The Independent is reporting that the Gulf Arab states along with China, Russia, Japan, and France are planning on ending the pricing of oil in dollar for a basket that will include the yen, yuan, euro, gold and a Gulf unified currency. The story is titled, "The demise of the dollar". This would occur over a transition period at 2018.
Is this serious? The reports say that meetings have been held and something is going forward. Does it make sense? Yes, with trade and oil flows to Europe and China this makes very god economic sense. You want exports flows to match the currency of payments for your imports to reduce currency risk. There re a lot of hurdles to this plan. You need a convertible yuan independent of the dollar. You will have to have Gulf countries add to their gold reserves. The ruble will have to become more liquid.
With the decline in the dollar and the high variability with the exchange rate, these types of discussions should not be surprising.
Is this serious? The reports say that meetings have been held and something is going forward. Does it make sense? Yes, with trade and oil flows to Europe and China this makes very god economic sense. You want exports flows to match the currency of payments for your imports to reduce currency risk. There re a lot of hurdles to this plan. You need a convertible yuan independent of the dollar. You will have to have Gulf countries add to their gold reserves. The ruble will have to become more liquid.
With the decline in the dollar and the high variability with the exchange rate, these types of discussions should not be surprising.
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