Bush Is Doing Osama’s Work For Him, Part 34543996

One of the unspoken reasons Bush had for invading Iraq and toppling his dad’s former best bud Saddam is that Saddam had stopped pegging Iraq’s oil sales to the dollar and had switched to the euro. (Paul Bremer’s CPA switched Iraq back to the dollar peg as soon as they could.)

That’s why this story should be scaring people (in addition to provoking a few bitter laughs):

Fears of dollar collapse as Saudis take fright

By Ambrose Evans-Pritchard, International Business Editor

Last Updated: 8:39am BST 20/09/2007

Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.

[…]

The Saudi central bank said today that it would take “appropriate measures” to halt huge capital inflows into the country, but analysts say this policy is unsustainable and will inevitably lead to the collapse of the dollar peg.

As a close ally of the US, Riyadh has so far tried to stick to the peg, but the link is now destabilising its own economy.

The Fed’s dramatic half point cut to 4.75pc yesterday has already caused a plunge in the world dollar index to a fifteen year low, touching with weakest level ever against the mighty euro at just under $1.40.

[…]

Kuwait became the first of the oil sheikhdoms to break its dollar peg in May, a move that has begun to rein in rampant money supply growth.

And there was this story last month:

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

Two officials at leading Communist Party bodies have given interviews in recent days warning – for the first time – that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

Shifts in Chinese policy are often announced through key think tanks and academies.

Described as China’s “nuclear option” in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.

It would also cause a spike in US bond yields, hammering the US housing market and perhaps tipping the economy into recession. It is estimated that China holds over $900bn in a mix of US bonds.

Granted, this is the Torygraph we’re talking about. And Ambrose Evans-Pritchard is not really all that trustworthy. But still.

Osama bin Laden wants to bring down the US economically, the same way the Soviet Union collapsed. And wittingly or not, Bush is doing everything he can to make it happen.