A Gulf Co-operation Council (GCC) official says he expects the EU-style Gulf single currency to materialise although this would take nearly five years, writes Emirates Business 24/7 today. (1)

What is that an “EU-style Gulf single currency”?

Is that a single currency like the euro as described by Dr Fabian Amtenbrink, a professor of European Union law at Erasmus University Rotterdam? (2)

Or is that the real euro with its gold reserves marked to market(-price) on a regular basis?

Oil, the Gulf single currency, is the only commodity in the world that was large enough for gold to hide in.
Oil producers do indeed exchange their petro-dollars, which like the dollar itself have no value, for gold. (3)

Professor Amtenbrink, on the other hand, says that the euro was framed so as to retain its value in order to maintain price stability. He does not say how the floating currency which the euro is retains its value. He evades the point of demonstrating what is the anchor which prevents the euro from floating away. For professor Amtenbrink, it is the law, the 1992 Treaty of Maastricht, which provides the anchor for the democratic accountability of the managers of the euro. He can therefore only talk about the foreign exchange (forex) reserves of the euro not of its gold reserves. He does not say that soon after the 01 January 1999 introduction of the euro, European central banks, including the European Central Bank (ECB) and central banks from inside and outside euro area, but excluding the International Monetary Fund (IMF), concluded on 26 September 1999 the Washington Agreement whereby they said that gold would remain an important reserve asset and that they would therefore limit their gold sales. (2, again)

Ivo Cerckel
honestmoney@maktoob.com
http://twitter.com/ivocerckel/

NOTES

(1)
GCC single currency may not materialise, says Saudi firm 
By Staff Writer 
on Sunday, February 21, 2010
http://www.business24-7.ae/Articles/2010/2/Pages/20022010/02212010_068259704df44c96a873b8b3af91222a.aspx

(2)
book review by this blogger on Amazon.com of
Kapteyn & VerLoren van Themaat,
(P.J.G. Kapteyn, A.M. McDonnell, K.J.M. Mortelmans, C. W.A. Timmermans, (eds.)),
“The Law of the European Union and the European Communities” (Paperback),
Wolters Kluwer – Law & Business, April 1, 2009, 4th edition,
in which professor Amtenbrink wrote Sections 1, 2 and 3 of Chapter X “Economic, Monetary and Social Policy”
http://www.amazon.com/Law-European-Union-Communities/product-reviews/9041128166/ref=cm_cr_pr_redirect?ie=UTF8&showViewpoints=0

(3)
Gulf dinar to be backed by gold hiding in oil
Posted by Ivo Cerckel on 9th September 2009
http://bphouse.com/honest_money/2009/09/09/
[If the link does not work, try to copy it and paste it in your browser]