New Gulf currency ‘Khaleeji’ poised to be Gold backed – Another Nail in the USD Coffin?

New Currency Symbol for the Khaleeji (which means of the Gulf)

• As reported in my earlier post Single Regional Currencies – Gulf Cooperation Council and Latin America , many counties are moving quickly to create  a single regional currency to replace the USD. The USD is viewed by many as a severe risk to the world economy. Its appreciation since last July has caused severe disruption to many economies. Eastern European countries that borrowed heavily in USD found themselves in deep deep trouble as the USD rose against their local currencies. Their debt burden increased astronomically. Many countries in Eastern Europe are about to default on their debts.
   
• The deleveraging can only go on for so long. Once completed the USD will resume it downward momentum and plunge to unheard of level. The USD is as good as toast. The Middle East Gulf Cooperation Council (GCC) is moving aggressively to limit its exposure to the upcoming collapse of the USD. It has now formalized the new regional currency Khaleeji which will be back by Gold.
   
• Stefan Pernar reports in New Gulf currency ‘Khaleeji’ poised to be Gold backed to remove ‘Riba’ :
    
  Again, bad news about this week and even those of us who made all the right moves early on can not help but feel anxious about what seems to come next: act two of the global financial and thus economic meltdown . This is indeed not the time for a little ‘I-told-you-so’ victory dance. Yes, gold as well as silver are storming to new heights .
   
  Yes, global trade collapses . Yes, Asian economies are in free fall as a result. Yes, Japan’s economy is crashing into an economic depression .  And yes again, global stock markets seem to inevitably march forward and over the edge of a precipice , while eastern European countries, the UK as well as Switzerland are following the nosedive of the Icelandic dodo falcon. Once the dust has settled we may have very well witnessed the worst recession in 100 years . On the background of this picture, news of GM considering to file for chapter 11 and China continuing to prep the world for a departure from US bonds comes almost as an afterthought. Everything points to something big happening real soon now and it smells like panic is taking over. Nothing new in the west nor the east – however watch the middle. The middle east to be specific.
   
  There is something that is not only new, but something that for the most part has been overlooked by the majority of the news outlets that at least I use to frequent. When GCC leaders concluded their 29th annual summit meeting in Muscat, Oman at the 31st of Dec 2008 with a final approval for the creation of a single currency for the six-nation economic bloc the I certainly did not hear about. Meet the Khaleeji . It is the upcoming common currency of the Gulf Cooperation Council (GCC) scheduled to go live in 2010 . In light of the worsening financial crisis earlier worries of a delay until 2015 have apparently been dispelled.
   
  That I have not heard about the Khaleeji until about a week go is surprising to me for two reasons. Firstly, the common currency for the GCC has apparently been mulled since at least 2002 by the IMF giving more than enough time for the word to spread. Secondly – and here is when it becomes interesting: speculation is about for the GCC currency to be backed by gold . And why shouldn’t it ? Not only has the introduction of a then still called ‘ Islamic Gold Dinar ‘ as a global currecny been suggested since early 2001 . No, in addition a group of Saudi businessmen has purchased gold to the tune of $3.5 Billion in an off market transaction in November 2008.
   
  Add to that impressions of the world renowned Dubai Gold Souk and I would be very surprised if gold does not at least become a major component in the basket of goods lending punch to the new currency. 
   

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