room for creative Omani accounting

1.
Does monetary union equate single currency?

Could it be that Oman is opting out of the Gulf single currency, but not out of Gulf Monetary Union?

We’ll know by Wednesday morning.

I’m still keeping my fingers crossed, arguing that for Oman, Gulf Monetary Union is about the marking to market of the gold reserves of the Gulf Co-operation Council (GCC) states by the Gulf Monetary Authority / Gulf Monetary Council.

For Oman, GMU is MTM of gold reserves by GMA/GMC
September 16th, 2008 by Ivo Cerckel
http://bphouse.com/honest_money/2008/09/16/for-oman-gmu-is-mtm-of-gold-reserves-by-gmagmc/
[If the link does not work, try copy and paste it in your browser.]

I still have one or two GMT+8 nights to dream

2.
We still don’t know “what” we don’t know.

This is fortunate because otherwise the present salami-crash in slices would immediately and abruptly come to a halt and become a real crash into the unknown.

Whereas the USA Treasury marks its gold reserves to the model of USD 42, the European Central Bank marks its gold reserves to market (-price).

Marking to model versus marking to market.

We don’t know what’s happening. This means confusion. Confusion means room for creative Omani accounting.

Only full disclosure of toxic debts will get the West moving again
It has been a year of financial explosions.
by Liam Halligan
Last Updated: 7:34PM GMT 28 Dec 2008
http://www.telegraph.co.uk/finance/comment/liamhalligan/3982447/Only-full-disclosure-of-toxic-debts-will-get-the-West-moving-again.html
SNIP
The money markets are locked because the banks don’t trust each other. Even they don’t know how much toxic debt is out there – and which bank could be the next to fall. That’s why the spread between the London Inter-bank Offered Rate and overnight interest rate swaps of the same maturity remains so wide – and wider in the UK, now, than either the States or the eurozone.
The crucial inter-bank market will remain frozen until the banks are forced, under threat of prosecution, to reveal the true extent of their sub-prime liabilities. Such “full disclosure” won’t be easy – involving the exploration of millions of complex derivative contracts, often across borders – but it simply must be done. UNSNIP

Ivo Cerckel
Siquijor, 29 December 2008

Unbacked paper currencies also!

We still don’t know “what” we don’t know.

This is fortunate because otherwise the salami-crash in slices would immediately and abruptly come to a halt.  (Guess in what direction it will move after the halt.)

Only full disclosure of toxic debts will get the West moving again
It has been a year of financial explosions.
by Liam Halligan
Last Updated: 7:34PM GMT 28 Dec 2008
http://www.telegraph.co.uk/finance/comment/liamhalligan/3982447/Only-full-disclosure-of-toxic-debts-will-get-the-West-moving-again.html
SNIP
The money markets are locked because the banks don’t trust each other. Even they don’t know how much toxic debt is out there – and which bank could be the next to fall. That’s why the spread between the London Inter-bank Offered Rate and overnight interest rate swaps of the same maturity remains so wide – and wider in the UK, now, than either the States or the eurozone.
The crucial inter-bank market will remain frozen until the banks are forced, under threat of prosecution, to reveal the true extent of their sub-prime liabilities. Such “full disclosure” won’t be easy – involving the exploration of millions of complex derivative contracts, often across borders – but it simply must be done.

GCC summit to focus on global financial crisis
P.K. Abdul Ghafour | Arab News
Sunday 28 December 2008 (01 Muharram 1430)
http://www.arabnews.com/?page=6&section=0&article=117596&d=28&m=12&y=2008
SNIP
During the two-day summit the GCC leaders are expected to approve an agreement on monetary union. “This will lead to the formation of a monetary authority that will set out technical details of the new GCC currency, its name and form,” a GCC source said.
Mohammed Al-Mazroui, assistant secretary-general, said the topic of monetary union would be on top of the agenda. “The summit is likely to come up with a final action plan for the unified monetary regime for the GCC states,” he said.
Asked whether the GCC countries would be able to stick to the deadline of January 2010 for achieving the unified monetary union, Al-Mazroui said: “We are very close to that already. The ensuing summit will come out with a definite answer for this.”
He said the summit would also come out with the details of the new unified GCC monetary authority. “The final draft for the GCC Monetary Authority has already been prepared, and it will be submitted for approval at the summit.”
Asked whether the new unified currency would be pegged to the US dollar, he said: “This is something that the new monetary authority will decide.”
He said five of the six GCC members — Saudi Arabia, UAE, Qatar, Bahrain and Kuwait — had already announced their resolve to join the GCC monetary union. Oman has, however, said it would stay out of it in the beginning.
Asked whether Kuwait’s move to link its currency to a basket of currencies would have any impact on the unified currency, he said: “These two (unified currency and currency pegging) are different issues.”
Last September, GCC finance ministers approved the framework for the monetary union but left questions over the timing of the launch of the single currency unanswered.
UNSNIP

Ivo Cerckel