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It’s hard to find much to criticize in the journalistic work of Robert Fisk of the British Independent, at least as it pertains to the Middle East. Based out of Beirut for more than 30 years, Fisk is hard-wired into the region’s news and events. One of the few journalists to have interviewed Osama bin Laden – three times, from 1994 to 1997 – he’s won more British and international journalism awards than any other foreign correspondent. If anything about his work could be criticized, it might be that his writings make him sound a bit pro-Arab. Then again, his sympathy for the people of the Middle East may be what has given him such extraordinary access to events in that part of the world.
That said, it still felt shocking when Fisk reported a week ago that, in secret meetings of the Middle East’s oil-producing nations with China, Russia, France and Japan, what’s been discussed is changing the currency used in oil trades from the U.S. dollar to a "basket of currencies" by 2018. Fisk says his sources for this story came not just from connected individuals inside the Middle East, but also from banking officials in Hong Kong.If true, the implications would be enormous for all of us. This one event could seriously raise the cost of goods imported into America, from automobiles to oil. And our deficit spending, whether federal in nature or in trade deficits, would become a luxury we couldn’t afford. We’ve Been a Hot SunAmerica has always been such an exceptional consumer for the world that our dollars went everywhere, floating out to every last country that did any business with us. Their volume was such that, in late 2007, almost 64 percent of all official foreign exchanges’ reserves were held in U.S. dollars. And those countries sitting on our currency often found that the best way to put it back to good use was to buy up our debt or our goods. So the currency came back home, allowing our deficit spending, or in the purchase of American goods, and in return we gave the purchasing country a relative pittance in interest earnings. To use a cosmic analogy, consider America as the sun in the center of a galaxy of nations; the heat we radiate nurtures life and growth on these not so distant neighbors, while our currency is like water that keeps their economies flowing. If the dollar should lose its reserve status, then that is these nations’ way of saying that the economic heat of the U.S. is cooling and maybe other currencies should monetarily lubricate their economies. Driving the Cycle for 64 YearsWould replacing the dollar as common exchange currency signal a worldwide loss of respect for America? Maybe. More likely, it would simply re-validate a known truth: As individuals we all do things in our own economic self-interest. So do countries; certainly the idea of salesmanship or diplomacy is to make both sides feel they are moving toward a mutually beneficial common ground – economic self-interest for both.
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