New Pan Arabian Monetary Pact Signed
As I have said before, I don't believe the concept of a reserve currency has any relevance in today's world. I guess if I actually think about it, the concept of a reserve currency is a relic from the days of colonialism. And in today's world emerging markets are often in fact colonies of the United States in some form or another. We have remarked on here that no one would be happier than me if the dollar were no longer the world's reserve currency. Such a move would be the final nail in the coffin of globalization and the mark of the America's economic re-emergence. Bad news for the colonies might I add. But then bad news for the colonies is an outcome that is guaranteed anyway.
A pan Arabian central bank is an absolutely horrid idea economically and politically. But then the Arab states are absolutely horridly-run, corrupt fiefdoms so this is no great surprise. This idea of a pan Arab currency has been floated about for a long, long time. Needless to say because this dynamic is being pushed for many dubious reasons, I'll believe it when I see it. The next few years have many more surprises for the oil fiefdoms. Surprises that may just throw a wrench in this plan. As we have remarked many times, the European Union in its current form could very well not survive and it is comprised of democracies. I can't even begin to imagine a pan Arabian currency surviving given the political apparatus in each of these countries.
You'll hear a lot of squawking around this announcement that foretells doom for the dollar. Just as we have remarked with all of the other senseless squawking in the past, this too is nonsense. Regardless, none of this has any impact on our theme over the last few years of a strengthening dollar.
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