For those that haven't heard this development has also been openly addressed individually by S. Korea, Kuwait, Russia and China. And they have all done their talking somewhat openly. The smaller oil producers in the middle east are also seeing the falling dollar inducing significant inflation which means their purchasing power is quickly falling even as they are desperately extracting crude to pay the bills and keep the Arab public pacified.
The dollar is continually sinking with small flurries of minimal recovery. Or in mkt language it has lower highs and lower lows.
So what will be the result? Oil will become more price stable as support for the dollar becomes more erratic. The dollar will experience a significant drop at some point and the rush for the door will then begin.
But through out this dance crude oil will retain it's supply and demand credibility.
The traditional playoff between the dollar and gold will continue to be erratic until the world flips to another 'reserve' currency. And what might that be? The choices are few but it would have to be one that has known gold reserves and a existing large world wide acceptance.
The Euro is being accepted by Russia, Venezuela, and Iran so the short list is.... one... the Euro.
Also, you can see from this article our dear friends in the KSA are themselves seriously considering it. Reading between the lines of this over heard discussion my conclusion is they are saying: It's a matter of timing.
Their is also a middle east oil producer finance ministers meeting scheduled. And the agenda unannounced though will be how to get the most bounce from the dead cat.
As to the KSA they are the dearest of dear friends though their is speculation that they have been in discussion with the Chinese regarding their taking over the guard duty which has been the bases of their loyalty to the U.S.
The U.S. is the defender of the their Kingdom from their neighbors aswell as from their own people in exchange for unlimited oil. And since KSA is also experiencing "Peak Oil" with regards to their production it is a situation of : The we will take what ever KSA gives us and at any price.
The U.S. runs oil for blood and with out oil we die. That's of course unless we change drastically. And actually at this point the crash will come first and change will soon follow.
And further spelling it out if the buck is nolonger the world 'reserve currency'
it's good by dolly and hello Peking.
Do I know what I'm talking about?
Actually, what i believe i am doing is to summarize the conclusions of the gold and oil analysis who feel their is no coming back for the dollar at this point.
Will we notice the effects of this falling dollar ourselves here in Never Never land?
I would say: yes...if we also continue to eat and use energy.
Today gold is down but so is the dollar. The difference is gold will continue to ascend while the dollar will continue to decline.
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