination of gold and silver, whenever they were available. As Dr. Edwin Vieira, the nation’s top expert on constitutional money, states: “A free market functions most efficiently and most fairly when the market determines the quality and the quantity of money that’s being used.”

…The drafters of the Constitution were well aware of how a government armed with legal tender powers could ravage the people’s liberty and prosperity. That is why the Constitution does not grant legal tender power to the federal government, and the states are empowered to make legal tender only out of gold and silver (see Article 1, Section 10). Instead, Congress was given the power to regulate money against a standard, i.e., the dollar. When Alexander Hamilton wrote the Coinage Act of 1792, he simply made into law the market-definition of a dollar as equaling the silver content of the Spanish milled dollar (371.25 grains of silver), which is the dollar referred to in the Constitution.

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