Alan Greenspan tells Gulf States to abandon the US Dollar

[ElsewheresDaughter]

http://www.reuters.com/article/ousivMolt/idUSL2515874520080225

By Souhail Karam and Stanley Carvalho

JEDDAH/ABU DHABI (Reuters) - Former Federal Reserve Chairman AlanGreenspan said on Monday near-record Gulf Arab inflation would fall"significantly" were the oil producers to drop their dollar pegs, incontradiction to Saudi policy.

The pegs restrict the Gulf's ability to fight inflation by forcingthem to shadow U.S. monetary policy at a time when the Fed is cuttingrates to ward off recession and Gulf economies are surging on a nearfive-fold jump in oil prices since 2002.

Rifts are growing across the world's top oil-exporting region on howto tackle inflation which hit a 27-year peak of 7 percent in SaudiArabia in January and a 19-year peak of 9.3 percent in the United ArabEmirates in 2006, the most recent figure.

"In the short term free floating ... will not fully dissipateinflationary pressure, although it would significantly do so,"Greenspan told an investment conference in Jeddah, Saudi Arabia'ssecond-largest city.

[lumberjack_jeff]

1. Would this not increase inflation in the US? n/t

[ElsewheresDaughter]

3. Greenspan is still an errand boy for the folks who are planning to swoop down & buy what's left ...

of America's assets at pennies on thedollar once his work is complete.

This is just phase two.

The carefully-engineered credit/housing/equity bubble was phase one.

[Angela Shelley]

5. Who are the "folks" and what are they planning to buy?

Which assets are you talking about?

[ayeshahaqqiqa]

2. Greenspan is apparently contradicting

what Bush wants--is he mad that he's no longer in control of our money supply, or is he merely acknowledging the inevitable?

[Angela Shelley]

4. Acknowledging the inevitable.

The US and the Fed have bitten off more than they can chew.