Well OPEC seems to be onto us and our highly levered currency. Several OPEC ministers (namely team Chavez and Ahmadinejad) entertained discussions this weekend of dumping the dollar as the currency tied to the oil trade. We suspect by tomorrow this'll be all over the media airwaves spun in any number of variations depending upon to whom one listens. Personally, we're not that worried for the short term. Having already ditched the car, we feel ready for the gas hikes. Chavez and Ahmadinejad are simply using their resources for the purpose of self preservation and protectionism. Those defenses could be appreciated and dealt with reasonably as they are fueled by fear based thinking built upon agressive Bush dipolomacy. Wouldn't our Utopian dreams be realized if George Dubbleya would just call in a troop of therapists rather than his troop of Generals? Don't forget Cheney.
From the BBC: Mr. Ahmadinejad said that all Opec countries had showed interest in converting their cash reserves into other currencies. "They [the US] get our oil and give us a worthless piece of paper," he told reporters.
Perhaps the Saudis took a cue from JayZ this weekend. Certainly they realized the U.S. needs no further pressure on our dollar in the middle of a credit crunch. But they also have an insider who knows our pain. Saudi Prince Walid has suffered the hammering of our subprime woes compromising his close relationship with another Prince by the name of Charles, formerly of Citgroup. Charles Prince made personal phone calls to The Prince during pinnacle moments of Citi's spectacular unwinding. The Saudi Prince now endures continued write downs in addition to enjoying the double whammy of dollar devaluation. Click for official JayZ video.
The question remains - how long can, or rather will, the Saudis, these friends of the Bush family, hold back a dollar sell-off? Fiat currencies cannot stand question.