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'The price of gold struck an all-time high Tuesday as the dollar fell on a news report of a plan by Gulf states to stop using the greenback for oil trading.
Gold hit 1,045.00 dollars per ounce on the New York Mercantile Exchange in late trades.'
Price of gold soars on report of Arab states ditching dollar | Raw Story (http://rawstory.com/2009/10/price-of-gold-soars-on-report-of-arab-states-ditching-dollar/ - broken link)
Won't happen, they all have to much to lose if the dollar keeps falling.
Not if they switch to a different currency ( Euro etc.). I think it will happen. They pumped too much money into the economy. The inflation will skyrocket like crazy and the Dollar will continue losing value. Anybody who can do the math will try drop the Dollar. Can we blame them? I don't think so. We dug our own grave.
'The price of gold struck an all-time high Tuesday as the dollar fell on a news report of a plan by Gulf states to stop using the greenback for oil trading.
Gold hit 1,045.00 dollars per ounce on the New York Mercantile Exchange in late trades.'
Price of gold soars on report of Arab states ditching dollar | Raw Story (http://rawstory.com/2009/10/price-of-gold-soars-on-report-of-arab-states-ditching-dollar/ - broken link)
This is just a lot of noise and little substance. For the gulf states to make a switch from the US Dollar, there first needs to be a suitable substitute reserve currency that could replace the dollar as the worlds number one reserve currency. Currently nothing exist and the Euro will most likely collaspe, because it is hurting the European Union more than helping.
Fact of the matter is until a suitable substitute emerges to replace the dollar this is all just hot air.
Gold will continue to rise as a hedge against inflation and the falling value of the dollar. Oil Prices will also continue to rise, so the Gulf States certainly have nothing to worry about. The demand for energy from emerging economies is much to great and the Gulf States in my opinion do not have as much powers as they did 10 years ago. There are tons of countries both North and South of the good ole USA that have plenty of oil reserves.
Dollar Falls
Oil Price Rise
Gold Rises
and the opposite if the dollar goes up in value
In general any of the individuals working in exporting industries should be applauding a weak dollar as the theory is it will increase the number of exports and reduce trading imbalances. The only problem going forward is the crowding out effect of government borrowing to fund defecit spending on the private sector for loanable funds and the increase in the money supply, that could lead to inflationary pressure etc.
China and France have both publicly warned us to stop printing money.
We've ignored them.
Congress is on a spending spree and totally oblivious to the crumbling US economy all around them.
If I were a foreign power I'd be scrambling to get rid of my US Treasury holdings.
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