Contagion is spreading … Worries about the euro travel to the Middle East … The European debt crisis has claimed its latest victim — not in Frankfurt, but a six-hour plane journey away from the headquarters of the European Central Bank. The long-mooted plan to introduce a single currency for the states of the six-nation Gulf Cooperation Council has been put on hold. The reason: disruptive currents from the Mediterranean have washed through to the balmy waters of the Gulf. Foreign ministers at a Gulf Cooperation Council meeting in Jeddah at the end of last month expressed caution about plans for a single currency — at one stage envisaged as being implemented in 2010, then put back to 2015. "There are a lot of lessons" to be drawn from euro area problems centered on countries like Greece and Spain, according to Kuwait's deputy premier and foreign minister, Sheikh Mohammed Sabah al Salim al Sabah, who chaired the meeting. The idea is now to bring about a "pause" in single currency enactment. Although Arab ministers say this stops short of a downright postponement, the outcome is more or less the same. Kuwait has previously been one of the most enthusiastic proponents of the Middle East monetary plans, so signs of concern about Greece are certainly a sign of the internal and external hurdles now building up. – MarketWatch
Dominant Social Theme: Just a glitch on the way to world currency.
Free-Market Analysis: We are surprised. The Gulfo is no more. Wikipedia, in fact, has expunged the name Gulfo, which we thought was very a strange name to begin with. Wikipedia now redirects us from Gulfo to Khaleeji (currency). This we learn was the proposed name. Khaleeji is Arabic for Gulf, Wikipedia tells us. The article doesn't tell us what MarketWatch has learned – that the Gulfo has taken an indefinite leave of absence. Here's some more:
No official name has been agreed as of yet … since Islamic economic jurisprudence prohibits interest, or 'riba,' there is speculation that the future GCC currency will be backed by gold. However, senior figures in the GCC administration have stated that the currency will likely be linked initially to the dollar. The Saudi central bank currently backs, with its full support, dollar linked currencies. Saudi Arabia has similarly rejected calls for the International Monetary Fund SDR to be used as a reserve currency. A further alternative is the use of a basket of currencies to serve as a peg to the GCC currency.(– Wikipedia)
Wikipedia can speculate away, but uselessly now. Of course, to be fair to Wikipedia, the Gulfo did sound pretty convincing. When we wrote about the Gulfo we thought it was well on its way to being an official currency. We had our doubts that it was necessary but we did see it as almost inevitable evolution given that other regional currencies were popping up like spring flowers – or perhaps weeds is perhaps a better terms. Here's some of what we wrote:
Certainly the demonetization of silver conveniently paved the way for the gold standard that was infinitely more open for manipulation than the gold-and-silver standard. And the consolidation of the gold standard inevitably led to fiat currencies. And now fiat currencies are consolidating …You may believe that, dear reader, but we do not. We think the metamorphosis of money is NOT a coincidence. We might grant it were a coincidence if the evolution were not so endlessly in favor of more and more mercantilist control – whereby the state provides the imprimatur and the power elite provides the vision and grabs the profits. We see the trend toward regional currencies and it has done nothing to alleviate our suspicions. The IMF special drawing rights are a form of regional, even super-regional "money." In South America, a regional currency is planned. Others have been mentioned. And now there is the Gulfo. The Gulfo!
To read more of the article, click here: Petro Powers to Launch Gulfo Currency.
Obviously, we were not fans of the idea – nor are we now; the difference is that in the past six months the Gulf states have rethought the idea themselves. What once seemed an obvious evolution has turned into a theoretical go-slow zone. And with the increasing time span, and these latest developments, it seems more obvious to us than ever that currency consolidation has elements of a kind of fad – a fashionable exercise that seemed inevitable only so long as central bankers could maintain a bubble economy allowing the happy planning to continue.
The Western economic collapse, at once dreaded and anticipated by EU leaders, is not after all leading inevitably to a closer political union. In fact, it seems to be creating a level of bickering that threatens not just gestating currencies but even the euro itself. And there are even bigger ramifications – that have to do with the effectiveness of elite plans in the 21st century and the ability of the power-elite to realize them. Events are seemingly spinning out of control.
Middle East ministers' minds have recently been concentrated on the strains besetting the euro, underlining what can go wrong when economic disparities increase across a fixed rate system – and the limits on political solidarity. In the case of Europe, even democratically-elected leaders of states that have been economically and politically bound together since the 1950s have been having second thoughts on whether they really have the cohesion to weather the pressures of monetary union. How much greater must be the doubts and soul-searching among non-elected rulers of Arab states still bound together more by traditional tribal and family loyalties than any overriding political ties. (- MarketWatch)
We are most aware that the alternative press (much of it anyway) portrays the powers-that-be as fairly infallible and the extent of their reach as endlessly broad. We believe that the 21st century is becoming a good deal less hospitable to the dominant social themes of the elite than the 20th century. Global warming, serial Middle East wars, the EU and euro itself – all memes once trumpeted successfully are now seemingly in difficulty. It is a combination of the current economic crisis and the truth-telling of the Internet that has raised the consciousness of millions.
We don't mean to suggest that powerful families and individuals that together own much of the world's wealth are somehow going to stop their drive for increased global governance. But here at the Bell, every day, we track the success or failure of the promotions that are utilized in this drive for worldwide consolidation and control. We see the degradation of these themes along with continued successes. We remain certain the world is a far more complex place in the 21st century than the 20th – even for the elite itself. And certainly for investors trying to figure out what is coming next.
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