Crude oil may no longer be priced in US dollars

So many senior economists of the world have been predicting that if the crude oil  is traded in the currency other than US$, that might be the cause for devaluating the dollar or even collapse of the US$.



There is little doubt that the global financial meltdown has changed the world financial order. The latest development that supports this view is the attempt of gulf oil producers to move away from pricing crude oil in terms of the US dollar to a basket of currencies instead. This move also has the support of countries like China, Russia, Japan and France. As per The Independent, these countries have already held secret meetings to discuss the same. Apparently, Brazil and India also approve of this move.





In my view, given the importance of crude oil transactions in world trade, this will dent the US dollar's role as the world's reserve currency. Other currencies, including the Chinese Yuan and gold will jointly take up that space. It means that the demand for gold will also climb.



As for the Americans, they are not going to take this development lying down. After all, it prevented the UK from joining the Euro and invaded Iraq when it moved its crude oil prices away from the US dollar. I expect a lot of muscle flexing over this issue in the days ahead.

 

POSSESS GOLD and SILVER, STAY AWAY FROM US $.