TH (RE: Dollar),
From Sinclair yesterday:
Mr. Sinclair,
Some spin? I came across this article today and just can’t believe the spin being put on it. It states:
“That the United States has effectively given Gulf Arab oil producers the go ahead for making changes to their dollar-pegged foreign exchange policies.”
Then it continues:
“Citing a U.S. Treasury report to Congress that for the first time mentioned currency and inflation issues in the six-member Gulf Cooperation Council, Merrill said the United States government had become more confident about the outlook for the dollar and therefore did not necessarily need Gulf support for its currency.”
So we have given the GCC countries our permission to change and we feel that because our currency (US$) is so strong it won’t have an impact? What arrogance to say the least. What am I missing? As you so aptly state - This Is It!
Regards,
CIGA Jerry
Dear Jerry,
In spin 101 you always bless what you cannot stop.
Take note however that this is what Merrill Lynch says.
This could be an example of running the event up a flagpole to see how markets salute.
Either way, it is important.
Regards,
Jim
Merrill sees U.S. giving nod for Gulf FX change
Reuters
Sunday, May 25, 2008; 9:27 AM
DUBAI (Reuters) - Merrill Lynch & Co said the United States has effectively given Gulf Arab oil producers the go ahead for making changes to their dollar-pegged foreign exchange policies, by recognizing inflation as a problem.
In a report entitled "U.S. Green Light for the GCC," the U.S. investment bank said the United Arab Emirates and Qatar will probably move to a currency basket in the next few months, with their respective currencies appreciating 5 percent before the end of the year.
Saudi Arabia is unlikely to follow until late next year, Merrill said in the report received on Sunday.
Citing a U.S. Treasury report to Congress that for the first time mentioned currency and inflation issues in the six-member Gulf Cooperation Council, Merrill said the United States government had become more confident about the outlook for the dollar and therefore did not necessarily need Gulf support for its currency.
"We believe the inclusion effectively gives the GCC countries the green light for change," the bank said.
More… |
