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Secret Plan to Ditch the U.S. Dollar’s Dominance Uncovered

By Robert Fisk, Independent UK.

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.

The Americans, who are aware the meetings have taken place – although they have not discovered
the details – are sure to fight this international cabal which will include hitherto loyal allies Japan
and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China’s former
special envoy to the Middle East, has warned there is a risk of deepening divisions between China
and the US over influence and oil in the Middle East. “Bilateral quarrels and clashes are unavoidable,”
he told the Asia and Africa Review. “We cannot lower vigilance against hostility in the Middle East
over energy interests and security.”

This sounds like a dangerous prediction of a future economic war between the US and China over
Middle East oil – yet again turning the region’s conflicts into a battle for great power supremacy.
China uses more oil incrementally than the US because its growth is less energy efficient. The
transitional currency in the move away from dollars, according to Chinese banking sources, may
well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu
Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar
reserves.

The decline of American economic power linked to the current global recession was implicitly
acknowledged by the World Bank president Robert Zoellick. “One of the legacies of this crisis
may be a recognition of changed economic power relations,” he said in Istanbul ahead of meetings
this week of the IMF and World Bank. But it is China’s extraordinary new financial power –
along with past anger among oil-producing and oil-consuming nations at America’s power to
interfere in the international financial system – which has prompted the latest discussions
involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed,
China appears to be the most enthusiastic of all the financial powers involved, not least because
of its enormous trade with the Middle East.

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