Sunday, March 30, 2008
Dollar’s decline: A crisis or an opportunity?
Despite the US Federal Reserves intervention last week to shore up the US dollar, the currency is showing little sign of recovery. Many analysts now predict that the US economy at the very least will stay in recession for sometime, while others forecast a substantial collapse in the value of the dollar prompting a global depression. Whatever the outcome, the precarious position of the dollar presents an opportunity for Saudi Arabia and the Gulf countries that possess enormous dollar reserves and trade in petro-dollars. If these countries were to withdraw dollar assets from US banks, and also start selling crude oil in a currency other than the US dollar, then the American economy would very quickly collapse. Just this move alone would force the US to spend its the huge military budget on starving Americans at home and substantially reduce its military commitments abroad. Had these rulers possessed iota courage they would have undertaken such a step long ago to rescue Muslims in Palestine , Iraq and Afghanistan from US subjugation.