UAE dirham to be linked to gold
Posted by Ivo Cerckel on June 14th, 2009
United Arab Emirates to sell bonds, seek sovereign rating
Jun 14, 2009 at 12:37
By Maria Abi-Habib
http://business.maktoob.com/20090000005333/UAE_to_sell_bonds_seek_sovereign_rating/Article.htm
SNIP
The UAE will sell federal bonds to help fund budgetary spending on infrastructure in the Gulf’s second-largest economy and seek a sovereign rating for the first time, a top finance official told Zawya Dow Jones on Sunday.
“The government is moving to a long term budgeting process and whatever we need will be done through a bond issuance,” Younis al-Khoori, the Ministry of Finance’s director general told Zawya Dow Jones in an exclusive interview. UNSNIP
The dirham is pegged to the US dollar
in order that the UAE Central Bank be able,
like the US central bank, the Federal Reserve,
to print dirhams into existence out of thin air.
Yes, I know the US Treasury also issues Treasury Bonds and Treasury Bills,
but why is that necessary if one can create money out of thin air?
Or will the Gulf Co-operation Council Monetary Union, in which the UAE says it will not participate, link its currencIES to gold (hiding in oil)?
As oil is the only commodity that is large enough for gold to hide, gold is indeed hiding in oil.
Yes if the dirham will be linked to gold,
the UAE Central Bank will not be able to print dirhams into existence out of thin air
and then the issuance of bonds may be necessary.
Ivo Cerckel
honestmoney@maktoob.com
June 15th, 2009 at 06:56
Yes, US Treasury Bonds and Treasury Bills came into existence before 15 August 1971 when US president Richard Nixon broke the Bretton Woods Agreement which linked the US dollar to gold at fixed parity (then at 40-something dollar an ounce) and all other currencies to the said dollar.
Before that date, money could not be created out of thin air.
But since that date, money in the US is being created out of thin air.
Since 15 August 1971, US T-Bonds and T-Bills have therefore no more reason to exist.