Wednesday, October 3, 2007

Do You Hear Drums In The Distance?


Sound Of Cannons has mentioned briefly in the past that currency speculators in the Middle East have been predicting a revaluation of local dollar-pegged currencies. “Frenzied traders bid up the UAE dirham and the Saudi riyal to near record highs as a result,” reports Dubai sources. “Saudi British Bank did its best to calm the waters by saying, ahem, it would only dump the buck, ‘if the dollar weakens at an alarming rate.’"
Now it’s OPEC’s turn: “International banks and analysts have hinted at the possibility of the OPEC changing the price of oil to a currency basket, rather than the dollar,” With Iran all but there… and Venezuela not far behind, we’re not surprised.
"If the dollar were to lose its luster as a reserve currency,” reads a note of concern released by Merrill Lynch, “this could prove disruptive to the global financial system."

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