From The Independent
In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading
By Robert Fisk
In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.
The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years. ..
“These plans will change the face of international financial transactions,” one Chinese banker said. “America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate.”
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The United Nations called on Tuesday for a new global reserve currency to end dollar supremacy which has allowed the United States the “privilege” of building a huge trade deficit.
“Important progress in managing imbalances can be made by reducing the reserve currency country?s ‘privilege’ to run external deficits in order to provide international liquidity,” UN undersecretary-general for economic and social affairs, Sha Zukang, said.
Speaking at the annual meetings of the International Monetary Fund and World Bank in Istanbul, he said: “It is timely to emphasise that such a system also creates a more equitable method of sharing the seigniorage derived from providing global liquidity.”
He said: “Greater use of a truly global reserve currency, such as the IMF?s special drawing rights (SDRs), enables the seigniorage gained to be deployed for development purposes,” he said.
The SDRs are the asset used in IMF transactions and are based on a basket of four currencies — the dollar, euro, yen and pound — which is calculated daily.
China had called in March for a new dominant world reserve currency instead of the dollar, in a system within the framework of the Washington-based IMF.
From The Telegraph(UK)
By James Quinn, US Business Editor
Published: 8:35PM BST 05 Oct 2009
The US Treasury overstated the financial health of America’s nine largest banks last year when it invested $125bn into them, an internal investigation has found.
The nine banks forced to take part in the capital injection scheme included Citigroup and Bank of America, who, in spite of both receiving $25bn of TARP funds last October, both required a further injection of $20bn plus loan-loss guarantees to cover losses on toxic assets.
The October injections were however forced on to the banks in question by Treasury Secretary Hank Paulson, telling reluctant chief executives including Goldman Sachs’ Lloyd Blankfein and JP Morgan Chase’s Jamie Dimon that not taking the money was not an option.
In his new report, Mr Barofsky highlights a number of public comments made by both Treasury and Fed officials last October about the health of the nine banks, saying that such “inaccurate statements” only serve to make the TARP more controversial than it has already proven to be.
Mr Barofsky said last month he thought it “highly unlikely” the Treasury will ever be able to recoup its full investment.